Telstra's First-Half Results Show Ongoing Momentum in Mobile and Fixed Broadband

Telstra released its first half fiscal 2014 results, reporting net profit after tax of AUD 1.74 billion – in line with our AUD 1.75 billion forecast. At an operational level there were small beats in mobile and fixed broadband, supported by better-than-expected subscriber growth and solid trends in average revenue per user, or ARPU. This was offset by lower-than-expected growth in network applications and services, or NAS, where margins were impacted by upfront costs associated with new contracts. For example, the new AUD 1.1 billion Department of Defence contract which commenced in the second half of fiscal 2013. Growth in NAS was still impressive, revenue was up 29% against the prior period.