Telstra to splash $800m on network upgrades, ups dividend

Telco giant Telstra says it will splash $800 million on upgrading its 5G mobile network, as it lifted its first-half profit and dividend thanks to strong performance from its mobiles unit.

In half-year results that beat analyst expectations, Telstra on Thursday posted net profit for the six months to December up 7.1 per cent to $1.12 billion, while earnings before interest, tax, depreciation and amortisation (EBITDA) climbed 6 per cent to $4.25 billion, beating analyst consensus estimates of $4.19 billion.

Telstra hiked its dividend by 5.6 per cent. It will pay an interim dividend of 9.5 cents per share, fully franked, on March 28.

Telstra said it will capitalise on momentum on its mobiles business, investing in its 5G network, including new AI features thanks to a partnership with global networking giant Ericsson.

Chief executive Vicki Brady said demand for the company’s mobile network had tripled over the past five years, necessitating a “step change” in how connectivity is delivered.

“Over the next four years, we will increase our mobile investment by $800 million to extend our leadership and deliver customers the most advanced, resilient and reliable 5G mobile network in the country,” she said.

“This will be delivered within business-as-usual capex by directing a larger portion of overall capex to our mobile network.”

She said Telstra’s mobile network already covers more than double the area of Optus’ and around three times that of Vodafone and TPG.

On Thursday, data released by the telecommunications ombudsman showed complaints soared over the past quarter, with the 3G network shutdown having a significant impact on the reliability of mobile services for many customers.