Telstra (ASX: TLS)

Telstra (ASX: TLS) A telecommunications and information services company

1901

FOUNDED

LARGE

SIZE

TELECOMMUNICATIONS

Industry

Product / Service

  • Telstra owns and operates Australia’s largest telecommunications network  

  • Telstra operates five business units:

    • Retail – focussed on consumer customers and small to medium enterprises.  Includes Foxtel and digital content services

    • Global Enterprise & Services – focussed on business and government customers

    • Wholesale – includes telecommunication products and services delivered over Telstra networks to non-Telstra branded carriers

    • Operations – a service segment supporting the revenue generating activities of other segments.  Operations is responsible for installation, maintenance and restoration of Telstra’s networks and information technology

    • Other – includes the costs of corporate centre functions, receipts under certain NBN agreements and China digital media results

  • Telstra’s products include:

    • Fixed – broadband, fixed phone lines, entertainment and Telstra Air

    • Mobile – telecommunications services to mobile phones

    • Data & IP – a range of data services including IP access and Integrated Services Digital Network (ISDN) services

    • Network Applications and Services (NAS) – managed network services, security services and a range of software-as-a-service (SaaS) solutions

    • Media – previously included Sensis directories business and now includes premium pay TV and Foxtel

  • Telstra provides 16.9m mobile services, 7.2m fixed voice services and 3.3m retail fixed broadband services

  • Telstra’s 4G network covers over 94 per cent of the Australian population. The objective is to reach 99 per cent


The NBN and Telstra

  • The National Broadband Network (NBN) is a high-speed network designed to deliver fast data transmission to 90% of Australian homes

  • The NBN is a Government Business Enterprise (GBE).  This means it is a separate entity wholly owned by the government

  • The NBN will be constructed using fibre-optic cabling, as opposed to copper, which forms the basis of Telstra’s network

  • NBN Co did a deal with Telstra to install the NBN leveraging Telstra’s existing network, thereby avoiding a duplication of the existing infrastructure that Telstra already owned.   The result was a large cost saving to NBN Co and Telstra avoiding being left with a stranded asset

  • Going forward, Telstra and other telecommunications providers will be able to offer their telecommunication services through the NBN

History

  • As a result of Federation, the Postmaster General’s Department was established in 1901 charged with control of the nation’s telephone, telegraph and postal services

  • In 1975, telecommunications was separated from postal services creating the Australian Telecommunications Commission, trading as Telecom

  • Telecom was renamed to Telstra Corporation in 1993

  • The government partially privatised Telstra and floated it on the ASX in 1997, with the government selling around 33 per cent of the company

  • The government continued to sell down its ownership of Telstra in 1999 and 2006, with the residual holding of 17 per cent transferred to the Future Fund in 2007

Customers

  • Telstra’s customers include consumers, businesses and government

Operations

  • The company is headquartered in Melbourne

  • The company’s operations are mainly in Australia with a focus on Asia-Pacific

To be a world class technology company that empowers people to connect

Profitability Table

Year Revenue ($m) % change EBIT % change
FY 2009 25,371 2.9 6,558 5.3
FY 2010 24,813 (2.2) 6,501 (0.9)
FY 2011 24,983 0.7 5,692 (12.4)
FY 2012 25,503 2.1 5,822 2.3
FY 2013 24,776 (2.9) 6,090 4.6
FY 2014 26,296 6.1 7,185 18.0
FY 2015 26,112 (0.7) 6,559 (8.7)
FY 2016 27,050 3.6 6,310 (3.8)

Fun Facts

  • Telstra is Australia’s most widely held stock, with over 1 million shareholders on the register

  • Andrew Penn’s (CEO) total remuneration for FY 2016 was $6.8m

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