Thursday, February 26, 2009

Public Meetings Planned for Broadband Initiatives Under Obama Stimulus Bill

The National Telecommunications and Information Administration, the Rural Development arm of the U.S. Department of Agriculture and the Federal Communications Commission (FCC) will hold a public meeting on March 10, 2009 to discuss the Broadband Initiatives funded by the American Recovery and Reinvestment Act of 2009.


The meeting will be held at the U.S. Department of Commerce, National Telecommunications and Information Administration in Washington, D.C.


The Broadband Initiatives funded in the Act are intended to accelerate broadband deployment in unserved, underserved, and rural areas and to strategic institutions that are likely to create jobs or provide significant public benefits.


The public meeting agenda and information about the new program will be available at NTIA's website.
http://www.ntia.doc.gov/broadbandgrantshttp://www.usda.gov/rurdev

Open-Plug Announces Telephony Capabilities for Intel "Moorestown"

Open-Plug, a company that specializes in software development environments for portable devices, is working with Intel to integrate its ELIPS Linux Telephony Stack to the Moblin Linux software stack for Mobile Internet Devices (MIDs) based on Intel's next generation "Moorestown" platform. Open-Plug is now bringing its advanced cellular telephony and messaging features to this new class of MIDs. http://www.open-plug.com

Verizon Business Receives Security Clearance in India

Verizon Business has received approval from the government of India's Department of Telecommunications to operate the company's two international gateways in Mumbai and Chennai, under its international long-distance license. The approval allows Verizon Business to offer its suite of private line services to multinational customers and to activate the company's wholly owned submarine cable capacity to India, providing direct connections to Verizon's global network, one of the largest such networks in the world.


Verizon Business noted that is has begun an aggressive infrastructure expansion in India. Since receiving its international and national long-distance licenses in India in January 2008, the company has deployed a Private IP/MPLS network in five major cities in India: Bangalore, Chennai, Hyderabad, Mumbai and New Delhi. Its latest MPLS node will be installed in Pune during the second half of 2009.
http://www.verizonbusiness.com

Deutsche Telekom Narrows Loss in Q4, Sees Stable Performance

Overall, Deutsche Telekom exceeded its financial targets in the 2008 financial year. The net loss narrowed in Q4 2008 to EUR 730 million compared to EUR 750 million a year earlier as revenue rose 2% to EUR 16.11 billion.


"Our 2008 financial year is characterized by stable performance and sound financial figures," said Chairman of the Board of Management, René Obermann, at the annual press conference in Bonn. The development of earnings in the past years and the current financial figures were proof of the fact that Deutsche Telekom was in good shape, he emphasized.


Adjusted EBITDA increased 0.7 percent compared with 2007 to EUR 19.5 billion, thus exceeding the original guidance of around EUR 19.3 billion. The company said its balance sheet and debt ratios are testimony to the continued solid and sound state the company is in: net debt only increased by around EUR 1 billion year-on-year to EUR 38.2 billion, although Deutsche Telekom incurred a net expense of approximately EUR 4.4 billion for the 25 percent stake in the Greek company OTE and for the acquisition of the U.S. company SunCom in 2008.


Despite the challenging economic conditions, Deutsche Telekom currently is forecasting an adjusted EBITDA around the level achieved in 2008, that is around EUR 19.5 billion, excluding the impact of OTE. Free cash flow for 2009 is also expected to be stable at around EUR 7 billion.


Some highlights:

Mobile Communications


  • Mobile Communications in Europe and the U.S. operating segments recorded revenue growth of 2.4 percent to EUR 35.6 billion in 2008. This includes net negative exchange rate effects of EUR 1.3 billion. Revenue growth of 7.1 percent in the fourth quarter outperformed the full year. Adjusted EBITDA growth of 6.2 percent to EUR 11.4 billion was significantly stronger for the full year 2008 than the increase in revenue. Exchange rate effects had an offsetting effect of approximately EUR 0.3 billion. In the fourth quarter, EBITDA increased by as much as 12.7 percent.


