Telstra Raises Mobile Prices Amid Growing Network Demand — Update

By Stuart Condie

SYDNEY--Telstra will raise prices for its postpaid and prepaid mobile services during its current fiscal half, saying it needs to keep investing in technology to meet growing demand.

Australia's largest telecommunications provider on Tuesday said that it would raise monthly prices on most mobile plans by between 2 and 4 Australian dollars (US$1.35-US$2.70). The announcement came less than two months after Telstra scrapped inflation-linked annual price rises, citing a need for greater flexibility.

Australia's consumer price index rose by 3.6% over the 12 months through the March quarter. The price rises announced Tuesday would represent a rise of between 3.8% and 7.5% on Telstra's average revenue per user of its postpaid handheld services in its most recent fiscal results.

"Telstra has balanced cost of living pressures it knows some of its customers are experiencing, with its need to continue to invest to manage technology evolution and continued strong customer demand on its mobile network," Telstra said.

Many analysts had expected Telstra to raise prices during its current 2025 fiscal year, pointing to increases at rivals. Singapore Telecommunications-owned Optus lifted some mobile prices in May, while retailer JB Hi-Fi, which sells services on the Telstra network, has also increased its tariffs.

Telstra, which will raise postpaid prices on Aug. 27 and prepaid prices on Oct. 22, said that traffic on its mobile network had increased more than threefold over the last five years and was now growing at an annual rate of about 20%. Telstra lifted mobile income 3.8% to A$5.325 billion in the December half.

In May, the company said it would cut about 2,800 jobs as part of an effort to trim A$350 million in costs.

Telstra has an average overweight rating and A$4.15 target price, according to analyst forecasts compiled by FactSet. The stock last traded at A$3.65.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

July 08, 2024 19:38 ET (23:38 GMT)

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