JPMorgan forecasts Telstra could gain up to $125 million in earnings over the next few years. JPMorgan analyst Mark Busuttil said more customers were likely to switch from Optus due to the service outage than had fled after last year’s data breach because the cyberattack had not caused any loss of service.
“It’s early days. We continue to see some elevated levels of acquisition at the moment, but you’ve got to put it in context of what we saw last year. At this stage, I wouldn’t anticipate major shifts in share,” Ms Brady said.
$1.6 billion ‘nation building’ project
Ms Brady said detailed planning was under way for an additional five routes in its intercity fibre project, and the telco plans to upgrade fibre connections for its mining, oil and gas, and energy customers in the Pilbara.
“As the largest investor in digital infrastructure in Australia, we are uniquely positioned to design and deliver this critical infrastructure which will enable ultra-fast connectivity between capital cities,” she said.
Construction of the intercity fibre project, a massive network of fibre cables which will connect all Australia’s mainland capital cities, was announced in February 2022 and commenced a month later. In August 2022, Telstra announced the first five priority routes, and construction is well under way, with more than 400 kilometres of cable already laid.
In August, Ms Brady confirmed Telstra wouldn’t sell InfraCo Fixed, which owns digital assets such as fibre optic cable, data centres and subsea cables, and is valued about $15 billion. The division had previously been earmarked for sale.
Funding for the updates plus the Viasat satellite project is expected to come at the top of the previously announced $1.4 billion to $1.6 billion guidance. The figures excluded business-as-usual expenses.
“Telstra InfraCo already has the largest fibre and duct network in Australia – 250,000 kilometres of fibre optic cable connecting 133 data centres,” Ms Brady said.
“The intercity fibre project will extend this further, with thousands more kilometres of ultra-high capacity, ultra-low latency connections.”
Telstra chief financial officer Michael Ackland also confirmed the telco expects underlying earnings of $8.2 billion to $8.4 billion and total income of $22.8 billion to $24.8 billion for fiscal 2024.
He said weaker performance across its professional service business would impact Telstra’s network applications and services (NAS) unit.
“Consistent with professional services activity in the market more broadly, our professional services growth and managed service performance will be less than expected. As a result, we do not expect NAS revenue and EBITDA to grow in FY24,” he said.