  • In the past year, T-Mobile maintained its leadership in the German mobile communications market. The company gained more than 950,000 new contract customers in 2008, virtually the same high level as in the prior year. While revenue in this fiercely competitive market decreased 2.8 percent to EUR 7.8 billion in 2008, adjusted EBITDA rose 3.1 percent to EUR 3.0 billion during the same period. As a result, the EBITDA margin improved from 36.8 percent to 39.0 percent.


  • T-Mobile USA continued to post double-digit growth rates. Revenue rose by 13.5 percent year-on-year to USD 21.9 billion, while adjusted EBITDA increased by 16.0 percent to USD 6.2 billion. The weak U.S. dollar resulted in lower revenue and adjusted EBITDA growth on a euro basis of 6.3 percent and 8.5 percent, respectively. The U.S. subsidiary's customer base grew by 4.1 million over the course of the year, of which almost three million were gained organically. 1.1 million customers were also added from SunCom which was consolidated in February 2008. As a result, T-Mobile USA had 32.8 million customers on December 31, 2008. 7.7 million of these use the MyFaves community service, which corresponds to a 54-percent increase in one year.

  • Business in the United Kingdom was negatively affected by continued fierce competition. While revenue fell 2.2 percent to GBP 3.2 billion compared to 2007, adjusted EBITDA decreased by 12.7 percent to GBP 708 million. Measured in euros, the decline is significantly more apparent as a result of the continuing weak pound sterling, with revenue dropping 15.8 percent and EBITDA 24.9 percent. The negative trend in contract customer numbers was reversed over the course of the year following the introduction of new calling plans.

  • The companies in Central and Eastern Europe remain important growth drivers, with revenue increasing by 10.0 percent to over EUR 6.1 billion and adjusted EBITDA growing by as much as 14.3 percent. With more than EUR 2.5 billion EBITDA, these countries once again made an important contribution to the Group's earnings. The majority of the national companies succeeded in increasing their profitability. For example, Polish company PTC improved its EBITDA margin from 32.9 percent in 2007 to 34.7 percent and at the same time increased its contract customer base by more than 15 percent to a total of 6.3 million.

  • Data revenue excluding messaging continued to grow unabated. In Europe, this figure climbed 44.9 percent to EUR 1.4 billion in 2008. U.S. operations reported an increase of 19.3 percent to USD 1.5 billion for the full year, with growth accelerating to 24.4 percent in the fourth quarter. This positive trend is chiefly due to innovative devices such as the Apple iPhone 3G in Europe and the Android-based T-Mobile G1 that was launched in the United States and the United Kingdom in October and has been available in other countries, including Germany, since mid-February.


Broadband/Fixed Network


  • Revenue decline in this operating segment could be slowed down to 5.1 percent in 2008, compared with 8 percent in the prior year, thanks to the excellent market performance of T-Home in Germany. The initial forecast had put the decline at between 4 and 6 percent. In the fourth quarter, the decrease totaled 3.9 percent. T-Home was even more successful in terms of cost discipline. The "Save for Service" program resulted in net cost reductions of around EUR 0.8 billion in 2008, allowing decline in EBITDA in Germany to be limited to 4.9 percent, slightly better than the originally expected decrease of 5 to 8 percent.


  • The entire operating segment reported revenue in Germany and abroad of EUR 21.3 billion, 6 percent below the prior-year level. In the fourth quarter, revenue declined by 4.2 percent. Adjusted EBITDA in the Broadband/Fixed Network operating segment fell 4.4 percent to EUR 7.4 billion.


  • T-Home expanded its leading market position in the German DSL market. The DSL net add market share has exceeded 40 percent for nine quarters running and actually reached the 50 percent mark in the fourth quarter of 2008 -- the highest net add market share since the complete packages were introduced. On an annual basis, the DSL net add market share was 45 percent, putting it in line with expectations.


  • With a retail customer base of 10.6 million, T-Home further reinforced its clear lead in the German DSL market in the past financial year. Around 352,000 DSL net adds were recorded in the fourth quarter of 2008 alone. In addition, over half a million customers wanting to return to T-Home from competitors registered over the full year. This figure was, for the first time, significantly higher than the number of customers lost to competitors.


