Data traffic drives Telstra

Telstra Corp. Ltd.'s half-year results revealed that sales revenue are up 5 percent from the corresponding period last year and 56 percent of the total sales revenue comes from businesses of the so-called new economy.

Futhermore, data and internet service revenues have increased by 18.5 percent to A$1.6 billion (US$816 million). "This is the largest percentage increase in the previous three periods," said Telstra's chief financial officer, David Moffatt.

Mobile data traffic, such as SMS and WAP, experienced a four-fold increase from the previous half and grew from A$9 million to A$42 million. Telstra has cashed in on what it labels the beginning of a new era as the increase in traffic boosted mobile-service revenues 11.4 percent.

Telstra is certainly pleased with its overall result. "We delivered double-digit EBIT (earnings before income and taxes) growth. Revenue is up, expense growth is down as our cost reduction projects start to impact, and capital spending is stabilizing. Our balance sheet remains very strong," said Telstra's CEO, Ziggy Switowski.

The need for fast, affordable internet access and an environment where data traffic is greater than voice traffic has driven Telstra to undergo a transformation, said Switowski in his address at the release of the results.

Switowski focused on Telstra's strategy, which consists of four elements:

-- Serving the domestic market

-- The Wholesale business

-- International expansion of wireless and data services into Asia -- Applications and content activities, including Pacific Access, telstra.com, Foxtel, emerging interactive TV interests and e-commerce transaction servicesOn broadband, Switowski said that at the end of February the ADSL (Asynchronous Digital Subscriber Line) rollout reached more than 400 exchanges, equivalent to an ADSL capability for about 50 per cent of its PSTN customers. As of December 31, 2000, Telstra had 50,000 broadband customers, a four-fold increase on the previous corresponding period.

"Telstra has the most broadband customers in Australia. Only Telstra has the technical and economic capacity in Australia to successfully deliver broadband to the mass market, and we know customers want it. This is an exciting step forward for the data market," said Switowski.

Telstra's wholesale strategy is also doing strongly. "We get three out of every four communications dollars spent in Australia," said Switowsi. "That still leaves our other carriers getting the other one. There are many of them in the Australian market today and by us offering attractive products and solutions to them, they are encouraged to buy from us, not somebody else, and we gain additional revenue."

The relationship joint ventures with Pacific Century CyberWorks and Hong Kong Telecom are driving Telstra's Asian strategy. The deal spearheads a long-term push into the region and gives Telstra voice, data and internet connectivity services; a mobiles business and a more substantial data business, said Switowski.

Switowski said that Telstra continues to increase its internet, broadband, mobile and pay TV content. The most lucrative online media company is Pacific Access, with four major online properties including Yellow Pages and White ages.

YellowPages.com.au is still bringing in the green folding stuff and receives over 850,000 unique visitors, 4 million searches a month and annualized revenue of A$15 million. WhitePages.com.au has 1.1 million unique visitors and 11.8 million searches a month. The recently released White Pages Online product is expected to significantly add to Pacific Access's online revenue over the next 12 months.

Pacific Access intends to create online catalogues, web-page creation to support packages of online advertising and e-commerce products for SMEs.

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More about Affordable Internet AccessFoxtelPacific AccessPacific Century CyberWorksTelstra CorporationYellow Pages

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