Write-off sees Telstra profit drift down to $3.4 billion

Telstra Corp. Ltd. has recorded a profit of $3.4 billion for its fiscal year ended 30 June 2003 on revenue of $21.6 billion.

Profit was 6 percent lower than last year, although this year's revenue was 3.9 percent higher than in 2002, Telstra said in a statement.

The fall in profit was largely due to an $965 million write-off in the value of Reach Ltd., an undersea cable joint venture with Hong Kong's Pacific Century Cyberworks Ltd. (PCCW). The increase in revenue was partly caused by the inclusion of full-year results from its New Zealand subsidiary Telstra Clear, the company said.

Telstra Chief Executive Officer Ziggy Switkowski said that growth for the coming year would be below the industry norm of 4 percent but that profit would increase as a proportion of revenue as costs will continue to be held down.

Telstra is Australia's former monopoly carrier, and is still 50.1 percent owned by the Australian government.

The company has for several years been at the center of a political dogfight regarding its privatization, which began on a small scale in 1996. The incumbent Liberal government is keen to sell off the rest of Telstra, but the opposition Labor party, backed by other smaller parties, is opposed to the sell-off claiming it would hit services to unprofitable rural areas, cause massive job losses and would create a "huge private monopoly which would totally dominate telecommunications."

The government's share in Telstra is estimated to be worth around $A30 billion at the current share price.

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