By Claire Reilly
With the release of its yearly results report yesterday, Telstra announced stable income for the 2012-13 financial year (up 1.9 per cent to $26 billion) and a solid 12.9 per cent increase in net profits up to $3.9 billion.
But in amongst the news on financial results and dividends for investors, the telco also revealed the state of its mobile versus fixed line business, providing insights into the decline of the home phone market in Australia.
Over the year, Telstra signed on 1.3 million “domestic retail mobile customers”, including 423,000 postpaid handheld customers and 452,000 mobile broadband customers, bringing its total mobile customer base up to 15.1 million.
However, during the same period its PSTN customers (short for Public Switched Telephone Network or traditional fixed line voice services) fell by 287,000, a decline of 3.6 per cent. Now fixed line customers number 7.8 million. Revenues for the PSTN business also declined by 9.5 per cent year-on-year.
PSTN makes up just one part of Telstra’s fixed line business, which also comprises NBN voice services, fixed broadband services and “other fixed revenue which primarily includes intercarrier services, payphones, customer premises equipment and infrastructure access revenue from the NBN agreements” according to Telstra’s financial report.
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As part of the report, Telstra commented on the decline in traditional fixed home phone services, compared to other parts of the business which are experiencing growth.
“Our key priorities in the fixed portfolio are to grow our fixed broadband business, manage the decline in our PSTN business and successfully transition customers to the NBN,” the report read.
“There was a continuation of trends in our PSTN and fixed broadband business this financial year. PSTN revenue fell by 9.5 per cent to $4,358 million, however we saw strong growth in retail fixed broadband with revenue increasing by 9.3 per cent to $1,757 million, the strongest growth in four years.
“Our PSTN business continued to decline with the loss of 287,000 customers. Retail customer numbers declined by 346,000 and wholesale services increased by 59,000.”
As PSTN voice services decline, Telstra has seen an increase in both postpaid and prepaid handheld mobile revenue, and the telco is looking to meet increased customer demands for mobile data with a 4G network that now covers 66 per cent of the Australian population.
While the growing smartphone and tablet market has been a boon for retailers, the decline in traditional PSTN customers raises questions for retailers who sell the home phone products that allow customers to access Telstra’s phone lines. However, the silver lining for retailers is that increasing NBN voice service use will no doubt see a rise in demand for devices with VoIP (Voice Over Internet Protocol) capability.