Australia's former monopoly phone company Telstra has produced much stronger results than the declining profits and sales expected by the market from Spark, the new name for Telecom.
Telstra's 15 percent jump in net profit of $A4.3 billion, as well as its 3.4 percent rise in sales for the year ended June, is in sharp contrast to the 2 to 3 percent fall in sales that the market is expecting from Spark.
Telecom will report its results for the year ended June on Friday 22 August.
Marc Whittaker, Milford Asset Management's head of investment research in Australia, said Telstra and Spark were similar in many ways.
"They're both undertaking what the PR people would call a journey of transformation, moving from an 'old world' telco to a new age, 'new world', digital-based, content-rich telco provider, or however you want to term that phrase," he said.
But, he said, Telstra was a lot further down that path.
"They've gone through the years of re-investing into the business, spending higher on capex to get their systems up to what's required, going through years of the top line being rather subdued or even sliding backwards while they digested the fixed line business continuing to decline, and not yet being offset by the new lines of business in data and broadband and mobile telephony," he said.
"Spark is very much - not at the beginning - but it's very much in the first half of its journey."
