Telstra Faces Execution and Regulatory Risks as It Launches New Five-Year Plan

Strong Financial Performance

Telstra Group Limited has delivered a robust set of financial results for the full year ended 30 June 2025, reporting an underlying EBITDA of $8.6 billion and an underlying net profit after tax (NPAT) of $2.3 billion. The company’s underlying return on invested capital (ROIC) improved to 8.5%, reflecting disciplined capital allocation and operational efficiency. Earnings per share rose to 19.1 cents on an underlying basis, supporting a fully franked dividend of 19 cents per share, a 5.6% increase on the previous year.

Completion of T25 Strategy and New Strategic Direction

FY25 marked the successful completion of Telstra’s T25 strategy, which focused on elevating customer experience, extending network leadership, driving sustainable growth, and fostering a workplace where people want to work. The company exceeded its customer experience target, achieving a Group Episode Net Promoter Score of +47 and 95% 5G population coverage. Building on this momentum, Telstra announced its Connected Future 30 strategy, a five-year plan doubling down on connectivity and radical innovation, particularly in artificial intelligence (AI), aiming to be Australia’s number one choice for connectivity.

Network Investments and Technology Leadership

Telstra continued significant investments in its network infrastructure, including $12.4 billion over seven years in mobile networks, with $4.7 billion directed to regional areas. The Intercity Fibre Network expanded with the Sydney to Canberra coastal route ready for service, and the company launched Australia’s first satellite-to-mobile messaging product in partnership with SpaceX’s Starlink. Strategic partnerships with Microsoft and a new joint venture with Accenture underpin Telstra’s AI ambitions, including the establishment of an AI Silicon Valley Hub to accelerate innovation and workforce capabilities.

Capital Management and Shareholder Returns

Telstra’s strong earnings growth and balance sheet strength enabled the completion of a $750 million on-market share buy-back in June 2025 and the announcement of an additional $1 billion buy-back for FY26. The company maintained an A-/A2 credit rating from Standard & Poor’s and Moody’s, reflecting financial discipline. Total dividends paid exceeded $2.1 billion, reinforcing Telstra’s commitment to returning value to shareholders while supporting ongoing investment in network and technology.

Governance and Leadership Changes

The Board saw notable changes during FY25, with the retirement of long-serving director Niek Jan van Damme and the appointment of David Lamont, a seasoned CFO with extensive capital management expertise. Brendon Riley, CEO of Telstra InfraCo, announced his retirement effective September 2025, with Steven Worrall appointed as his successor. The Board also restructured its committees to enhance governance focus on audit, risk, sustainability, and remuneration.

Sustainability and Risk Management

Telstra made significant progress on its sustainability targets, reducing combined scope 1 and 2 emissions by 44% and scope 3 emissions by 43% from FY19 levels. The company invested in renewable energy projects and network resilience initiatives to address climate change impacts. Risk management remains a priority, with strategic execution, network and technology resilience, cybersecurity, regulatory compliance, and climate adaptation identified as key risk areas. Telstra continues to embed risk considerations across its operations and strategy execution.