Telstra 2015 Annual Report Download - page 9

07
_Telstra Annual Report 2015Chairman and CEO Message_
We have also switched on Australia’s
largest Wi-Fi network, Telstra Air®, with
4,000 Wi-Fi hotspots already provided in
more than 250 towns and cities at launch.
More than 50,000 Telstra Air members
have joined the network.
We aspire to offer Australians access
to two million hotspots across the
nation by 2020, and we already provide
access to more than 16 million
international hotspots through our
partnership with Fon Wireless Ltd.
Throughout the year, we continued
to transform our internal business
processes to streamline the way we
work and remove internal barriers that
impede productivity. The total value
achieved through our productivity program
in FY15 was approximately $1 billion,
including expense benets, revenue
benets, cash and capital expenditure
benets and avoided costs. We have
reinvested these benets in the business
to support our customer advocacy
initiatives, growth in our customer base
and building new growth businesses.
Build new growth businesses
Our strategic growth plan is designed
to position the company for continuing
success into the future.
Investing in new businesses and
growing telecommunications services
in Asia supports our growth ambitions,
and signicant progress has been made
this year. We have made a number of
acquisitions, including Pacnet Limited,
a provider of connectivity, managed
services and data centres in the Asia
Pacic region.
The Pacnet acquisition increased
the scale and capability of our xed
infrastructure, network density and
reach across the region, as well as
our customer base and operational
capability. In a recently published
Gartner report7 on network services
in the Asia Pacic, as a combined entity,
Telstra and Pacnet were ranked number
one for low-latency and high capacity
networks, with the best submarine
cable infrastructure in the region.
We announced our joint venture (JV)
with Telkom Indonesia in the rst half
of the year. The JV launched a suite
of Network Applications and Services
(NAS) in the second half, for domestic
enterprises and multinationals
operating throughout Indonesia.
Another growth opportunity, Telstra
Health™, was formally launched during
the 2015 nancial year and will develop
and deliver innovative technology
solutions across the health industry.
National Broadband Network (NBN)
During the year we nalised revised
NBN Denitive Agreements with NBN Co
and the Commonwealth, preserving value
for shareholders, as we maintained the
overall value of the original agreements.
These Agreements became effective
in June 2015.
As with the original agreements,
the estimated value of the revised
agreements is based on a range of
dependencies and assumptions over
the long term life of the agreements.
Part of the community
Telstra is committed to showing we
care in the way we respond to important
economic, social and environmental
challenges.
Our longstanding investment in building
people’s digital skills and capabilities
reects our belief that digital connectivity
is an increasingly essential service.
This year we reached almost 117,000
people through our digital literacy training
programs, and helped over one million
vulnerable customers stay connected.
We are also committed to minimising
our environmental impacts and to working
with our customers to achieve better
environmental outcomes. This year,
our total carbon emissions decreased
by 1.3 per cent despite data loads on
our network increasing by 36 per cent.
This meant our carbon emissions intensity
reduced by 27 per cent, leaving us well
positioned to meet our three year target.
Looking ahead
We have a clear strategy, and our focus
for the year ahead remains on improving
our customer service, ongoing investment
in our network advantage and building
pathways toward future, sustainable
and long term growth.
We operate in a dynamic and competitive
environment where technology is taking
us into a world of rapid change, constant
innovation and competition. We see
great opportunity to embrace change,
great opportunity for those of us that
embrace technology innovation and great
opportunity for Australian companies
and Australia.
We understand that we need to continue
to innovate and to ensure we can build our
capability in our growth areas. At Telstra,
we are investing in becoming a truly world
class technology company that empowers
people to connect.
In 2016 Telstra expects to deliver
mid-single digit income growth and
low-single digit EBITDA growth.
Free cashow is expected to be
between $4.6 billion and $5.1 billion
and capital expenditure to be around
15 per cent of sales to fund increased
mobile network investment.
This guidance assumes wholesale
product price stability and no impairments
to investments, and excludes any proceeds
on the sale of businesses, mergers and
acquisitions and purchase of spectrum.
Capex to sales guidance excludes
externally funded capex.
The Australian Competition and
Consumer Commission is consulting on
new Access Determinations including
a draft determination on Fixed Line
Services. While Telstra disagrees with the
draft decision on xed line services, the
EBITDA reduction in FY16 would be up to
$90 million if implemented from October.
We would like to thank the leadership
team and all of our employees for their
commitment, effort and initiative. We also
thank you for your loyalty as shareholders.
Catherine Livingstone AO, Chairman
Andrew Penn, CEO
7 Source – Critical Capabilities for Network Services, Asia/Pacic, Gartner 2015 – www.gartner.com
Your comments and feedback are welcome and can be provided to
investor[email protected]elstra.com, via phone on 1800 880 679, or in the mail
to the Investor Relations Department, Telstra, Level 25, 242 Exhibition Street,
Melbourne, VIC 3000.