Telstra 2007 Annual Report Download - page 25

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Telstra Corporation Limited and controlled entities
Full year results and operations review - June 2007
EVDO with a significant increase in SIOs as highlighted above. In addition, arriving with the launch of the
Next G™ network was the education of the market of new data services. The higher speed network improves
the customer experience which has led to a previously non-active data population now using data. This is
reflected in the average overall mobile data revenue per user per month increasing by $3.04 or 41.8%. Mobile
data is now 22.3% of mobile ARPU due to the increased data content offerings including FOXTEL by mobile†,
BigPond® music downloads, videos and games. Wireless email has also contributed to the increase in non
SMS data revenues primarily driven by an increase in Blackberry‡ SIOs and usage.
Average revenue per user (ARPU) (inclusive of interconnect) increased by $1.55 to $46.34 for the year ended
30 June 2007 on a blended basis. This has been driven by higher postpaid ARPUs experienced on our 3GSM
base compared with the decreases in 2GSM and CDMA technologies with the $20 per month ARPU premium
maintained. Data usage under the 3GSM network has been a key driver of this increase.
Wholesale mobile service revenue increased by 41.7% to $51 million due to growth in the Wholesale GSM
resale product and GSM postpaid due to new contracts acquired.
Mobiles interconnection revenue has declined 4.8% to $593 million. The main product driving this is mobiles
terminating revenue which has been impacted by a retrospective regulatory pricing adjustment totalling
$97 million made to the mobiles terminating access (MTA) rate. The rate has dropped from 15 cents per call
minute in fiscal 2006 to 12 cents per call minute in fiscal 2007. The decline was despite a 12.0% increase in
termination volumes resulting from growth across the entire market. GSM wholesale domestic roaming
grew by $47 million as Hutchison 3G Australia customers use Telstra’s GSM network services when outside
their service area. A $9 million drop in CDMA roaming is due to migration of Hutchison's CDMA customers to
3GSM. SMS interconnect has grown by $29 million due to an increase in traffic resulting from growth in
mobile SIOs as well as a continued increase in the popularity of text messaging as a cheaper alternative to
mobile voice calling.
Revenue from handset sales increased by 53.7% to $718 million primarily due to growth in the number of
3GSM mobile handsets sold. This growth is attributed to the launch and popularity of the Next G™ network
along with higher priced 3GSM handsets due to their advanced functional capabilities. The move away from
CDMA and 2GSM to higher priced 3GSM handsets has also had the effect of increasing the average revenue
of handsets sold.
The deactivation rate has decreased during the year by 3.0% due to a decrease in prepaid mobile
deactivations by 6.9% as a result of the introduction of a new billing system, which has allowed us to provide
better offerings to customers. This rate has also been impacted by the prepaid SIOs which were unable to be
deactivated for the period due to system limitations as mentioned above. This was offset by postpaid
deactivations that increased by 0.3% due to a clean up of our customer base.