Telstra, Australia's largest phone company, is expected to post a small rise in first-half profits as strong mobile phone and broadband sales are dented by higher costs related to a company overhaul, a Reuters report said.
The Reuters report quoted analysts as saying that Telstra would continue to outperform its global peers on arresting the decline in higher margin fixed-line revenues, helped by being the dominant player in a fast-growing local economy.
'In Australia no one really thinks twice about upgrading handsets, corporate spending is pretty strong and the competitive environment is probably not as tough as some markets in Europe,' said JP Morgan analyst Laurent Horrut.
The former government monopoly is set to report net profit before one-offs rising 3.4% to A$1.76 billion ($1.6 billion) from A$1.704 billion, according to a Reuters survey of seven analysts.
Recent results from main rival Optus, owned by SingTel, suggest Telstra was gaining market share in the more lucrative broadband and mobile phone markets, the report said.
Telstra's figures show its high-speed third-generation mobile penetration, which brings in revenue of A$20 per month per user more than 2G mobiles, has increased rapidly to 38% from 27% over four months, the report added.
Credit Suisse analysts told clients they expect Telstra to beat its own guidance and market forecasts, due to strong growth in mobile and broadband and stabilising declines in fixed-line revenues, the report further said.