Telstra Aktie

Good morning and welcome to Telstra's results announcement for the half year ending 31st of December 2025. I am Nathan Burley, Head of Investor Relations. I'm joining today from the lands of the [ Gadigal ] people. And on behalf of Telstra, I acknowledge and pay my respects to the traditional custodians of country throughout Australia and recognize the continued connection Australia's First Nations people have to land, waters and cultures. We pay our respects to elders, past and present.

This morning, we will have presentations from our CEO, Vicki Brady and our CFO, Michael Ackland. We will then open to questions from analysts, investors and then the media. I will now hand over to Vicki.

Thank you, Nathan, and good morning, everyone, and thank you for joining us. I'll make some comments reflecting on Telstra's overall performance and our outlook. Michael will then cover the details of our financials.

The first half of FY '26 was a strong period for Telstra. We delivered ongoing growth in earnings, reflecting momentum across our business, strong cost control and disciplined capital management.

We also made a positive start to our Connected Future 30 strategy, which will see us double down on connectivity, drive growth and play a critical role in enabling a prosperous digital future for Australia.

In first half '26, reported financial performance compared to the prior period included EBITDAaL up 4.9% to $4.2 billion, EBIT up 9.2% to $2 billion. Profit for the period or NPAT, up 8.1% to $1.2 billion, earnings per share up 11% to $0.099, and return on invested capital, up 0.8 percentage points to 8.8%.

Our underlying growth more accurately reflects our financial performance compared to the prior period. Underlying financial performance showed underlying EBITDAaL up 5.5% to $4.2 billion, cash EBIT up 14% to $2.5 billion, cash EPS up 20% to $0.14, and underlying return on invested capital up 0.9 percentage points to 8.9%.

On the back of cash earnings growth, the Board resolved to pay an interim dividend of $0.105 per share. The interim dividend is 90.5% franked, with a franked amount of $0.095 per share and an unfranked amount of $0.01 per share. The interim dividend uplift and the level of franking applied is consistent with our capital management framework. And our aim to deliver a sustainable and growing dividend.

Our dividend is supported by strong cash earnings this half and our Connected Future 30 ambition remains to deliver mid-single-digit growth in cash earnings.

Today, we are also announcing an increase in our current on-market share buyback from up to $1 billion to up to $1.25 billion. This increase is supported by strong progress in completing $637 million of the buyback in the half, earnings growth and the strength of our balance sheet.

The on-market share buyback is expected to support earnings and dividend per share growth and along with the increased interim dividend reflects the board and management's confidence in our financial strength and outlook.

Now that we've completed our first half, we are tightening our FY '26 underlying EBITDAaL guidance to between $8.2 billion and $8.4 billion. Our guidance on other measures are unchanged.

Looking now at our results across the business. We grew underlying EBITDAaL across our mobiles, fixed consumer and small business InfraCo Fixed and Amplitel businesses. Importantly, our mobile business has continued to perform well, with EBITDA growth of $93 million.

Mobile's growth was driven by higher ARPU and more customers continuing to choose our network and the value it provides. Mobile services revenue grew by 5.6%. Our fixed C&SB EBITDA grew by $37 million reflecting ARPU growth and disciplined cost management. We introduced our Internet-only plans late in the half, and customers now also have access to our Telstra Smart Modem 4 with next-generation WiFi 7 technology. With these new offerings in place, we are focused on stabilizing customer numbers and driving growth.

Our fixed enterprise EBITDA declined by $9 million as we continue to reset this business, including through portfolio management and reduced costs. We remain committed to this reset with further changes proposed last week to continue removing complexity. Our international EBITDA declined by $2 million, but grew excluding one-offs. Michael will go through this in detail.

Our domestic infrastructure businesses across InfraCo Fixed and Amplitel continue to grow, reflecting strong customer demand. Across the business, we achieved 14% cash EBIT growth. This percentage growth rate is higher than the rate we expect at the full year, largely due to lower BAU CapEx in the first half.