  • In 2008, line losses totaled just under 2.5 million. This was at the lower end of the guidance of 2.5 to 3.0 million. This includes losses due to fierce competition and regulatory measures, as well as lines lost for technical reasons as a result of the migration of DSL resale customers to IP-based lines.


  • As many as 480,000 customers have already ordered the Entertain triple play package, meaning that Deutsche Telekom met its expectations. Internet TV is also becoming increasingly popular in Eastern Europe.
    Deutsche Telekom's subsidiaries in Croatia, Slovakia, Hungary, Macedonia and Montenegro had added a total of more than 220,000 customers by the end of 2008.


  • Revenue and profit from international business in the Broadband/Fixed Network operating segment declined overall, chiefly due to the deconsolidation of T-Online France and T-Online Spain in the previous year. Reported revenue decreased 12.2 percent to EUR 2.3 billion for the full year, a decrease of 5.1 percent in organic terms.


Business Customers


  • On a like-for-like basis, i.e. taking into account the changes in the composition of the Group, revenue decreased only slightly by 1.2 percent considering the difficult economic environment. Adjusted EBITDA remained at the same level as 2007, while adjusted profit from operations (EBIT) increased more than fivefold year-on-year, from EUR 12 million to EUR 61 million.


  • International business reported an increase in revenue of 7.4 percent. The adjusted number of new orders increased by 5.2 percent to EUR 12.3 billion. This was partly due to major deals with Shell, Deutsche Post and Royal & Sun Alliance, for example. The agreement with Linde, announced mid-February 2009, represents another milestone in T-Systems' international growth strategy.


  • As the prior-year figures included Media & Broadcast and ActiveBilling, the reported figures show a decline in revenue of 8.2 percent to EUR 11 billion and in EBITDA of 20.0 percent to EUR 0.9 billion. By reducing costs by EUR 0.5 billion in 2008 under the "Save for Service" program, the Business Customer arm also made a valuable contribution to cost cutting.

  • In 2008, T-Systems entered into a partnership in the systems integration area with the U.S. provider Cognizant. This collaboration is now starting to bear fruit. T-Systems has so far secured 16 joint deals with total revenue of EUR 70 million and new orders worth EUR 121 million. Both partners support Continental's tire divisions in Hanover, for example, and ensure stable operation of the research and development application landscape.
http://www.telekom.de

India's BSNL Rolls Out 3G with Ericsson

BSNL, India's second largest telecom operator, has launched 3G services in 11 cities across the northern and eastern parts of the country.


As part of its roll-out strategy, BSNL plans to launch 3G services using WCDMA/HSPA technology across more than 700 cities in the first phase. Ericsson is BSNL's strategic partner for 3G roll-out in over 400 of these cities. This roll-out is part of the contract announced by the companies September 7, 2007.


"The widespread roll-out of 3G network will also help in propelling telecom and broadband growth in India and will help us meet India's target of 20 million broadband subscribers by 2010," stated Kuldeep Goyal, Chairman and Managing Director of BSNL.
http://www.ericsson.com

Alcatel-Lucent Wins 100 Mbps Fiber Access Project in Munich

M-net, a Munich-based regional network operator, has awarded a multi-million Euro contract to Alcatel-Lucent to deploy the first extensive fiber access network in Munich. In the future, additional Bavarian cities will be connected to M-net's high-speed access network that consists of a mixed fiber-to-the-building (FTTB)/fiber-to-the-home (FTTH) architecture. The network will support data rates of up to 100 Mbps and possibly higher in the future.


Alcatel-Lucent will begin installing in March 2009. Alcatel-Lucent's solution includes its GPON access platform - the Alcatel-Lucent 7342 ISAM FTTU - and is complemented by the Alcatel-Lucent 5520 AMS and Alcatel-Lucent 5529 OAD management products. For in-house usage, a range of Alcatel-Lucent optical network termination (ONT) units and residential gateways will be provided. For the FTTB piece, Alcatel-Lucent will rely on existing copper wiring in buildings, using so-called multi-dwelling unit ONTs to translate the optical signal into VDSL2.

