Telstra will gain full ownership of its retail network as part of eliminating negative and unethical marketing practices that occur to the largest Telco supplier in the country.
In line with its half-year financial results, Telstra has announced major changes to its retail network by cutting ties with all independent licensees to bring all of its retail branding in-house.
Telstra’s Retail Network
The company’s retail outlets network consists of 67 Telstra-owned stores, 166-brand stores owned by private licensees and 104 other properties owned by Vita Group.
Both private licensees and Vita Group will lose the Telstra brand by 2025.
Consumer chief Michael Ackland said the move was a guarantee that Telstra would continue to keep in touch with customers looking for more digital services.
“As more customers interact with businesses online resulting in changes to the broader retail industry, we think now is the right time to bring back full ownership to further develop a consistent and integrated customer service connection across all our online channels and the network of stores, ”said Mr Ackland.
Telstra also acknowledged that the decision was in part to clean up the provider’s oversight of its staff, who in 2020 were found to unethically lob mobile plans onto vulnerable Indigenous groups who were unable to meet payments, nor were informed of the terms and conditions of the respective contracts.
Recent Unethical Marketing Practices
Allegations against Telstra include one case where the phone bill ended up in excess of $ 19,000.
The Australian Competition and Consumer Commission has filed a lawsuit in the Union Court for five stores in Western Australia, South Australia and the Northern Territory that allegedly carried out the sale.
In the six months ending December 31, the telco provider posted a 2.2 percent annual decline in its profit margin after tax to $ 1.1bn.
Telstra chief executive Andy Penn noted that the headwinds from the rollout of the NBN and a $170m hit from the COVID-19 pandemic had dented earnings, which would have been broadly flat otherwise.
Earnings Outlook
Income before interest, tax, depreciation and ammortization (EBITDA) decreased by 14.7 percent to $ 4.1bn
“After a decade of disruption following the creation of the NBN, and with its rollout now declared complete, we can clearly see the path to underlying growth ahead of us,” Mr Penn said.
“I am convinced that many of the programs we have undertaken under our T22 program, especially in the simplification of business and the installation of the digital system, will improve the experience of consumers. ”
The company’s revenue has dropped by more than 10 percent over the first half of the 2021 fiscal year to $ 12bn, largely off the back of lower mobile income from fewer hardware sales and the impact to international roaming due to COVID-19.
Telstra estimates the total cost of the pandemic for the business will be $ 400m in the current financial year.
The EBITDA base for the second half of the 2021 financial year is expected to be in the range of $ 3.3bn to $ 3.6bn.
Total revenue estimates have been reduced to $ 22.6bn from $ 23.2bn due to lower sales margins on hardware and equipment sales.