Our full year cash EBIT guidance is equivalent to around 5% and to 10% annual growth. We delivered positive operating leverage of 3.1 percentage points, in line with our Connected Future 30 target. Given the low level of income growth in the period, we achieved operating leverage largely through strong cost discipline and efficiency gains. We reduced underlying operating expenses by $179 million or 2.4%, more than offsetting pressure from rising costs. This requires challenging but necessary decisions to reduce some roles and set us up to deliver on our Connected Future 30 ambitions.

We're also seeing efficiency gains flow from technology leadership as an important enabler of our strategy. This includes modernizing our software practices, relentless simplification strong adoption of AI and an API-first architecture.

For example, we've consolidated our software partners from 400 down to 2 and improved efficiency in our software development by more than 20% and sped up time to market and release cycles by 15% to 20%. And most importantly, we're seeing benefits to customers, which I'll come to shortly.

Turning to our strategy. Our ambition is to be the #1 choice for connectivity in Australia. Achieving that in a changing environment means radically innovating in the core of our business. You can see the layers and enablers of this strategy on this slide, which we covered in our last Investor Day. There is a more detailed scorecard in the appendix that shows our progress, so I won't go through that in detail. But I will make some comments on the importance of connectivity and call out some highlights from the half.

Connectivity is foundational to supporting national productivity resilience and security. As reliance on telco networks grows and service expectations rise, continued investment in digital infrastructure is fundamental to better delivering services to consumers and business. Investment needs to be supported and encouraged and the investment required across the sector will be large in the multibillions of dollars.

To do this well, we need to have a shared national vision for the digital future we want to create for Australia and a national digital infrastructure plan, our sector can align behind with government and regulators. This must include a plan to use spectrum to the greatest possible benefit to consumers and businesses.

To do that, we need certainty of spectrum allocation on fair terms at a fair market price. We also need better regulation designed for, but agnostic to the technology of today. We need forward-looking guardrails that both protect consumers and encourage innovation to deliver better outcomes for them and the nation.

We welcome the Productivity Commission's proposal for a deep dive review of regulation in the telecommunication sector. We want to work with government, regulators and the sector on a shared vision for Australia's digital future, so we can better align policy, regulation and decision-making with the goals we have as a country.

On investing in connectivity, we are driving significant momentum in the build of our Aura network and managing this large complex project with discipline. The network will be vast connecting our capital cities with ultrafast and reliable fiber and the ability to connect regions too. This week, we reached the halfway mark with 7,000 kilometers of fiber in the ground. Our Sydney to Melbourne Coastal via Canberra routes are now live and more routes are expected to be completed in FY '26, including Sydney to Melbourne Central via Canberra and Sydney to Perth.

We are on track to achieve a 1 point uplift in our Network Experience Index, which brings together network availability and speed across our mobile and fixed networks to measure the real experience our customers receive. The uplift is a result of our ongoing program of network optimization and early benefits from our additional investment over 4 years in 5G advanced capability.

It also reflects improvements in resilience. For example, we have invested to strengthen backup power across our network sites, which we're able to withstand more than 95% of the 165,000 planned and unplanned power interruptions we experienced over FY '25. While there's always more to be done, these investments and others contributed to Telstra receiving the 2025 Best in Test Mobile Network award from umlaut for the eighth year in a row, and with our highest score ever.

In June last year, we became one of the first operators in the world to launch satellite messaging. And while it's not a replacement for terrestrial networks, we're seeing it add another layer of resilience when terrestrial networks are disrupted. For example, when fire damage and power disrupted our network during the recent bushfires in Victoria. Particularly around Longwood and Harcourt, we saw a threefold increase in people connecting to satellite messaging, even though many people had evacuated this area.

On supporting customers, we have migrated more than 99.9% of our 7.7 million consumer customers to our new digital stack. We continue to work with around 4,000 of our customers who are the most complex to migrate, and we are managing that thoughtfully. Our team know these customers as individuals as we work through this with each of them, and we're committed to getting it done.

We're seeing significant improvements in customer experience from digitization and AI. 86% Consumer service interactions like billing, order tracking or prepaid recharge are now completed through our digital self-service instead of customers having to call us. In November, we launched an AI-powered assistant, which customers can access on telstra.com to get help with simple things like checking their plan, activating a SIM or how to reset a password. This is our first customer-facing generative AI assistant, and it has meant an almost threefold increase in customers being able to resolve their inquiry using AI. We plan to scale this AI-powered assistant across our -- my Telstra app over this quarter.

