Telstra Group (ASX:TLS) executives used the company’s latest earnings call to outline progress on major network and digital programs, report higher profit and cash earnings for the half, and discuss capital management updates including a higher interim dividend and an expanded share buyback.
Focus on regulation, spectrum certainty, and a “Connected Future 30” agenda
CEO Vicki Brady said Telstra wants “certainty of spectrum allocation on fair terms at a fair market price” and called for “better regulation” that is designed for today’s environment but technology-agnostic. She welcomed the Productivity Commission’s proposal for a deep review of telecommunications regulation and said Telstra wants to work with government and regulators on a shared vision for Australia’s digital future.
Aura fiber build reaches halfway mark; resilience investments highlighted
Brady said Telstra has reached the halfway point on its Aura network build (previously called intercity fiber), with 7,000 kilometers of fiber in the ground. She said Sydney-to-Melbourne coastal routes via Canberra are live, and additional routes are expected to be completed in FY 2026, including Sydney-to-Melbourne Central via Canberra and Sydney-to-Perth.
Management said it expects a one-point uplift in its Network Experience Index, attributing this to network optimization, early benefits from additional investment over four years in 5G Advanced capability, and improvements in resilience. Brady said Telstra strengthened backup power across network sites, which withstood more than 95% of 165,000 planned and unplanned power interruptions in FY 2025.
Telstra also highlighted satellite capabilities. Brady noted the company launched satellite messaging in June last year and said usage rose during recent Victorian bushfires when terrestrial networks were disrupted, describing a threefold increase in people connecting to satellite messaging in affected areas.
Customer digitization and AI: migration progress and expanding self-service
Telstra said more than 99.9% of its 7.7 million consumer customers have been migrated to a new digital stack, with about 4,000 complex customers still to be transitioned. Brady said digitization and AI are improving customer experience, with 86% of consumer service interactions now completed through digital self-service rather than calls.
In November, Telstra launched a customer-facing generative AI assistant on Telstra.com to help with tasks such as checking plans, activating a SIM, and resetting passwords. Brady said the assistant drove an “almost threefold” increase in customers resolving inquiries using AI, and the company plans to scale it across the My Telstra app during the quarter.
Telstra reported strategic Net Promoter Score increased by five points over 12 months and episode NPS increased by two points. Consumer executive Brad Whitcomb later cited an all-time high customer NPS of +47 and said the division’s employee engagement score is +85.
Financial results: profit and cash earnings rise; dividend and buyback increased
CFO Michael Ackland said Telstra delivered “another strong half,” with growth across earnings and cash metrics and lower operating expenses. While total income rose 0.2%, operating expenses fell 2.1%. EBITDAL increased 4.9% on a reported basis and 5.5% on an underlying basis, with the difference attributed to an AUD 23 million impairment of the London Hosting Centre.
Profit attributable to shareholders was AUD 1.1 billion, up 9%, and earnings per share were AUD 0.099, up 11%. Ackland said cash EPS was AUD 0.14 per share, up 20%, and cash earnings grew 17% to AUD 1.6 billion, helped by strong operating leverage and lower BAU CapEx of AUD 1.5 billion (down 5%, largely due to timing). Effective tax rate was 28.4%.
The board increased the interim dividend to AUD 0.105 per share, up 10.5% on a cash basis and representing 75% of cash EPS. Ackland said partial franking was used due to a “tight franking balance” and a gap between cash and accounting earnings. Telstra also lifted its buyback from up to AUD 1.0 billion to up to AUD 1.25 billion, having repurchased AUD 637 million in the first half at an average price of AUD 4.90.
Business performance: mobile strength, fixed challenges, and portfolio moves
Telstra reported EBITDA growth across Mobile, Fixed C&SB, InfraCo Fixed, Amplitel, and Other, with Health flat as revenue growth was offset by higher costs. In mobile, service revenue grew 5.6% with growth across postpaid, prepaid, and wholesale, and Telstra added 135,000 handheld users in the half. ARPU increased across categories, including postpaid handheld ARPU up 4.8% and prepaid handheld ARPU up 14.7% (management said prepaid growth reflected October 2024 price changes, and was lower on a unique-user basis). Mobile EBITDA rose 4% to AUD 2.7 billion, with higher costs including remediation and compensation, sales costs related to satellite, increased redundancy, and higher allocation of shared costs.
In Fixed Consumer and Small Business, Ackland said Telstra improved NBN unit margin through price rises and plan mix and continued growth in 5G fixed wireless. The company launched internet-only plans and introduced the Telstra Smart Modem 4, but said SIO losses remain a challenge.
In Fixed Enterprise, Data and Connectivity income fell 9% and EBITDA declined to AUD 25 million, with cost reductions insufficient to offset revenue decline. Network Applications and Services revenue fell 4% but EBITDA rose to AUD 62 million due to cost management. Telstra said the sales of Alliance Automation and MTData are completed, and the sale of 75% of Versent is expected to close in the half; these businesses contributed AUD 235 million in first-half FY 2026 revenue.
InfraCo Fixed income was broadly flat at AUD 1.4 billion, while EBITDA rose 3.4% to AUD 905 million. Amplitel EBITDA grew 6.6% to AUD 162 million. On strategic investments, management reaffirmed expectations for AUD 1.6 billion of spend above BAU CapEx across the Aura project, with most spend expected by the end of FY 2027, but a “small amount” and some routes now expected to complete in FY 2028. Ackland said Telstra continues to target a mid-teens IRR and expects strong revenue growth “especially from FY 2028.”
For FY 2026, Telstra tightened underlying EBITDA guidance to AUD 8.2 billion to AUD 8.4 billion, with the midpoint unchanged, and reconfirmed other guidance measures. Ackland said first-half results benefited from one-offs, particularly in international and other EBITDA, and noted higher BAU CapEx is expected in the second half.
About Telstra Group (ASX:TLS)
Telstra Group Limited engages in the provision of telecommunications and information services to businesses, governments, and individuals in Australia and internationally. It operates through four segments: Telstra Consumer and Small Business, Telstra Enterprise, Networks and IT, and Telstra InfraCo The company offers telecommunication, media and technology products and services to consumer and business customers using mobile and fixed network technologies, as well as operates call centers, retail stores, a dealership network, digital channels, distribution systems and Telstra Plus customer loyalty program in Australia.
