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Telstra reaffirms guidance

Telstra says strong and profitable customer growth will offset higher than expected fall in revenue from Yellow Pages in current financial year.

Telstra Corporation says strong and profitable growth in mobile and broadband customer numbers will offset a higher than expected fall in revenue from its Sensis business in the current financial year.

The telco has reaffirmed its guidance of low single-digit percentage growth in revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) in the 2011/12 financial year.

Telstra continued to record strong growth in mobile customers and also added fixed broadband customers in the three months to September, chief executive David Thodey said.

"Importantly, we are adding those new customers profitably and without sacrificing average revenues per customer," he said in a statement.

But weakness in the Sensis business, which owns the Yellow Pages, will mean a different mix to Telstra's earnings and revenue mix in the year, he said.

Sensis has experienced lower than expected takeup of digital products by small businesses, and revenues are also lower than expected because sales completions are taking longer than expected.

Also, the rate of decline in Yellow Pages print directories has risen significantly more than expected.

That will mean a drop in revenue whose percentage will be in the high teens for the full year, Thodey said.

"Our strong performance in core and growth businesses, coupled with strong mobile profitability and productivity improvements, means Telstra remains on track to meet guidance for fiscal 2012," he said.

Updating investors on the business on Friday, Thodey also announced the merger of all of Telstra's media businesses into one division.

The new Telstra Digital Media division will manage the telco's media capabilities, including Sensis, BigPond, Trading Post, IPTV, Foxtel and other digital content arrangements.

"As digital media and video content continues to grow it is important that we build network infrastructure to meet this demand," Thodey said.

"We will also continue to integrate this content, making it available to our customers across multiple channels including mobiles, tablets, home entertainment systems and the internet."

Current Television New Zealand chief executive, Rick Ellis, is due to join Telstra in January to head the digital media division.

Thodey also said Telstra would invest $100 million over four years to upgrade its media infrastructure, improving the delivery of broadcast quality video streaming to customers connected to the internet.

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More about: etwork, Foxtel, mobiles, Telstra, Trading Post, Yellow Pages

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