It is just one example that we have many more AI use cases across the business helping us serve customers better, strengthen network resilience, protect customers from scans and solve issues before they become problems. Overall, our investment in digitization and AI combined with our ongoing network and capability investment is helping to drive improvements in customer experience. Over the 12 months, we've seen strategic NPS increase by 5 points and episode NPS increased by 2 points.

At the same time, we have been laying the foundations of our Connected Future 30 strategy. And there are three things that I'll call out here. The first is innovating in core connectivity, capability and how we capture value. In mobile, our investment in 5G advanced is moving us towards a smarter, more adaptable and programmable network. In Fixed, we launched our Adaptive Network center in June last year, our self-service platform that empowers our enterprise customers, partners and Telstra teams to design, order, track, manage and monitor connectivity services, all in one place. These capabilities are both fundamental to enabling our network as a product layer and we continue to drive momentum.

The second is our work under our joint venture with Accenture to transform our business with AI. We made good progress we have made good progress since launch, including retiring legacy platforms, strengthening responsible AI governance, streaming data architecture, and opening access to global innovation via our Silicon Valley hub. We recently proposed changes that would see the JV tap into Accenture's existing resources and expertise to deliver on our data and AI road map more quickly. That means some roles would not be required. While decisions like this are never easy, over time, we expect it will deliver benefits to our customers and our business faster.

Third is our investment in upskilling our people. We continue to put AI tools into the hands of our people to help them learn and adapt. And over the half, more than 75% of our team who -- with access to those tools use them weekly or more often. We also continue to offer training through our data and AI Academy. In the first 6 months of FY '26, almost 9,000 of our people completed a course.

Looking ahead, we are focused on continuing to deliver value for our customers, communities and shareholders as we build momentum behind our Connected Future 30 strategy. This includes through our core business cash flows, active portfolio and investment management and disciplined capital management.

Our ambition is to be the #1 choice in connectivity in Australia and to continue delivering on our purpose to build a connected future so that everyone can thrive. I'd like to thank the Telstra team for everything they have delivered in the half in the care they have shown for our customers, particularly responding to the Victorian fires and Queensland floods over the summer.

I'll now hand to Michael to take you through the results in detail.

Thanks, Vicki. And as Vicki said, we've had another strong half with continued growth across all earnings and cash metrics, including our new guidance measures. This is in line with our goal to deliver resilient, predictable and consistent growth under our Connected Future 30 strategy. While total income across the group increased at 0.2% in the half, we've reduced operating expenses by 2.1% with our continued focus on efficiency. EBITDA after lease depreciation or EBITDAaL, was up 4.9% on a reported basis and 5.5% on an underlying basis, with the difference due to a $23 million impairment of the London hosting center.

We have delivered a profit to Telstra shareholders of $1.1 billion, up 9% and earnings per share of $0.99, up 11%. These results reflect growth in key products, especially mobile, ongoing strong cost management and reduced shares on issue from buybacks. Cash earnings were higher than reported earnings as depreciation and amortization is higher than business as usual, or BAU CapEx. We expect this trend to continue and continued growth in D&A.

In addition, cash EPS of $0.14 per share was up 20%, a higher growth rate than reported EPS as BAU CapEx was lower this half. As Vicki said, with stronger cash earnings, the Board increased the interim dividend to $0.105 per share, up 10.5% on a cash basis. This represents 75% of cash EPS.

With our tight franking balance and ongoing gap between cash and accounting earnings, partial franking in this period best supports a growing and sustainable dividend. We've also lifted our current buyback from up to $1 billion to up to $1.25 billion. $637 million was bought back in the first half or 1.1% of shares at an average price of $4.90 bringing us to a total of 2.6% of shares retired in the calendar year 2025.

