Telstra PSTN continues its slide

Fixed line revenues down $504 million in the 2010 financial year

In news that will surprise few in the telecommunications sector, Telstra has announced that its PSTN products revenue has continued to decline in the year to 30 June 2010, dropping some $504 million, or 8.0 per cent over 2009 to $5.833 billion.

In a report to the ASX, the company said the PSTN revenue decline was driven by lower usage across all calling categories and the continued fall in services in operation (SIOs) from acceleration of retail customer loss as Unbundled Local Loop growth continues and customers migrate to mobile and IP products.

The company noted that there had also been a further acceleration in retail line loss to 4.2 per cent in the fiscal year versus a 1.7 per cent decline in 2009, equivalent to 326 thousand lines.

“Line spectrum sharing (LSS) and unbundled local loop (ULL) uptake by competitors continues to be strong, but there has also been a significant increase in net line cancellations, with more than 200 thousand in the year,” the report reads.

“Although some of these cancellations are substitution to our mobile or IP Telephony products, the underlying trend is still negative. We believe that around 12 per cent of households are now mobile-only for voice, up from around 8 per cent a year ago.”

The company said PSTN usage decline also continued to accelerate with local call revenue dropping by 15.0 per cent while the number of local calls made for the year declined by 710 million or 14.7 per cent.

There were also double digit declines in revenue for national long distance calls, international direct and fixed interconnection while fixed to mobile PSTN revenue fell by 7.8 per cent.

In its consumer division PSTN revenues fell by 7.4 per cent to $3,498 million. The decline accelerated in the second half with PSTN revenue down nearly 10 per cent as the shift continued to ULL and wireless only households

“In addition, there has been an acceleration in the decline in usage over the period. PSTN SIOs also fell by 257 thousand or 4.7 per cent during the year. Some of these factors also impacted fixed internet with revenues declining by 1.0 per cent to $1,261 million,” the report reads.

In its business division, the decline in PSTN continued to accelerate with PSTN revenue down 6.8 per cent to $1.257 billion as customers substituted fixed access and calling to other products.

In its wholesale business, PSTN revenues declined by 11.8 percent with the number of lines declining by 32,000.

Overall, Telstra recorded a 3.94 billion profit for the year to June 30 2010.

In February, the company reported that its PSTN revenues had declined by $222m year on year during the half. ISDN services declined $20m and advertising and directories businesses declined $53m year on year.

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