Economic Situation of Telstra Corporation Limited - Case Study Example

BUSINESS REPORT By (Name) Course: Tutor: Institution: City: Date: Business Report Executive Summary Telstra Corporation Limited is the largest telecommunications and media company within Australia. Its functionality is in building and operating telecommunications networks as well as market voices, internet access services, mobile, pay television and increased entertainment opportunities and services. The company has increased its annual growth rate, financial revenue returns, customer numbers and overall operational margins. However, there is need to increase the growth in order to solidify its market share in the country and beyond. Thus, the article looks at the latest financial returns and analyses their contexts. It delivers the business report and ensures there is reliance with the rates from Reserve Banks of Australia according to the forecast for the coming financial periods. It then delivers the recommendations for maximum operational profitability. Introduction Telstra Corporation Limited is the largest telecommunications and media company within Australia. Its functionality is in building and operating telecommunications networks as well as market voices, internet access services, mobile, pay television and increased entertainment opportunities and services. The telecommunications services in Australia had been controlled by the Postmaster-General’s Department, which had been formed in the year 1901. Before that, each colony was responsible for its operations. After the renaming of the Australian and Overseas Telecommunication Network to Telstra in the year 1993, significant changes to the services and landscape within Australia were realized. The company has been undergoing transformational agendas in order to become focused on sales and services. In addition, the agenda designed by customer services is defined within the company’s operations. The two main strategies for the company’s perspective are based on market share and customer service recovery. As the company manager, it is my duty to present the business report on the current economic situation of the organization, especially from September 2015 as well as making the advice and forecasts in tandem with the central bank’s cash rates movement. Body Financial Results and Implications Figure 1 Graph 2 Telstra Company The company rerecorded strong growth in the consumer numbers within the mobile and fixed data. The average percentage increased by 5.3% in the retail sector, while the consumer and business numbers were 6.5 and 2.95 respectively. The results can be attributed to growth in the mobile postpaid and handheld communications among the consumers while cloud hosted solutions provided for the impetus of the regime toward the financial year of 2015. There was marked strategic acquisition of the company monitoring services as well as the security provisions in the data, information and telecommunication. Here was a general growth in the enterprise mobility in the country as global connectivity signified increased interest among the business partners and consumers too. Wholesale revenue growths were attributed to the increased infrastructure receipts from completion of the transit network and increased streamline rolled out for uses in connectivity. Figure 2 Chart 1 Telstra Company Within the five years of the second quarter results, the turnover recorded showed decreased drive in the fixed voice revenues. The improved products and offers, together with the retention arte of the customers signified a drop in the maintained numbers by 4.3%. The retailed fixed data growth climbed to 1.1%, which was the highest in the last three years of the company’s operations. The margins of the fixed data provided underlying improvement in the offset mechanisms put in place by the strategic team on upfront costs as well as customer connections on the NBN provisions. Retail bundles topped at 280,000 as well as strengthening the offer markets due to the entertainer value and success of its introduction. The retention rate was also responsible for the turnover. It made the customer numbers based on the bundle plan reach a highest level of 71%. Figure 3 Chart 2 Telstra Company The revenue growth gained from mobile services was at 7.2%, indicating the highest of the last three years. Postpaid handheld growth in the same time retention marked an improvement of 1.6% despite the aggregate measures that had been put in terms of the costs for upgrade and rolled out connectivity. Unique users in the handheld category recorded a significant increase of 3.5% while the data usage in the whole country recorded an improvement of 6.7%. Successful expansions are also responsible for the positive number sand impacts realized in the overall returns via M2M protocols. The lowered effects on taxes and data rate in excess of the allowed numbers were responsible for the stagnation in data allowances. The customer numbers were the increased by determination of the lengthened process in retail ventures and product differentiation. Figure 4 Graph 2 Telstra Company Figure 5 Chart 2 Telstra Company Continued transition from the legacy products to the internet protocol provided significant results within the closing stages of the 2015 period. Customer connections deliberated the process of increasing access growth, as the demanded was enough to build on the positive turnout across the country. According to Jeffs (2008, p.19), other data and products from calling giveaways from the company at promotional base and invitational circumstances helped in driving the consumers into migration. The latter was marked by the attention towards traditional data products into the IP generated access and data solutions. Unified communications on the other hand were responsible for the decline of 1.2% in terms of access lines and reduction of fixed data. Yield pressure and overall financial management duties improved on the operations functionalities. Despite the growth the impact on revenue from IP markets and traditional bases, the decline was marginal but should be taken into consideration. Recommendations and Forecast With the current revenue rates and borrowing levels as input by the reserve bank of Australia, Telstra Company can maximize on the offloading legacy assets that are no longer in working. With the Sensi directories selling off at 70% into private equity, the company can gain a stake of close to $54 Million and manage the balance sheet