Now given this is the first half, we are reporting on cash EBIT and cash earnings. Let me provide a little more detail. As a reminder, cash EBIT is a view of earnings after key cost buckets, including BAU CapEx, lease and spectrum amortization. Cash earnings is a further view after interest, tax and noncontrolling interest. Cash EBIT growth of 14% to $2.5 billion follows growth in our core operations, coupled with strong cost management and lower BAU CapEx. BAU CapEx of $1.5 billion was down 5% and largely due to timing. We expect a higher spend on digital infrastructure, including in our international business in the second half.

Despite a lower average borrowing rate, finance cost increased modestly. Tax was higher in line with higher earnings with an effective tax rate of 28.4%. With that, cash earnings grew 17% to $1.6 billion.

Turning to Slide 14 on product profitability. We delivered EBITDA growth across mobile, fixed NSB, InfraCo Fixed, Amplitel and other. Other EBITDA comprises costs not allocated to product. It improved with favorable foreign exchange movements, adjustments due to bond rate changes and the absence of equity losses following the divestment of our [ Foxtel ] stake last year. Health was flat with continued growth in revenue, offset by higher costs supporting new contracts and ongoing transformation. Other EBITDA would generally be around a $70 million loss per half, although this varies based on the nature of the items included.

Turning to our key products, starting with mobile, which continues to demonstrate strong performance. Mobile service revenue grew 5.6%, with growth across all product groups including postpaid, prepaid and wholesale handheld, mobile broadband and IoT. We delivered sustained average revenue per user or ARPU growth across all categories, brands and segments with disciplined commercial execution. Postpaid handheld ARPU grew 4.8%, Prepaid handheld ARPU grew 14.7%, although significantly lower on a unique user basis. And growth is due to the flow-through of October 2024 price changes. And wholesale ARPU grew 7%.

We achieved this ARPU growth while also growing postpaid, prepaid and wholesale customers. Our handheld mobile user base grew by 135,000 in the half. Mobile EBITDA grew 4% to $2.7 billion, with service revenue growth partly offset by higher costs, including higher-than-usual customer remediation and compensation sales costs, largely related to satellite, increased redundancy and a higher allocation of shared cost as mobile becomes a bigger part of our business.

We expect sequential mobile service revenue growth to be muted given the timing of past price changes and lower IoT revenue following the divestment of MTData.

Turning to fixed consumer and small business, where we continue to grow earnings by focusing on a portfolio of products and technologies and strong cost management. In the half, we grew NBN unit margin through price rises and plan mix, which offset sir losses and we continue to grow our 5G fixed wireless product. We continue to invest in our offering in the half. We launched our Internet-only plans and introduced the Telstra Smart Modem 4. However, [indiscernible] losses remain a challenge and a focus for our channel and marketing teams.

In fixed enterprise, we have continued efforts to reset the business and focus on connectivity and strategic growth areas. Starting with Data and Connectivity, or DAC, where income fell 9%. During the half, progress on product refresh and upselling to higher bandwidth was not enough to offset the impact of service rationalization and in-period customer credits. We delivered cost and CapEx reductions. However, DAC EBITDA declined to $25 million as cost reduction was insufficient to offset the revenue decline.

Turning to Network Applications and Services or NAS. Revenue declined 4% following deliberate decisions to focus on areas aligned to our strategy. and declines in calling products, with strong cost management, EBITDA increased to $62 million in the half. Our focus on portfolio management is ongoing. The sale of Alliance Automation and MTData are completed and the sale of 75% of Versant Group announced last August is expected to close this half. These businesses contributed $235 million in revenue in the first half of FY '26.

Turning now to international on Slide 18. While reported EBITDA fell 0.5%, we achieved modest growth, excluding significant one-offs. Starting with wholesale and enterprise while reported EBITDA of $232 million grew 20%. This included $45 million of one-off benefits, including deferred revenue recognition, other balance sheet releases and an equity accounted associate gain. Excluding these and one-offs in the prior period as well as FX impacts, EBITDA grew around 1%. This growth was delivered through strong cost management, following a strategic refocus of the business on DAC. This more than offset DAC margin pressure from higher off-net mix, ongoing declines in legacy voice, a business we expect to complete the sale of this month.

