TelstraClear falls short of growth target

By PETER GRIFFIN

TelstraClear cut its losses in the six months to December 31 but, with only 3.5 per cent growth in revenue, is not yet the disruptive force it set out to become.

The telco, 100 per cent owned by Australian parent Telstra, had revenue of $321 million, up $10 million on the same period in 2002.

Retail revenue grew 6.5 per cent, but revenue growth overall was softened by rate reductions in the wholesale fees telcos charge one another on an international level.

It lost $18 million before interest and tax and improved its ebitda (earnings before interest, tax, depreciation and amortisation) margin to 20.1 per cent from 13.8 per cent.

That came as Telstra's parent doubled its profit to A$2.3 billion ($2.5 billion) from A$1.1 billion, the earlier result hit heavily by a large write-down at its Asian cable venture Reach.

TelstraClear chief executive Rosemary Howard said the pace of regulatory change had been slower than expected and access to residential wholesale products had still not been forthcoming.

"It's not quite where we wanted to be. We aimed to be in double digit [growth]."

TelstraClear had cut its operating expenditure by $10 million to $339 million as efficiencies from the merger of Clear and TelstraSaturn trickled through.

Capital expenditure for the period was up $4 million to $59 million, but Howard said the company had more money at its disposal than it was willing to spend given the regulatory uncertainty.

TelstraClear is arguing hard for the Government to reject a Commerce Commission report dismissive of calls for Telecom's copper phone network to be opened up, but recommends regulation that would aim to stimulate the take-up of competing high-speed internet products.

TelstraClear has put out request-for-information documents to equipment vendors about "wireless local loop" technology that would allow it to reach the masses without depending on Telecom. But Howard said the wireless solution was not "plan B" should the Government go with the commission's recommendations.