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Our Brilliant Connected Future

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Our Brilliant Connected Future OUR BRILLIANT CONNECTED FUTURE Telstra Annual Report 2015 C WorldReginfo - ac9c3c37-7d2b-4d13-8386-a94a82a68f93 The sections of our Annual Report titled Our Business, The Year at a Glance, Chairman and CEO Message, Strategy and Performance and Full Year Results and Operations Review comprise our operating and financial review and form part of the Directors’ Report. An overview of selected aspects of our corporate governance arrangements is set out in the Governance at Telstra section of this Annual Report. A copy of our full Corporate Governance Statement and ASX Appendix 4G outlining how we comply with the third edition of the ASX Corporate Governance Principles and Recommendations is available on our website at telstra.com/governance Telstra Corporation Limited ABN 33 051 775 556 WorldReginfo - ac9c3c37-7d2b-4d13-8386-a94a82a68f93 CONTENTS Our Business 02 The Year at a Glance 04 Chairman and CEO Message 06 Strategy and Performance 09 Improve Customer Advocacy 10 Drive Value from the Core 12 Build New Growth Businesses 14 Our Material Business Risks 16 Outlook 18 Full Year Results and Operations Review 20 Sustainability 27 Our Approach 28 Customer Experience 29 Connecting Communities 30 Our People 31 Environmental Stewardship 33 Responsible Business 34 Board of Directors 35 Senior Management Team 38 Governance at Telstra 40 Directors’ Report 44 Remuneration Report 48 Financial Report 69 Financial Statements 70 Directors’ Declaration 175 Shareholder Information 177 Reference Tables 179 Glossary 182 Index 186 WorldReginfo - ac9c3c37-7d2b-4d13-8386-a94a82a68f93 OUR BUSINESS OUR PURPOSE To create a brilliant connected future for everyone. To create A brilliant connected future For everyone The brilliant connected future won’t This is our aspiration for every We can only create such a future happen on its own. It has to be created. one of our customers. And in every for everyone when enough people can Telstra can bring together the parts market in which we operate. access technologies that create social, to create it. economic and cultural change. OUR VISION To be a world class technology company that empowers people to connect. OUR STRATEGY Our strategy is focused on driving growth and creating long term shareholder value. It has three key pillars. Our Strategic Priorities Improve Customer Advocacy Drive Value from the Core Build New Growth Businesses We’re dedicated to improving We strive to deliver customer and We continue to look for new customer service and creating revenue growth, network leadership opportunities in new geographies advocates in all our customers. and productivity improvements and in new business sectors. through simplifying our business. OUR VALUES At Telstra, we have five values. Our values express what we stand for and are core to our business. As a values-led organisation, they shape our peoples’ decisions and actions. They guide how we work together. We align everything we do with them. Show Better Trust each other Make the Find you care together to deliver complex simple your courage WHO WE ARE An iconic Australian company with a rich 371 84 137 18,700 history – dating back Retail Business Business and Retail Points to 1901 Stores Centres Enterprise Partners of Presence 36,000 TELSTRA EMPLOYEES ACROSS 20 COUNTRIES WORLDWIDE MORE THAN 2,000 network points of presence across the globe 02 WorldReginfo - ac9c3c37-7d2b-4d13-8386-a94a82a68f93 Our Business_ _Telstra Annual Report 2015 INDUSTRY CONTEXT Technology is changing our world and we are Twenty years ago there were less than 100 million mobile seeing profound change in the way people devices in the world. Today there are more than five billion. connect and communicate. Globally, mobile data grew nearly 70 per cent in 20141. Video now represents more than 50 per cent of all internet traffic. It is a The telecommunications industry is dynamic and growing, time of enormous opportunity. We know that having the best with network traffic increasing rapidly and the continued network is going to matter to the next generation even more than evolution of IP based products and services. it does to this one – and Telstra is going to make sure they get it. WHAT WE DO We help customers connect to the people and We have built Australia’s largest national mobile network, things that matter most to them. with faster speeds in more places. We strive to know and serve our customers better than Telstra is Australia’s leading telecommunications company, anyone else – offering a choice of not just digital connection, offering a full range of communications services. but digital content as well. We believe the more connected people are, the more We actively seek out new growth opportunities