Demand for mobile data rises by a third in 12 months and Telstra reaps the benefits

The nation’s need to be online has helped Telstra overcome the churn of customers who were unhappy with the increased cost of their mobile plans.

Demand for mobile data grew 35 per cent over the past 12 months at Telstra. Picture: Jeremy Piper

Significant demand for mobile data and increased plan prices has helped the nation’s largest telco overcome so-called customer “churn”.

Telstra chief executive Vicki Brady on Thursday confirmed that demand for mobile data was up more than one third over the past 12 months.

“We’ve seen incredible growth in data on our mobile network of around 35 per cent in FY23,” Ms Brady said, while presenting the company’s end-of-year results.

“You can probably imagine where most of it comes through; video drives a lot of demand on the network,” she said.

Income from Telstra’s mobile business was up 8.3 per cent to $10.3bn. Revenue from mobile services grew 7.9 per cent while revenue from mobile hardware grew 12.1 per cent, and postpaid revenue per user grew 5.4 per cent driven by CSP plan price increases.

Chief financial officer Michael Ackland attributed much of that hardware growth to “higher margins from greater pricing discipline and following the insourcing of (Telstra) stores”.

Telstra had 86,000 postpaid plans brought into service over the past 12 months while prepaid services were near triple that at 247,000. Wholesale unique users grew to more than 98,000.

“These results were driven by market growth particularly at lower price points, including the impact of the return of incoming travellers and migration and price dynamics including the impact of price rises announced during the year,” he said.

Prepaid was one of the strongest divisions for Telstra, Mr Ackland said: “This was driven by services in operation (SIO) growth and increased data usage as well as the one-off benefit from product migration we announced in the first half.”

Telstra chief Vicki Brady. Picture: Luis Ascui

Not all customers were accepting of increased plans. Telstra group executive of consumer and small business Brad Whitcomb confirmed that some customers had left the telco altogether.

“(There was) a brief period of churn as a result of those price rises. We do see some customers leaving Telstra full stop but we are capturing a number of those customers either in Belong or in our MVNO base,” he said.

Mr Whitcomb said the telco had noted a clear divide between customers on the higher end and lower end of the mobile market.

“We are seeing a bit of a split where customers on higher-end plans are tending to upgrade at a higher rate and are tending to take the very high-value handsets in the market,” he said.

“And we’re seeing some customers that are on the lower-tier plans are tending to hold on to those handsets a bit longer to balance out their overall telecommunications spend.”

Earlier this year Telstra reported that some of its customers were retaining their handsets for up to 36 months. Others had chosen to shop elsewhere to purchase devices.

Over the past 24 months several manufacturers have shifted their focus to lower-end mobile phones with 5G capabilities – and many manufacturers such as Motorola and Nokia were targeting those users.