Telstra 2007 Annual Report Download - page 26

23
Telstra Corporation Limited and controlled entities
Full year results and operations review - June 2007
Internet
Revenue from internet services is driven primarily by:
• the increased use of the internet by businesses and consumers;
• the movement of our customers from basic access and associated calling products to other access
services such as ADSL;
• demand for greater bandwidth services such as broadband; and
• the increased need to access broadband services on a mobile basis.
While internet markets have been experiencing growth, price competition remains. We expect that these
trends will continue.
(i) Prior year figures have been restated to include the gross up of mobile broadband revenues relating to EVDO/HSDPA and data pack usage.
(ii) Telstra internet direct (Retail ADSL), Hyperconnect and Symmetrical HDSL are not included in retail broadband revenue and subscriber numbers.
(iii) Our broadband subscribers include 533 thousand subscribers relating to our wireless broadband products and data packs ($5 to $179) for June 2007
and 97 thousand for June 2006. Our prior year figure has been adjusted to reflect this change.
Our narrowband products allow customers to connect to the internet from any telephone line in Australia.
Our broadband products allow customers to experience an “ always on” connection to the internet,
although this is not available to all lines due to technology limitations. During the year there was continued
demand for capacity combined with competitive pricing which resulted in customers migrating their
narrowband services to broadband. This trend placed additional price pressure on our narrowband products
and resulted in a significant decline in our narrowband revenues.
There are a range of internet products and packages offered under our BigPond® brand. Telstra BigPond®
home and business packages offer dial-up modem services to residential and business customers across
Australia. Telstra BigPond® broadband provides broadband internet services to consumer and business
customers via HFC (Hybrid Fibre Coaxial) cable, ADSL (including ADSL 2+) and satellite. We also provide
wireless broadband services on the Next G™ and CDMA networks.
During fiscal 2007, our internet revenue grew by 35.4% to $1,945 million. The subscriber base for our
broadband products grew significantly, partially due to migration from narrowband products but also due
to growth in market share. As at 30 June 2007, we had approximately 4.8 million internet customers with
over 2.4 million of these being broadband retail customers. There has been a significant rise in demand for
broadband resulting from competitive pricing strategies and ongoing demand for applications and content.
Internet
Year ended 30 June
2007 2006 Change 2007/2006
$m $m $m (% change)
Narrowband . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 220 (76) (34.5%)
Retail broadband (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,213 730 483 66.2%
Wholesale broadband . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 568 469 99 21.1%
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 18 2 11.1%
Total internet revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,945 1,437 508 35.4%
Broadband subscribers - retail (in thousands) (i)(ii)(iii) . . . . . . . . . . . . . . . . . . . . . . 2,406 1,506 900 59.8%
Average broadband retail revenue per subscriber per month $'s (i) . . . . . . . . . . . . . . . 51.67 51.76 (0.09) (0.2%)
Average broadband retail revenue excl. wireless broadband per subscriber per mont h $'s 48.49 48.72 (0.23) (0.5%)
Broadband subscribers - wholesale (in thousands). . . . . . . . . . . . . . . . . . . . . . . . . 1,762 1,427 335 23.5%
Average broadband wholesale revenue per subscriber per month $'s . . . . . . . . . . . . . 29.67 33.75 (4.08) (12.1%)
Narrowband subscribers - retail (in thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . 654 1,027 (373) (36.3%)
Average revenue per narrowband subscriber per month $'s . . . . . . . . . . . . . . . . . . . 14.26 16.40 (2.14) (13.0%)
Note: statistical data represents management's best estimates.