Looking forward, wholesale and enterprise EBITDA is expected to decrease significantly in the second half sequentially with the one-off items not expected to repeat, declines in NAS and voice and partially offset by ongoing cost discipline. Over the past few years, we're focused on maximizing utilization in our subsea cable assets.

We have been disciplined in our investments in new capacity. However, this has limited opportunities for new sales and growth. We now see promising investment opportunities in the second half of FY '26 within our BAU CapEx guidance.

Digital Pacific reported EBITDA declined 22% to $139 million as the prior year benefited from the release of the remaining earn-out provisions.

Excluding this and in constant currency, EBITDA grew 1.7% with ongoing cost reduction offsetting a challenging operating environment.

Turning to Infrastructure on Slide 19. InfraCo Fixed income was broadly flat at $1.4 billion, with growth from NBN CPI indexation and ground stations. This was offset by lower commercial and recoverable works reported legacy asset sales and internal revenue based on efficiency -- total revenue based on efficiencies and lower power charges.

InfraCo Fixed EBITDA grew 3.4% to $905 million, including a higher contribution from NBN, copper recovery, commercial works and cost efficiency, partially offset by the reduced internal income.

[ Amplitel ] continued to benefit from strong demand for towers and cost efficiencies. EBITDAaL grew 6.6% to $162 million despite the market impacts.

Regarding strategic investments, including the Aura network, which is our new name for our [indiscernible] City Fiber. We continue to expect spend of $1.6 billion above BAU CapEx across the project. Now while we expect the vast majority of this spend to occur by the end of FY '27, we now expect a small amount of spend and some routes to complete in FY '28. We continue to be disciplined in the build of this 30-year asset, including prioritizing routes in line with customer demand and returns. We expect a mid-teens IRR with strong revenue growth, especially from FY '28, in line with demand as routes come online.

Strong cost management is a key highlight of this result. Our proactive cost management and the benefits from technology adoption is helping us be more efficient, respond to structural challenges in some products as well as the impact of inflation and allow for reinvestment. And Lower sales costs were a function of lower fixed [ NSB ], international and [ ASCOs ]. Fixed costs were $76 million lower. Together with lower BAU CapEx and Cash EBIT costs reduced, delivering strong operating leverage of over 3 percentage points.

We've maintained our strong capital position with liquidity supported by strong operating cash flows. Net debt remained stable at 1.9x despite our buybacks as higher debt was offset by EBITDA growth. We've also reduced our average cost of debt to 4.8% and extended our maturity profile. Our balance sheet is strong, and we remain committed to an A band credit rating. This has enabled us to lift our current buyback. We've also improved our return on invested capital.

Turning to FY '26 guidance on Slide 22. Today, we are tightening our underlying EBITDAaL guidance to between $8.2 billion and $8.4 billion, with the midpoint unchanged. Our guidance on all other measures is reconfirmed.

In terms of EBITDAaL, there were a number of one-offs that have benefited the first half, including in international and other EBITDA. The second half will also reflect the loss of earnings from businesses we have divested. Offsetting these items in the second half, we expect ongoing productivity, including carry-in from prior years as well as InfraCo asset sales and net product growth. As previously noted, we also expect higher BAU CapEx in the second half.

These results demonstrate our value creation under our Connected Future 30 strategy. growth in core business cash flow, 17% growth in cash earnings supported by strong operating leverage. Portfolio investment -- portfolio and investment management where we continue to execute in line with our strategy to enhance returns and disciplined capital management, including the lift in dividend and buyback.

Finally, I would also like to thank the Telstra team for all of their ongoing efforts in delivering value, especially for our customers, the communities in which we operate and our shareholders. And I'll now hand to Nathan for Q&A. Thank you.

Thank you, Michael. We're now open for questions from analysts and media on the call today, in addition to Vicki and Michael, we have other members of the Telstra Group Executive, including Brad Whitcomb, Group Executive Consumer; [ Stephen Worrell ], CEO, InfraCo Oliver Camplin-Warner, Group Executive Enterprise; Amanda Hutton, Group Executive Business; and Kim Krogh Andersen, Group Executive Product and Technology.

With that, I'll open to the first question, which comes from Eric Choi from Barrenjoey.

