Telstra Corporation Limited

Topics: Foreign exchange market, Inflation, Currency Pages: 6 (1874 words) Published: August 25, 2013
1.0 Background of the company
Telstra Corporation Limited is a telecommunications and media company, which is a leading provider of mobile phones, mobile devices, home phones, broadband internet and operating telecommunications networks in Australia. Telstra’s goal is to be one of the most admire, respected and trusted telecommunication companies in the world with their four strategic priorities of improving customer satisfaction, retaining and growing our customer numbers, simplifying the business, and developing new growth businesses (Telstra Corporation Limited, 2012). With its successful in Australia, Telstra has also operates entities in other foreign countries. Beside some offshore controlled entities that provide managed network services, international data and satellite across Asia Pacific, China, India, Europe and Africa, Telstra also has two largest telecommunications provider and mobile operator in New Zealand and Hong Kong, which are TelstraClear and CSL New World (Telstra Corporation Limited, 2010). According to the latest Telstra’s annual report (2012), the company’s strategy will be continue to provide customers and shareholders an opportunity to gain more benefits, with an increased focus on customer service leading to strong customer retention and acquisition in the next few years.

2.0 Telstra’s financial analysis
3.1 Summary of key revenue and profit data
Telstra Corporation Limited| 2008 ($m)1| 2009 ($m)2| 2010 ($m)3| 2011 ($m)4| 2012 ($m)5| Sales revenues| 24,657| 25,371| 24,813| 24,983| 25,232| Other revenues| 171| 136| 104| 110| 136|

Total revenues| 24,828| 25,507| 24,917| 25,093| 25,368| Profits before tax| 5,140| 5,658| 5,538| 4,557| 4,934| Table 1. Key revenue and profit data of Telstra Corporation Limited As can be clearly seen in Table 1, the revenues of Telstra Corporation Limited have risen to $25.5 billion in 2009 and fall down to $24.9 billion in the next year. According to the annual report of Telstra Corporation Limited (2010), the decline in revenues of the year 2010 has been driven by lower usage across all calling categories and the continued dall in SIOs from

acceleration of retail customer loss. However, in 2011, the revenues started to rise again and have increased by 1.1% to $25.4 billion in 2012 (Telstra Corporation Limited, 2012).

On the other hand, the report also shown that the company’s profit has fallen to $4.5 billion in 2011 and started to increase by 8.3% to $4.9 billion in 2012. However, this result is still lower than the profits that the company got in the three years 2008 – 2010, which are over $5 billion.

3.2 Summary of Foreign Revenues
Foreign revenues| 2008 ($m)1| 2009 ($m)2| 2010 ($m)3| 2011 ($m)4| 2012 ($m)5| Hong Kong (CSL New World)| 917| 989| 770| 814| 860|
New Zealand (Telstra Clear)| 562| 547| 529| 516| 501| Other offshore controlled entities| 346| 390| 293| 299| 453| Total foreign revenues| 1,825| 1,926| 1,592| 1,629| 1,814| Table 2. Foreign revenues of Telstra Corporation Limited

| 2008| 2009| 2010| 2011| 2012|
Total foreign revenues as %| 7.3%| 7.5%| 6.3%| 6.4%| 7.1%| Table 3. Total foreign revenues as percentage

Referring to Table 2 above, we can clearly see that the revenues of CSL New World, TelstraClear and other offshore controlled entities had decline significantly in 2010. In percentage term, the revenue of foreign entities decreased by 6.3% in 2010 and started to rise slowly in the next two years.

According to the annual report of Telstra Corporation Limited (2010), the revenue performance of CSL New World was negatively impacted by lower local voice yields and reduced international roaming driven by lower outbound travel among CSL New World’s customer base since the beginning of the Global Financial Crisis (GFC). However in 2011, the revenues have shown signs of improvement due to the recovery of Hong Kong’s economy...
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