Telstra customers turn their backs on bundles – telco/ISP

Telstra reports full-year 2022 results, with revenue of $22 billion (down 4.7%) and net income of $1.8 billion (down 4.6%), down mainly due to the impact of NBN on its business. I’m here.

The company’s consumer business was hit hard by the loss of bundled customers, but mobile helped absorb the damage.

Carriers said they lost 81,000 bundled consumer fixed-line services while adding 155,000 postpaid mobile services, 215,000 retail prepaid services, 218,000 wholesale mobile services and 1 million IoT services. I was.

This left carriers with about 21 million retail mobile services, and while mobile broadband services grew only 0.4%, mobile broadband revenues grew 7% to $924 million.

Total mobile revenue increased 1.7% to $9.5 billion, of which $5 billion was postpaid (up 4.5%).

Meanwhile, fixed consumer and small business (C&SB) services have been “more challenging,” said outgoing CEO Andy Penn.

“Bundle and standalone data ARPU increased 2.4%, while net-new retail bundles were -87,000,” he said.

This was reflected in C&SB revenues down 5.3% to $4.5 billion, down 5.3%. This was “impacted by the nbn transition in addition to traditional voice and SIO reductions.”

NBN impact

NBN’s deployment continued to weigh on Telstra’s earnings, with NBN’s revenues down $700 million and NBN’s commercial work down $300 million.

Penn said this year’s NBN represents an EBITDA “headwind” of $340 million, with the NBN contributing to Telstra’s EBITDA cumulative impact of $3.6 billion annually, “a big, hard-to-swallow pill, but I swallowed it,” he said.

NBNs are also driving new customer behaviors, with more people willing to split their telecommunications bills.

On-network fixed line revenue fell 40.2% to $469m due to lower C&SB bundles, while off-net fixed revenue (i.e. services resold by Telstra such as NBN) decreased 5% It increased to just over $3 billion. Migrate to NBN.

Incoming CEO Vicky Brady said the loss of bundled customers reflects customers migrating to NBN.

“We are in the final stages of the NBN migration now, and that is helping,” said Brady.

Migrating a customer’s last tranche to NBN “can be a daunting experience,” she said, leading her to abandon the bundle.

Finally, she agreed that Telstra would have to deal with the loss of these services, but promised to provide premium services including Telstra smart modems, mobile backups and more.

That’s why Telstra objected to low-cost “naked” bundles that don’t include such content.

NBN’s challenges like this make the pen Revised NBN Special Access Undertaking Process –What the industry wants is to offer pricing structures that are likely to encourage a shift to faster, higher ARPU services.

“We also applaud the government’s recent advice to NBN Co and NBN Co’s subsequent decision to withdraw the SAU and work towards a better industry pricing model,” Penn said. .

“We look forward to rapid results that improve service quality for all our customers and a more economically sustainable industry.”

“Ultimately government policy should be set with the desire for Australia to have a world-leading digital infrastructure,” Penn said.

Regarding SAU, he said:

“First, wholesale pricing levels seem too high and are about to get higher,” particularly as reflected in NBN Co’s CVC pricing.

“Second is the pricing structure. There is a mismatch between wholesalers and retailers.”

Finally, he said wholesale and retail service levels need to be more coordinated.

digital transformation

The challenges Telstra faces in the consumer market place an emphasis on continued investment in simplicity and digitization.

The operator has 4.5 million customers signed up for the Telstra Plus rewards program. That’s well short of his goal of 5 million, but he still calls the program an “overwhelming success.”

Digital transformation also meant that nearly half of all C&SB sales interactions and more than three-quarters of service interactions are now through digital channels.

This resulted in a 70% reduction in call volume for the C&SB call center.

Enterprises have followed a similar trajectory, accounting for 40% of service interactions through digital channels, Penn said.

Pending Energy Retail

Due to the crisis in the Australian energy market, one of Telstra’s brand expansion strategies, Telstra Energy, has been frozen.

Penn said Telstra had “made great strides” in launching Telstra Energy, including obtaining licensing approval and conducting “a limited number of customer trials.”

“But clearly the retail energy market is currently experiencing severe turmoil and given this, we will not scale into FY23,” he said.

After receiving 10,000 expressions of interest, Penn said Telstra intends to extend the trial to those customers and “continue to consider the dynamics of the market.”

He added:
more reliably. ”

Telstra customers turn their backs on bundles – telco/ISP

Source link Telstra customers turn their backs on bundles – telco/ISP

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