Telstra 2007 Annual Report Download - page 32

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Telstra Corporation Limited and controlled entities
Full year results and operations review - June 2007
Pay TV bundling
Pay TV bundling revenue is generated through reselling FOXTEL† and Austar* services to consumers with an
eligible fixed line service with us. Total pay TV bundling revenue grew by 7.5% to $344 million for fiscal 2007,
with FOXTEL revenue growing $34 million, offset by a decline in AUSTAR revenue of $10 million.
FOXTEL† bundled services revenue grew by 12.3% to $310 million after an increase in subscribers by 22.3%,
largely due to the FOXTEL†
conversion campaign which targeted both new customers and existing analogue
customers and encouraged them to sign up to the digital network. FOXTEL IQ† , an interactive digital feature
available to all FOXTEL digital† subscribers also contributed to revenue growth with substantial increases in
subscribers during the period.
As part of the completion of the migration strategy to convert existing analogue subscribers to the digital
network, the analogue cable service was closed in January 2007 followed by the analogue satellite service
in March 2007. As a result of this migration all FOXTEL†
subscribers are now on the digital service, compared
with 78.6% in the previous fiscal year.
AUSTAR* bundled services revenue declined by 22.7% to $34 million mainly due to a declining subscriber
base, as a result of limited marketing activity undertaken throughout the period.
Other minor items
Revenue from other minor items decreased by 24.7% to $271 million for the year ended 30 June 2007. The
revenue decline was mainly due to lower external construction and commercial and recoverable works.
External construction revenue decreased by 68.5% to $34 million due to a re-classification of revenues to
managed industrial networks of $55 million and a reduction in external construction of $31 million as we
progressively wind down our carrier customer projects and gradually move out of this area. These declines
are partially offset by growth in revenue of $24 million generated from the construction work building 3G
sites for our 3GIS partnership with Hutchison.
Commercial and recoverable works revenue declined by 43.9% to $32 million mainly due to the conclusion
of certain contracts relating to the FOXTEL digital†
upgrade and the discontinuing of network build projects
for our competitors.
Pay TV bundling
Year ended 30 June
2007 2006 Change 2007/2006
$m $m $m (% change)
Pay TV bundling revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344 320 24 7.5%
FOXTEL† Pay TV bundling subscribers (thousands) . . . . . . . . . . . . . . . . . . . . . . . . . 357 292 65 22.3%
Austar* Pay TV bundling subscribers (thousands) . . . . . . . . . . . . . . . . . . . . . . . . . 33 51 (18) (35.3%)
Total Pay TV bundling subscribers (thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . 390 343 47 13.7%
Note: statistical data represents management's best estimates.
Other minor items
Year ended 30 June
2007 2006 Change 2007/2006
$m $m $m (% change)
HFC cable usage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 84 (4) (4.8%)
Commercial and recoverable works . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 57 (25) (43.9%)
External construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 108 (74) (68.5%)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 111 14 12.6%
Total other minor items revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271 360 (89) (24.7%)