Competition still a concern for CSL, Reach
Two of Telstra Corp of Australia's investments in Asia, mobile operator Hong Kong CSL and undersea cable carrier Reach, reported contrasting half-year performances yesterday, but both said aggressive price competition remained a concern.
Telstra's wholly owned Hong Kong CSL saw earnings before interest and taxes drop 18.14 per cent to $203 million for the six months to December last year from $248 million a year ago, despite revenue improving 7.96 per cent to $2.17 billion from $2.01 billion.
'Continued aggressive price competition is unfavourably impacting local voice revenue and average revenue per user despite an increase in market share,' Telstra said in a stock exchange announcement yesterday. It did not provide any subscriber statistics.
Meanwhile, Reach saw its net loss narrow to US$8 million, from US$113 million, as Telstra's writing down of the company's carrying value to zero for 2002-03 resulted in lower depreciation costs.
'Prices for international voice and data carriage have been falling and the growth in usage has not been sufficient to compensate for the loss in revenue caused by the price reductions,' Telstra said, adding that no improvement was in sight. Revenue slid 11.33 per cent to US$399 million.