According to the current expansion schedule, the Munich-based network is set to become the largest and most modern optical access network in Germany. Alcatel-Lucent noted that its FTTH and FTTB network architectures support an "Open Access" business model, allowing M-net to open up its high-speed access network to additional service providers.
http://www.alcatel-lucent.com

ITU TELECOM WORLD 2009 to Focus on Solutions for Economic Recovery

ITU TELECOM WORLD 2009, which will take place in Geneva, 5-9 October, will include a global leadership summit to address the role of ICTs in economic recovery from the worldwide crisis and stimulating future investment and growth.


ITU Secretary-General Hamadoun Touré said, "ITU TELECOM WORLD 2009 this October will be the right time to bring together all the key players in government and the ICT industry. We will be in a better position to assess the effects on industry and establish both how to resuscitate those sectors that need it as well as to focus on how ICTs can be a catalyst for recovery. The ICT sector has been the powerhouse of the global economy in terms of GDP. Investment in ICTs makes as much sense now as it did in building the physical infrastructure of roads and railways during the great depression of the 1930s."http://www.itu.int

Obama Budget Adds Spectrum License Fee

A single line item in the new U.S. federal government budget proposes to raises $200 million in FY 2009, $300 million in FY 2010 and $425 million in FY 2011 for unspecified spectrum licensing conducted by the FCC. The budget does not mention which bands of spectrum are contemplated for licensing fees nor for which services. This item is posted on page 126 of the budget, which is online.


The FY 2010 Budget also includes $1.3 billion in USDA loans and grants for the Department of Agriculture to increase broadband capacity and improve telecommunication service as well as education and health opportunities in rural areas.
http://www.gpoaccess.gov

Wednesday, February 25, 2009

Infonetics Mobile WiMAX Market up 5% in 4Q08

The overall WiMAX equipment and device market held steady in 4Q08 over 3Q08 at $275 million, as the 802.16e mobile WiMAX segment increased 5% to counter a slight dip in the 802.16d fixed WiMAX segment, according to a new report from Infonetics Research.


"The WiMAX market will be leaner in 2009, leading vendors to rationalize their strategies: Nortel has exited, Alcatel-Lucent has transitioned its mobility R&D to its LTE program, and others will have their commitment to WiMAX tested. As the year progresses, we will see more intense competition for the fewer new contracts, and a tight race for market leadership. Currently Alvarion, Alcatel-Lucent and Motorola lead the field, but there is evidence to suggest that both Huawei and Cisco are coming up on the outside lane," said Richard Webb, Directing Analyst at Infonetics.



Some highlights of the report:

  • The overall WiMAX equipment and device market held steady in 4Q08 over 3Q08 at $275 million, as the 802.16e mobile WiMAX segment increased 5% to counter a slight dip in the 802.16d fixed WiMAX segment


  • Year-over-year, worldwide sales of 802.16e mobile WiMAX equipment (ASN gateways, BTS, CPE) grew 188% in 2008


  • Worldwide sales of 802.16e mobile WiMAX devices (Ultra Mobile PCs, phones, and external data cards) grew 121% in 2008, though the range of devices is still very limited


  • While WiMAX infrastructure revenue is subdued by the current global economic climate, strong CPE sales will drive overall mobile WiMAX market growth in 2009, as more services launch and new subscribers adopt WiMAX services for the first time


  • In 2008, the number of fixed and mobile WiMAX subscribers hit 3.9 million, up 120% from CY07


  • Alcatel-Lucent took the lead in annual worldwide mobile WiMAX revenue share overall in 2008, pushing Motorola into 2nd place; Alvarion's strong second half of 2008 edged them past Samsung for 3rd position


  • A fierce vendor market share battle is playing out in the mobile WiMAX market, with Alvarion consolidating its top spot on the overall WiMAX equipment revenue market share leaderboard in 4Q08


  • Huawei and Cisco continue to gain ground on the market leaders with a steady succession of both publicly announced and undisclosed WiMAX customer wins.
http://www.infonetics.com

Thailand's CAT Telecom Selects ZTE for National Optical Backbone

Thailand's CAT Telecom has selected ZTE to construct a large-scale national backbone optical network covering the entire territory of Thailand. Financial terms were not disclosed. The two organizations have collaborated in previous projects.