approval within the coming year (Heber 2015, p.1). The selling off legacy is prudent ion order to acquire the line assets in governmental deals and renegotiation in the long-term expansion program. The dealings would ensure that the company has subsequent assets within its security and the governmental backing especially where the deal would be immediate before the close of the year. In addition, it will also ensure that the company remains relevant on the returned investors as well as performance within the volatile market of telecommunication. It is also time the company made investment through purchase of new companies with intended chipping especially on the online reservations site and cloud-based communication provider. The security company like Dimmi, Whispir and Bridge-Point should serve as incentives for the company’s increased expansion plans and data management solutions (Heber 2015, p.1). The increased population and interest growth of data connectivity can propel the growth of the company’s services, especially when the rival organizations are increasing their market share. By differentiating its security products and software outreach, it stands to benefit across all boards together with the telecommunications provisions. Significant revenues can also be sourced from the purchase of new companies as fundamental shifts and business-working models keep changing in the market. Adaptable changes to the current conditions provide better services to the customers as well as experiences to satisfaction on the overall basis. One the prime investments opportunity for Telstra Company is through targeting startups. Despite the company’s use of research availability and ensured product innovation, there is bound to be competition on the overall basis from startups that appeal to different categories of customers. The company has to be vocal in the investment procedure in order to help it maintain its position within the country as the market leader (Heber 2015, p.1). In addition, startups provide a simple testing-field experience into the landscape of future demands and preferences of the customers. They deliver the changes within the industry as anticipated in product determination and delivery. Telecommunications are also dependent on the innovative capacities of the consumers without relying on the traditional avenues. This is where startups capture the essence of service delivery and product mix. Therefore, the investment opportunity is sure to reap both short and long-term benefits. Telstra Company can also take advantage of the new industries in the healthcare sector. The anticipation of health spending can reach over $200 billion within the next 15 years as the reliability in service provision and delivery is a complex affair. Through the development of the healthcare technology and division of business terms, the company can reap huge rewards. For example, basing on the connectivity between the doctors and their patients through e-health communication or reliance, the service providers and the utilities can be merged at a faster rate with increased reliability. It also can help in real time feedback with reliable feedback avenues and monitoring. The information technology will be responsible for the overall maintenance and creation of the communication channels. Other proceeds and services will then rely on the Telstra model in order to derive their own mechanisms, increasing the company’s advantage. The best form of growth within the Telstra Company is through expansion and diversification. In Australia, the company’s services and products cloud the market share. The annual growth rate comes down to market dynamics and alterations of the customer preference. Through availability of opportunity in different markets, the company can increase its revenue base with steady supply and monitoring process. It can for example branch out to Asia, as it is the closes to the home market. Through partnerships and acquisitions, the company can increase its revenue base. The company’s Chief Executive Officer is instrumental in ensuring that the expansion process is attained with the best interest and calculated process. It requires flexibility, considerable financial input, cost management on the test period before full deployment is decided on. Depending on the customer responses and operations ability, the company can make it permanent and long-term. Finally, the company can also find new ways of increasing the old infrastructure within the traditional market. Telecommunication companies have the futuristic process of increasing their reach and coverage within specifies periods. For example, the company should look to intensify the WiFi networks across the country within five years. This will have to institute building of hotspots wall over the country and establishment points of the infrastructure (Heber 2015, p.1). It is therefore prudent for the company to minimize losses and further financial costs through using the old infrastructure carefully and creatively. Innovative thinking can use the process, as an important step to solidify the company’s stature in the country and beyond better services and products to the customers will have them reliant on the company throughout. Conclusion Telstra Corporation Limited is the largest telecommunications and media company within Australia. Its functionality is in building and operating telecommunications networks as well as market voices, internet access services, mobile, pay television and increased entertainment opportunities and services. The delivery of the business report on the current economic situation of the organization, especially from September 2015 as well as making the advice and forecasts in tandem with the central bank’s cash rates movement is of priority. The company needs to offloading legacy assets that are no longer in working, purchase of new companies, targeting startups, take advantage of the new industries in the healthcare sector, expansion and diversification as well as increasing the old infrastructure within the traditional market. References Heber, Alex, 2015, 6 things Telstra’s CEO is doing to change the company, Business Insider, 1. Jeffs, C, 2008, Strategic management, Los Angeles, SAGE. http://www.ECU.eblib.com.au/EBLWeb/patron/?target=patron&extendedid=P_483386_0. Telstra Company, 2015, Financial Results. https://www.telstra.com.au/content/dam/tcom/about-us/investors/pdf%20D/Full-Year-2015-Financial-Results-CEOCFO-Analyst-Briefing-Presentation.pdf Read More