Positive earnings seen from Telstra broadband unit

  • Business
  • Saturday, 19 Jul 2003

MELBOURNE: Telstra Corp Ltd, Australia's dominant telecommunications carrier, said yesterday its broadband arm expects to achieve positive operating earnings in 2003/04 for the first time as its subscriber base doubled. 

Criticised for high pricing and unreliable high-speed Internet connections, which have slowed the take-up of broadband in Australia, Telstra said it had no plan to cut its broadband prices and was fixing problems on its network. 

The company expects annual revenue from broadband, which makes up less than one percent of the group's sales, to grow 75% over the next year from A$250mil in the year ended June 30, and top A$1bil (US$650mil) in 2006. 

Telstra said earnings before interest, tax, depreciation and amortisation as well as earnings before interest and tax from broadband would be positive this fiscal year for the first time. 

“This means that each customer we're putting onto the Telstra network is profitable,” broadband managing director Bruce Akhurst told reporters. 

One of the company's key sources of growth is other Internet service providers (ISPs) that need to use its phone lines. 

Telstra's biggest rival, Singapore Tele- communications Ltd's unit Optus, currently provides broadband service only on its cable network but expects to decide within the next month how to expand its Internet offering to high-speed phone lines. 

“We really welcome Optus' and all the other ISPs' activity in the market. Our objective is to make sure that the traffic is on our network,” Akhurst said. – Reuters  

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