Under the agreement, ZTE will provide CAT Telecom with its DWDM ZXWM M900 backbone transmission platform that will deployed over a network spanning some 10,000 kilometers. ZTE will also supply multiple ROADM (Re-configurable Optical Add-Drop Multiplexer) equipment that will be installed in different sites in Thailand. The network will be equipped with DWDM long-distance and provincial trunk lines, and local MANs (Metropolitan Area Network) that will extensively carry IP services, including 1GE, 10GE and other access services.
http://www.zte.com.cn

Occam Networks Posts Q4 Revenue of $31.7 million, up 26% Sequentially

Occam Networks reported Q4 2008 revenue of $31.7 million, up 26 percent from the prior quarter and up 49 percent from the same quarter a year ago. Sequential revenue growth was primarily due to increased volume in the company's copper business.


Gross margin for the fourth quarter of 2008 was $13.1 million, or 41% of revenue, compared with $10.8 million, or 43% of revenue, for the prior quarter. Gross margin for the fourth quarter of 2008 was impacted primarily by an inventory provision for certain product components. Gross margin for the fourth quarter of 2007 was $9.2 million, or 43% of revenue.


Net income (GAAP) available to common stockholders for the fourth quarter of 2008 was $1.1 million, or $0.06 per basic and diluted share, compared with a net loss of $659,000, or a loss of $0.03 per basic share, for the third quarter and with a net loss of $4.6 million, or a loss of $0.23 per basic share, for the fourth quarter of 2007.


"During the year, our key goal was to position Occam for profitability by growing our overall customer base and launching sales of our GPON product, and these drove the successful execution of our business during the quarter," said Bob Howard-Anderson, president and CEO of Occam. "During the quarter we also experienced some slowdown in bookings and have seen additional order delays during the first quarter, as customers reacted to the economic environment."


As a result of the current environment, the company anticipates first quarter 2009 revenues to approximate those of first quarter 2008. In addition, due to the economic uncertainty, the company will not be providing financial expectations for 2009 at this time.
http://www.occamnetworks.com

Sonus Networks Posts Q4 Revenue of $89.5 Million

Sonus Networks reported revenue for Q4 2008 of $89.5 million, compared to $62.2 million in the third quarter of fiscal 2008 and $97.1 million for the fourth quarter of fiscal 2007. The company's loss from continuing operations on a GAAP basis was $99.0 million, or $0.37 per share, for the fourth quarter of 2008, compared to a loss from continuing operations of $19.0 million, or $0.07 per share, for the third quarter of 2008, and income from continuing operations of $14.7 million, or $0.05 per share, for the fourth quarter of 2007.

"We continue to make progress on aligning the business to our market opportunity," said Richard Nottenburg, president and chief executive officer of Sonus Networks. "We are focusing our investments on delivering products and services which enhance the value proposition we bring to customers, and we believe the actions we are taking will further strengthen our competitive position for the time when the economic recovery commences and we return to growth mode."

http://www.sonusnet.com

Vonage Ends 2008 with 2.6 million Lines in Service

Vonage Holdings reported full year 2008 revenue of $900 million, up 9 percent from $828 million in 2007. Net loss excluding debt extinguishment costs narrowed to $34 million from $93 million excluding certain charges. GAAP net loss was $65 million or $0.41 per share in 2008.


Marc Lefar, Vonage Chief Executive Officer, said, "We improved our financial position throughout 2008, and for the first time in Vonage's history, delivered adjusted operating profit and positive cash from operations for a full year. Vonage also delivered record level pre-marketing operating income(1) reflecting increasing levels of cash generated by the existing customer base. This progress occurred despite the uncertainty and challenges of the current economy."


"While our financial performance was sound, we fell short in our ability to substantially grow our subscriber base. However, we are confident Vonage has significant opportunities to create future value for shareholders," Mr. Lefar said. "Not only is the business model solid, but the market opportunity for digital voice remains robust."


Some highlights:

  • Revenue in 2008 increased 3 percent from the prior year to $222 million driven by an increase in average revenue per line (ARPU) and subscriber lines. Revenue declined 2 percent sequentially as a result of a decline in ARPU.