Thanks, Nathan. And congrats everyone on the result and lifting the dividend. I've got three questions, but can I please start my first question specifically on the dividend. And I just wanted to check the Board logic for potential FY '26 and '27 outcomes.

So if you look at FY '26, your first half cash payout was 75%, that your policy has been sort of 70% to 90% in the past. And just lodging out the second half. You can work out cash EPS will fall a little bit in the second half versus first half. So I guess, we just wanted to check you're happy to up that cash payout above that 75% to maintain $0.105 into the second half?

And then just beyond FY '26, you're clearly focused on cash earnings now. So if we think you guys can grow cash earnings by 5% or more, there's no reason why that DPS can't grow 5% or $0.01 again beyond FY '26. That's the first one. Do you want the rest or should give you a chance to respond?

Why don't we -- Eric, we might do it a little differently, given there's quite a bit in that first one, why don't we take it first off? I'll make a couple of comments, and then I know Michael will want to jump in as well.

So first off, this is obviously the first half where we've spoken a lot about in terms of dividend that under our capital management framework our focus is sustainable at growing dividend. Our preference is fully franked. But where that's not possible, we would consider unfranked. And so look, as the Board considers the dividend, the capital management framework is obviously the critical thing that they referenced.

As we spoke to this morning, the first half of this financial year, we've seen particularly strong cash earnings, and that supports the first half dividend. But yes, that sustainable and growing dividend is absolutely a key focus. We don't have any more a cash payout ratio that we're targeting. It's very much -- we focus on the capital management framework and look at it through that lens. But Michael may want to comment on some of the historic numbers, I'm not sure.

But Look, as we look forward, that's why we keep coming back, Eric. Our ambition under Connected Future 30 is really that mid-single-digit cash earnings. That's really critical and that's an important reference point. As you know, we work through and the Board makes its final decision on the dividend. But Michael, do you want to jump in with any further?

Yes. I mean I think Vicki is absolutely right. We don't have a policy on payout ratio. But if you look over the last few years, I think in FY '25, the cash on the same basis, the cash EPS payout ratio was 85%. It was 90% in FY '24, and it was FY '23. But as we're focused on that sustainable dividend and just recommit to our objective to deliver mid-single-digit growth in cash earnings, Eric?

Awesome. I'll try to be quick on met. But just number two, just in terms of balance sheet headroom for capital management, and I'm going to focus on [indiscernible] S&P, it looks like they've lifted your MAX gearing headroom to 2.4x now. So can I confirm on their measure you'd be tracking at 2.1 to 2.2, and that's before you conducted portfolio optimization. So basically, the question is, do you have plenty of headroom to increase both dividends and buybacks from the credit agency....

Excellent. Well, that's quite a detailed one. The my overarching comment is our balance sheet is strong. It's a core part of our capital management framework. You know that we're absolutely committed to those settings that are keep us in that A band credit rating. But Michael, do you want to get into any of the specifics there?

Yes. So we reported 1.9x. I think that's well within our conservatively framed outlook of 1.75 to 2.25. Moody's have a slightly higher top end to that range. They do use some slightly different methodologies, as you point out. We track both of them. But I think your conclusion is that the balance sheet is strong and that we do have strong capacity within that A band rating based on both [indiscernible] S&P is correct.

Just -- sorry, can I fit in the last one, sorry. Just a question on whether investors should think of Telstra as an AI loser or a winner. And I think you're implying you're an AI winner because to get to your long-term ROIC of 10%, you basically need to grow EBITDA, $1 billion or more from here. And like logically, you can see your mobile service revenue is $8 billion to $9 billion, your fixed cost base is $7 billion. If those two kind of grow in line with each other, they kind of offset each other. So you kind of need something else to fill that $1 billion-plus gap, and that's going to have to be through InfraCo cost efficiencies. And I also guessing that's going to have to be driven by AI. So you're essentially help saying AI helps you hit your long-term guidance.

Okay. Well, why don't I start off on that, Eric. There's quite a lot in that one. The first thing I'd say is Obviously, inside Telstra, there's a number of businesses, obviously, mobile key driver of value and growth right now. And we're super happy with our business. That's come through years and years of consistent investment and differentiation in what we deliver to customers, and that will obviously remain a focus.

