Australia’s largest telco has released an annual report that perfectly reflects how the industry has been forced to adapt to new market conditions.
Telsta’s 2012-13 revenues were up slightly (1.9%) to $26 billion, while profits grew 12.9% to $3.9 billion, reflecting significant cost-cutting measures like job cuts and more efficient supplier agreements.
Telstra’s White Pages and Yellow Pages print businesses are getting crushed, dragging down its media revenues.
Fixed line revenues are down slightly, thanks to the declining popularity of fixed phone lines.
More positively, mobile revenue is going strong: customer numbers grew 8.6% to 15.1 million, with 2.8 million devices on 4G.
But cloud computing is Telstra’s fastest-growing business by far, with revenues growing 33% throughout the year from a relatively small base.
Cloud computing is part of Telstra’s Network Applications and Services (NAS) arm, which shed 90 contractors and moved 170 Australian positions to India last month.
Telstra and its largest competitor, Singtel Optus, have been investing heavily in cloud computing infrastructure in recent years in response to some major shifts in the industry.
Fixed line services will soon become a more crowded space as the Australian Government rolls out its National Broadband Network and more people ditch phone lines for VoIP.
Growth in mobile services has stalled because pretty much everyone in Australia already has a mobile service so there are few new customers to go around.
Meanwhile, Gartner analysts expect the Australian cloud market to grow 23% to reach $US3.2 billion this year and $US5.2 billion in 2016.
For Telstra and Optus, the challenge now is how well they manage the transition into cloud-heavy businesses and whether their brands are strong enough to pose a significant threat to others like Fujitsu, Dell and Macquarie Telecom.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.