  • ARPU was $28.33, up from $28.19 in the year-ago quarter and down from $28.75 sequentially. Telephony services ARPU was $27.28, down from $27.42 reported a year ago and $27.52 sequentially. The sequential decline in telephony services ARPU was the result of a decline in currency value of the Canadian dollar and British pound and an adjustment in international revenue which totaled $0.33. Excluding these impacts, telephony services ARPU increased $0.09 sequentially.


  • The company lost 14,700 net subscriber lines, finishing the quarter with more than 2.6 million lines in service. Churn declined to 2.9% from 3.0% sequentially.
http://www.vonage.com

JDSU Expands its CWDM/DWDM Line

JDSU released of new additions to its WaveReady product line of scalable optical transport solutions designed for access and metro optical networks. Added to the portfolio are a 10 Gbps tunable transponder with forward error correction (FEC), a power balancing system, and a 40-channel universal multiplexer/de-multiplexer.

  • The WaveReady WRT-852, a compact C-Band or L-Band tunable transponder with Forward Error Correction (FEC) designed for reliable and cost effective transport of 10 Gbps services. The WRT-852 supports the transport of multiple services, including OTN, SONET/SDH, Ethernet, and Fibre Channel. The WRT-852 improves the transmission performance of 10 Gbps services with Forward Error Correction (FEC) and provides statistics on SONET/SDH and Ethernet traffic;


  • The WaveReady WRS-05AD1C00B, providing per-channel power balancing capabilities for tunable, amplified networks; and


  • The WaveReady 40-channel Universal Multiplexer, featuring high isolation and low insertion loss in a compact platform compatible with point-to-point or OADM deployments.


http://www.jdsu.com/waveready

BroadSoft Enhances its BroadWorks Platform

BroadSoft introduced new product enhancements to its BroadWorks VoIP application platform that allow telecommunications service providers to simplify the deployment of hosted business communications solutions. New device management functionality that enables service providers to pre-configure end-user access devices.



BroadSoft said the ability to pre-configure devices solves one of the most complex and time-consuming phases of delivering VoIP services. Traditionally, providers need to either pre-provision devices before shipment, rely on standalone FTP servers to store files or provision each phone at the customer site, all of which take time and require experienced technicians.


Through BroadSoft Device Management, providers can quickly provision analog terminal adapters (ATAs), IP phones, integrated access devices (IADs) and IP PBX equipment -- any access device that uses XML/HTTP for profile management -- at the customer site. A simple login process is used to retrieve the appropriate user-specific files directly from BroadWorks. Providers manage and control all aspects of device configuration centrally in the network, reducing the time it takes to provision phones from hours to minutes and eliminating the need for a technician visit.


To further ease the deployment of Hosted VoIP solutions, BroadSoft and Polycom introduced a new phone-based login capability for Polycom IP phones. Leveraging BroadSoft's Xtended Services Platform, Polycom developed a "Quick Setup" key that is activated when the phone is powered up. This new key enables users to directly retrieve their phone's configuration files from the BroadWorks platform via a one-time secure phone login. With this capability, it is no longer necessary to individually match physical Polycom phones to users, saving time and expenses for service providers and providing flexibility to end users.
http://www.BroadSoft.com

Deutsche Telekom Plans Tighter Mobile/Wireline Integration

Deutsche Telekom intends to adopt more of a regional focus with greater emphasis on integration between its wireline and wireless operations.


"The distinction between our fixed-line and mobile operations will be abolished. We intend to bundle product development, IT and technology across Europe in future," stressed Deutsche Telekom CEO René Obermann. "We have already proved with integrated mobile and fixed-network sales in Germany that we are capable of increasing our market share by working more closely together." At the same time, René Obermann made clear that this was not a staff reduction program. Agreement had been reached with the employee representatives on the key points for implementation on a cooperative basis."


The concept for this new Deutsche Telekom was presented by René Obermann to the company's Supervisory Board and the Board of Management.


Some of the aspects of this transformation include:

  • The sales, marketing and customer service functions for German mobile and fixed-network business will be consolidated in one Board of Management department in future.