If you look at our portfolio, I'll come to InfraCo in a second. But there are other elements of our portfolio. We're still working through Telstra Enterprise. We spoke a little bit about the international component of our business today as well. So there's still work to do in our portfolio in terms of getting those businesses in the right shape and supporting our ambitions.

On InfraCo, I mean there is no doubt the demand cycle we're in at the moment, the sort of investment that is going into AI infrastructure. We couldn't be more pleased that we embarked on Aura or intercity fiber as it was previously known quite a few years ago now and that build-out at the halfway mark, all of the demand signals would indicate growing demand there. So the infrastructure side of our business is obviously important long run.

We have also set in our ambitions positive operating leverage. And so yes, we've got to keep getting more efficient. And you see that, I think, Michael and I both commented today, we are seeing benefits from, again, years of investment in digitization, in pushing ourselves to be sort of at the front of how we apply AI inside our business. So they are important. The dynamics in the world is changing fast for us to be competitive for us to keep delivering on rising expectations, rightly of consumers and businesses we've got to be able to apply AI.

And so I'm really optimistic on what AI can deliver for us, both in terms of the demand signals in InfraCo, but also in how we use that inside our business, yes, to drive efficiency, but also drive better customer outcomes. So they'd be the big things I'd comment on in there. I don't know, Michael, if we want -- I might go because we've got Steven [ Worrell ]. Obviously, it's his first set of results with Telstra leading InfraCo. So I thought it might be a good chance because that winners and losers in AI, particularly from our infrastructure business. I thought, Stephen, if you're happy to make a few comments would be great.

Very happy to do that. Thank you, Vicki and good morning, everyone. It's great to be here. As Vicki said, my first results announcement with Telstra. And if you'll indulge me for a moment, I thought I might provide a little context that goes to the heart of the question, Eric, that you've posed. But also I think gives some direction in terms of where we're headed.

I think I'll just start with saying how excited I am to be here at Telstra at this time. It's an incredibly exciting time for our business, but it's also an exciting time in relation to digital infrastructure. We don't have to look too far pretty much every other day, there's an announcement of a new investment that's being made in data centers here in Australia. And Australia has emerged as one of the leading destinations for data center investment around the world as we've all seen.

Now of course, that's just one part of the digital infrastructure landscape. And as recently as last month at [ PTC ], which is a conference in Hawaii, where we engage with hyperscalers, of course, other players in the AI ecosystem, some of our existing clients. and many others who are eyeing the opportunities that this build-out of digital infrastructure is providing. We saw a very significant uptick in terms of our pipeline coming out of those discussions.

As Vicki mentioned, that's why we think Aura is such an important investment. It will provide the AI inferencing architecture that we think is so essential for our nation as we look to an increasingly digital future.

And while I'm excited about all of that and excited to be here, it's also a really important time for us as a nation. And I think Vicki also pointed to this earlier in her comments. Indeed, she made these comments at the Press Club last year in terms of the moment that we find ourselves confronted by. And that is in relation to how do we think about productivity going forward, how do we think about how we best participate in an increasingly digital world. and we think investments in Aura and the assets that we have give us the permission. And I think the logical role for us to play to help Australia best position itself.

Last quick thought. That's a long answer to your question. Of course, our international asset base is incredibly important as well. And Michael touched on this in his remarks. Telstra [indiscernible] operates more than 25% of the world's subsea capacity. And when you think about digital future. You think about connecting Australia to the global digital supply chain. It's that subsea network combined with the domestic and terrestrial assets that we have that we think sets us apart, and we think puts us in an incredibly important position. With all of the work ahead of us to ensure that we can capitalize on those commercial opportunities as, of course, we serve the country.

We'll go to our next question, which is from now Entcho Raykovski from Evans Partners.

Thanks, Nathan. Good morning, everyone. So my first question is around mobile costs in the period and they were a bit higher than the market expected. And Michael, you've provided us with some good color around what's driven that. My question is, to what extent were the higher cost driven by higher satellite costs as opposed to some nonrecurring items like remediation. I'm just trying to get a sense of the extent to which the cost increase is occurring. And I've got a couple of others, but I might hold off after this answer.

