14 Feb 2011

Telstra's woes continue

7:11 am on 14 February 2011

Telstra last week reported a 36% slump in first half net profit. The company is seeking to lift customer service under increasing competition from Optus, which is controlled by Singapore Telecommunications.

Telstra is starting to win new customers. Radio New Zealand's Sydney correspondent says the problem is that additional spending on call centres and other service initiatives is cutting its profit margin.

It's been a tough road for Telstra shareholders. The company's shares fell 19% last year, against a decline of 2% in the broad market.

But Radio New Zealand's correspondent says at least it's no longer fighting the federal government.

Telstra reached a deal last June to hand over its fixed-line copper network to a new national broadband network in exchange for $A11 billion in compensation.