and new opportunities they have. technology in Australia and around the world, with our international presence spanning 20 countries, including We aim to build technology and content solutions that a growing footprint in Asia. are simple and easy to use. OUR BUSINESS Retail Consumer Business Media Health Providing a portfolio of Serving Australian small Portfolio of media content eHealth solutions for Fixed voice, Data, Mobile, to medium businesses as and platforms including primary care, aged and Media and value added a trusted advisor, providing subscription TV, streaming residential care, hospitals, products to customers products and bundles including video, music, and leading radiology and pathology, nationally including Post fixed, mobile, data and IP, sport and news content pharmacy, Indigenous and Pre-paid mobile and business software applications across fixed and mobile care and telemedicine. mobile broadband, PSTN, and Networks Applications connectivity. ADSL, HFC, and NBN. and Services (NAS). Global Enterprise and Services Serving our global enterprise and Network Applications and Services, Responsible for the Telstra Software government customers with fully including: managed network services, Group (TSG), focused on intelligent video integrated end-to-end solutions and collaboration, cloud, unified comms, solutions and muru-D®, a start-up products, including: innovation, product security services and a range of accelerator program. development, telephony, mobile and software as a service solutions. data connectivity, IP networks and cloud. Licenses in Asia, Europe and the US. Wholesale Australia’s leading supplier of wholesale telecommunications services across fixed, data and IP, mobiles, facilities access and NBN. Operations Responsible for the planning, design, engineering, construction, operation, maintenance, service installation and restoration of Telstra’s networks and information technology. The group is also responsible for the company’s innovation portfolio, encouraging company-wide innovation and creation of new service opportunities. 1 Source – Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2014 – 2019, White Paper, 2015 www.cisco.com 03 WorldReginfo - ac9c3c37-7d2b-4d13-8386-a94a82a68f93 THE YEAR AT A GLANCE Financial highlights 30.5 + $1b $4.7b CENTS TOTAL SHARE BUY-BACK = DISTRIBUTION TO DIVIDEND PER SHARE SHAREHOLDERS $4.3b $26.6b $1b NET PROFIT AFTER TAX2 TOTAL INCOME3 INVESTED IN WIRELESS NETWORK Driving value from the core 4G 4GX™ 2.2m 16.7m SERVICE NOW REACHING 94% INTO 1,200 CUSTOMERS ON DOMESTIC RETAIL of the Australian population suburbs and towns A BUNDLED PLAN MOBILE CUSTOMERS % 18.4 BETTER-VALUE PLANS 4,000 more data allowances and FOXTEL FROM real time mobile data alerts Wi-Fi hotspots for TELSTRA SUBSCRIBERS Telstra Air® launch Sustainability NAMED AUSTRALIA’S MOST SOCIAL AND COMMUNITY RESPECTED COMPANY4 $214m CONTRIBUTIONS TELSTRA SAFE CONNECTIONS® TELSTRA FOUNDATION™ LAUNCHED TO HELP WOMEN IMPACTED PHILIPPINES LAUNCHED BY DOMESTIC VIOLENCE STAY CONNECTED 2 Profit for the year from continuing operations. For more detail refer to page 20 of the Full Year Results and Operations Review. 3 Total income figures are on a continuing operations basis and exclude finance income. On a guidance basis total income was 6.3b.$2 Please refer to the Full Year Results and Operations Review on page 20 and page 180 for more detail and guidance reconciliation. 4 Announced in November 2014. The Most Respected Companies list is the result of a study conducted by Financial Review Group in partnership with global management consultancy Hay Group. 04 WorldReginfo - ac9c3c37-7d2b-4d13-8386-a94a82a68f93 The Year at a Glance_ _Telstra Annual Report 2015 Customer service % OF CUSTOMER SERVICE TRANSACTIONS ONLINE OVERALL NET 52 PROMOTER SYSTEM +5 (NPS) IMPROVEMENT SERVICE AND INSTALLATION 13k >5m JOBS COMPLETED PER DAY >8m 350k 2.3m UNIQUE VISITORS LIVE CHAT SESSIONS REGULAR USERS to telstra.com each month on average each month of our Telstra 24x7® App Growth and international expansion US 5 29 DATA $697m CENTRES TELKOMTELSTRA OOYALA ACQUISITION OF PACNET + Launched Indonesian increased ownership Joint Venture including the largest privately 109 POINTS NOW 97.3% owned intra-Asia cable network OF PRESENCE MURU-D® % FORMALLY LAUNCHED SINGAPORE 23.2 TELSTRA HEALTH™ launched NAS REVENUE and continued to build capabilities Sustainability 117k PEOPLE 27% REDUCTION IN CARBON ~ reached through our digital literacy programs EMISSIONS INTENSITY 476 PEOPLE >15m SMS SENT with a disability or from a disadvantaged background to customers highlighting responsible phone use employed through our Supported Workforce program 5 Including gross debt. 05 WorldReginfo - ac9c3c37-7d2b-4d13-8386-a94a82a68f93 CHAIRMAN AND CEO MESSAGE Catherine Livingstone AO, Chairman
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