Telstra has revised down its expected earnings for fiscal 2018 by $600 million, after factoring in the impact of NBN delays for millions of broadband consumers and a re-issued corporate plan.
The company announced its earnings before interest, tax, depreciation and amortisation (EBITDA) was revised down from $10.7 billion to $11.2 billion guidance to $10.1 billion to $10.6 billion. There were no changes to the 22¢ a share dividend.
Its total income has been revised down by $700 million. It was expected to be between $28.3 billion and $30.2 billion for 2018. This has now been revised to $27.6 billion to $29.5 billion.
The NBN delays, announced on Monday by NBN chief executive Bill Morrow, are anticipated to impact those intending to connect to the national broadband network through their existing pay TV or internet cables.
This could leave many waiting for up to nine months while technical issues are sorted out for customers on the hybrid fibre coaxial (HFC) network.
The delay specifically affects Telstra, whose previous guidance had been on the assumption that the rollout would be in line with NBN’s 2017 corporate plan.
The revised guidance also takes into account a re-issued NBN Corporate Plan 2018 in August – which reduced the number of brownfields ready-for-service premises and cut 200,000 brownfield activations compared to the previous year’s plan.
Despite the impact for 2018, the market announcement said the delay “will be modestly financially positive to Telstra over the full rollout due to the effects of a natural hedge”.
And while Telstra chief executive Andrew Penn remained elusive on Thursday about changes to the dividend, the market announcement affirmed this would remain at 22¢ a share as per its announcement in August.
Mr Penn “applauded” the NBN’s decision to prioritise customer experience and said while it affected Telstra financially, the implications would not be “long-term” in nature.
The NBN was confident it would meet its 2020 deadline of 8 million homes having access to the NBN.
The ACCC released its findings on NBN broadband advertising and whether it had improved since guidance was published to the industry in August.
“We are pleased to report that Telstra and Optus have recently changed their marketing information to provide their customers with comparable information about the typical busy period broadband speeds that they can expect on various plans,” ACCC chairman Rod Sims said.
“The remainder of the industry continues to advertise internet plans using unhelpful speed ranges, referencing off-peak speeds or failing to provide consumers with any information about the speed of their services during busy hours.”
“Potential customers trying to compare the internet services of the various providers cannot make an informed judgment about the busy period speeds they will receive. We have serious concerns about that and will be considering whether there is potential for misleading conduct that would constitute a breach of the ACL”.