Telstra has warned of deteriorating business confidence and shrunk its full-year earnings guidance after being surprised by a steep fall in demand for professional services despite delivering an 11.5 per cent rise in interim net profit.

Demand for professional and managed services had “a very significant drop off” at the end of calendar 2023, Telstra chief executive Vicki Brady said after posting a $1 billion profit. “It was surprising in fact to see how quickly our sales pipeline dropped,” Ms Brady said.