  • Products and innovation, IT and technology will be managed at a pan-European level, procurement globally. This function is to be bundled in the new Board of Management department for Operations (COO).


  • a Board department was created for South Eastern Europe. Guido Kerkhoff (41), previously Head of Group Accounting and Controlling, will immediately start setting up this new Board department as a member of the Board of Management.


  • Timotheus Höttges (46) has been appointed as the company's new CFO with effect from March 1.


  • Niek Jan van Damme (47) will take the lead at T-Home, Sales & Service, Mr. van Damme will take on responsibility for the sales, marketing and service activities of the fixed-network and mobile operations in Germany from mid-2009.


Deutsche Telekom said this new management structure is a continuation of a strategy that has proven successful to date. Deutsche Telekom has already had success with integrated mobile and fixed-network sales in Germany and Hungary. The coordination of product development, networks and IT systems has also been successfully implemented at T-Mobile International. In the future, other functions will also be managed on an integrated basis -- such as marketing, human resources and finance.
http://www.deutschetelekom.com/media

Telstra on "Upward Glide Path" Exiting 2008, But Calling Volume Slows

Noting that it continues to outperform domestic and global peers in key products and segments, Telstra reported a strong first half result with free cash flow growing by 44% to $1.9 billion.


Telstra's Chief Executive Officer, Mr. Sol Trujillo, said: "We are on an upward glide path to hit our key targets for 2010 and beyond for free cash flow, margins, returns and top line growth. Telstra is seeing world class growth in core businesses such as wireless services, broadband, IP business services, advertising and media services, despite Australia facing the most volatile and challenging economic conditions for decades. The growth more than offsets the 5.1% decline in PSTN revenue. The decline was skewed to the wholesale business with retail PSTN revenues falling only 1.8%."


However, the company said its fiscal 2009 results are being affected by reduced calling volumes, as people manage their usage down more than expected in the deteriorating macro environment. Telstra expects revenue growth in the range of 3-4% this year and EBITDA growth in the range of 5-6% (previously 6-7%) and EBIT growth in the range of 3-5% (previously 6-8%).


Other key financial results include:


  • Sales revenue grew 3.2% to $12,644 million, while total revenue grew 2.7% to $12,710 million.


  • Reported EBITDA rose 3.1% to $5,334 million. Reported EBIT fell 1.3% to $3,079 million, in line with expectations.


  • Retail business units grew revenue 4.1% or 5.1% excluding handset sales.


  • Mobile services revenue grew 12.4%, with 284,000 postpaid SIOs added. Total mobile ARPU grew almost 10% to $53. At the end of December, the wireless broadband SIO base reached 828k, which is close to 50% of the total market.


  • Retail broadband revenue grew 31.3%, with fixed broadband SIO growth three times our nearest competitor.


  • IP Access data revenue grew 28%.


  • Foxtel revenues grew 13%.


  • Sensis grew sales revenue 8.4%.


  • Full time employment levels were reduced by 1,300, bringing the total reduction to more than 10,000 since 2005.


  • Retail broadband revenue in the half was $1,204 million, up 31.3% year-on-year. The number of customers on high-speed broadband plans (20Mbps or more) more than doubled to 200,000 helping ARPU increase 6.1%.


  • IP and data revenue growth accelerated to 10.7%, driven by a 28.2% increase in IP access revenue to $323 million.
http://www.telstra.com

Sol Trujillo to Step Down as Telstra CEO on June 30

Sol Trujillo will step down as chief executive of Telstra effective 30-June-2009. Trujillo and the company's Board agreed that now was a suitable time for a transition to a new CEO. The company will now formally commence a wide-ranging search for a suitable successor.



Prior to joining Telstra in 2005, Trujillo was CEO of London-based Orange, the first American to lead a CAC-40 company; President and CEO of US West Dex Inc.; President and CEO of US West Communications; and CEO and Chairman of US West Inc.


"Telstra is outperforming domestic and global peers in virtually every category. We are well positioned to hit the key transformation targets we set in November 2005 and I have every confidence that Telstra will continue to deliver world-leading results for shareholders," Trujillo said.
http://www.telstra.com

See also