Telstra's cloud services growth soars

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Telstra's cloud services growth soars

Bolsters business, government revenue.

Telstra's cloud services revenue grew 33 percent this year, fuelling the carrier's growth ambitions to expand the business into Asia.

The carrier today reported a 17.7 percent increase in revenue from its Network Applications and Services (NAS) business, which includes cloud services, unified communications and managed network services.

In addition to the increase in revenue from cloud services — which include storage and compute capacity products as well as software-as-a-service — the telco saw unified communications revenues rise 17.7 percent and managed network services revenues up 20.7 percent year-on-year.

The results weighed positively on the performance of Telstra's Business division, which returned to growth "underpinned by NAS revenue" of $278 million, 26.4 percent higher than in FY12.

Telstra's Enterprise & Government division also grew overall, again underpinned by a 14.7 percent increase in NAS revenues.

The NAS business has grown steadily year-on-year but the financial year 2013 results are particularly strong for Telstra as it eyes expansion of the business through Asia.

The telco came under fire last month after it emerged that about 170 full-time roles in the NAS business would be offshored to India, representing about 15 percent of the entire NAS workforce.

CEO David Thodey told financial analysts today Telstra's Asian growth strategy for NAS would mean increasing the number of Telstra employees overseas.

"Part of the NAS growth strategy is to expand into international markets, particularly in the Asian region," Thodey said.

"There are discussions underway regarding the establishment of delivery centres in conjunction with industry partners located in India.

"This is important for us as we leverage our Asian network assets to deliver NAS service offerings in that region and serve Asian customers."

He also said increasing employee numbers outside of Australia is "the result of our need to remain competitive and the requirement for scalability".

Telstra reported an increase in the number of NAS Operations staff by 72 personnel.

NAS customers include Jetstar, Volvo, Fitness First and the Department of Defence.

Mobile beefs up overall results

The telco reported a 12.9 percent year-on-year increase in net profit after tax, rising from $3.4 billion in FY12 to $3.9 billion in FY13.

The carrier added 1.3 million mobile customers in Australia over the course of the financial year, for a total customer base of 15.1 million, a 9.1 percent year-on-year increase.

The 1.3 million includes 452,000 new mobile broadband customers and 423,000 postpaid mobile phone customers.

Telstra did not detail the remainder of the figure, but did provide a full breakdown of how its mobile customer base is contributing to revenue.

Mobile revenue overall rose by six percent to $9.2 billion in FY13. The big increase came from mobile broadband, where revenues grew 17.5 percent to just under $1.2 billion, and hardware sales, where revenue is up almost 12 percent to almost $1.5 billion.

Telstra also reported strong results in SIM cards provided for machine-to-machine (M2M) applications, such as in smart meters.

Revenue rose $10 million between FY12 and FY13, coming in at $90 million, and it's an area that CEO David Thodey saw more revenue upside.

"Some of the ARPUs [average revenue per user] are very small but you get very high volumes so you get great opportunity," Thodey said on the M2M portion of mobile.

Telstra has been trying to build its M2M capabilities since mid-2010.

The carrier also started seeing fresh NBN income streams during the financial year, including the first payments for disconnecting copper users and transitioning them onto fibre.

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