Telstra predicts “flattish” sales growth

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Telstra predicts “flattish” sales growth

Competition weighs down revenue expectations.

Telstra has revised its sales revenue guidance for the current fiscal year to be “flattish” compared to what it achieved a year ago.

The number one carrier said the strength of the Australian dollar and tough operating conditions in Hong Kong were contributors to the “lower-than-expected growth”.

On the product front, ULL growth and competitor’s mobile offers were eating into its sales revenues, as was “an accelerated move to wireless-only homes which is impacting revenue in PSTN and fixed broadband products.”

“We expect negative sales revenue in the first half of the fiscal year for the reasons above,” Telstra said in a filing to the Australian Stock Exchange.

“This forecast includes the impact of the sale of KAZ last year.

“Following the continuation of trends seen in the second half of fiscal 2009, Telstra now expects sales revenue in fiscal year 2010 to be flattish compared to fiscal year 2009.”

The “flattish” forecast was the main revision compared to Telstra’s last update at the investor day in October.

At that time, Telstra chief David Thodey said the incumbent was on track to achieve “low single digit growth in revenue, earnings before interest, taxes, depreciation and amortisation (EBITDA) and EBIT”.

Only the sales revenue expectation was revised in the latest forecast today; EBITDA and EBIT forecasts remained the same.

Telstra also said it “remained confident of achieving its 2010 free cashflow target of $6 billion.”

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