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TLS - Telstra News Story

NZD3.72 0.0  0.0%

Last Trade - 2:59am

Sector
Telecoms
Size
Large Cap
Market Cap £22.48bn
Enterprise Value £32.29bn
Revenue £12.39bn
Position in Universe 16th / 1911

UPDATE 1-Australia's Telstra profit to halve after NBN rollout - chairman

Tue 16th October, 2018 12:41am
(Adds quote, details on profit fall on dividend, background)
    Oct 16 (Reuters) - Telstra Corporation's  TLS.AX  profit is
expected to halve upon the government-owned National Broadband
Network's (NBN) scheduled rollout in 2021, the chairman of
Australia's largest telecom told its annual general meeting. 
    "The NBN will have reduced Telstra’s net profit after tax by
close to a half when fully rolled out. Not a few per cent,
half," Telstra Chairman John Mullen said.
    Last month, Telstra cut its 2019 earnings guidance to
between A$8.7 billion ($6.21 billion) and A$9.4 billion,
excluding restructuring costs, from a range of A$8.8 billion to
A$9.5 billion, citing delays in the broadband rollout. It did
not flag an impact on profit. 
    Telstra dominates Australia's mobile telephone and broadband
markets, but its business has been upended by the NBN, one of
the biggest infrastructure projects in Australian history. The
network replaces copper wires laid by firm across the continent
with a fibre-optic system that the telco must now pay to access.
     Much like other incumbent telecoms around the world,
Telstra is under pressure as revenue from traditional streams
are drying up and rising competition squeezes mobile margins.
    The bleak situation has prompted the Melbourne-based company
to cut a quarter of its workforce and separate its fixed-line
assets, which it values at A$11 billion, from the rest of the
firm in preparation for a potential demerger or partnership. 
    Mullen added that the fall in profit would affect its
dividend. 
    In August, Telstra cut its final dividend by nearly a third
to 11 Australian cents, the first such drop since it listed in
1997. 
    
($1 = 1.4013 Australian dollars)

 (Reporting by Aditya Soni in Bengaluru; Editing by Stephen
Coates)
 ((Aditya.Soni@thomsonreuters.com; +91 80 6749 1783; Reuters
Messaging: Aditya.Soni.thomsonreuters.com@reuters.net))
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