Yes. Thanks, Entcho for that. I know Michael spoke to sort of four major things that are in that cost increase. We don't break it down. We don't get into sort of cutting and dicing it into the pieces. But as you said, the first one mentioned was customer remediation and compensation. We are at the end of a program of work on historical sales practices. So that comes to an end at the end of this financial year. We have in part of business as usual, those costs exist, but they are higher in this half, and we would expect higher for this full year. But we don't break it down into the subcomponents. So I don't know, Michael, if there's any other comments you wanted to add?

No. I mean I think, Entcho, the satellite costs, we should consider those to be an ongoing change. And I think you rightly point out the others, we don't expect to be ongoing in this nature. The other one we referenced there is just the share -- the way that shared costs are allocated. And frankly, that's just a little bit that mobile is increasingly a bigger part of our business, as you can see in our numbers. And so that trend will continue as well. But frankly, it's against overall costs going down. So I think we should remain reasonably confident about ongoing operating leverage in that business, as we've committed to across our entire business as we move forward and look at this as -- there has been some more specific impacts this period.

Okay. That's helpful. And my second question is around the potential expected increase in spectrum renewal cost that was announced by ACMA in December. Does that impact your role targets to FY '30 in any way? I mean I noticed that on Slide 35, you've got a footnote referencing the new payment structure. I guess, does it have an impact on ROI and do you foresee a need to perhaps divert investment from elsewhere into spectrum purchases? Or how does that impact your decisions around pricing and the need to pass this cost on to consumers?

Yes. Thanks, Entcho. Obviously, it's an ongoing process at the moment, that process of spectrum renewals. I think on the positive, I mean, on the positive front starting there, ACMA has decided it is a renewal process. I mean, again, reinforcing this spectrum that will come up for renewal through 2028 to 2032, is about 80% of the spectrum that the mobile networks in the country rely on. So that's a positive.

And the process in terms of determining what is fair market price, that is the debate that's underway through that process. ACMA obviously put out some more information just pre-Christmas. We have a different view on what fair market price is -- for us, it's about -- at the moment, it would be, we believe, about $1.3 billion more than what we would see fair market price. So look, that will be part of our submission back. Obviously, that process is still ongoing. We'll put our views, our thoughts, our analysis work we've done into that.

Obviously, any additional cost that comes into the business, we've got to be incredibly thoughtful about as extra cost pressure comes there's constantly a balance of how much we invest into the network and the products and services we're delivering for customers. That might be things like satellite to mobile technology it's investment in our mobile network we keep making and our broader network.

So that will be something we'll have to think about. Obviously, increasing costs. We've then got to think about -- what does that look like in terms of what it means for pricing for customers because ultimately, for us to keep investing and being at the forefront to deliver high-quality connectivity services. We absolutely need to make a return on those investments so we can keep that investment going.

So look, it's part of the process. Our ambition on ROIC remains the same, that ambition under Connected Future 30 to get underlying ROIC to 10%. You did pick up that note. We wondered how quickly that footnote would get picked up. And as you can see, we've just been very transparent using the current pricing that they've put out as the interim pricing that's reflected in that footnote.

Our next question is from Bob Chen from JPMorgan.

A few questions for me. Maybe firstly just on the really strong ARPU result across the mobile business especially across the prepaid and wholesale. Like how sustainable do you think this is? And is this just the beginning of moving those customers onto higher prices?

Thanks, Bob. Did you have more than one question? Can I just check?

Yes, sure. Yes, I've got some others. So do you want me to...

Why don't we grab them all and then I'll make sure we manage to get to them all.

Yes, sure. Maybe just on the comments earlier around the or network. I mean obviously, we're seeing a lot of demand from your data centers being put into the region, like you guys mentioned, when you think about that sort of mid-teens IRR you're talking to, I mean, given the increased level of demand for data centers and connectivity, could that -- could the return profile of or be better than what you were initially expecting?

Okay. And is there a third one?

Yes. And then just on the ACMA spectrum renewal process. I think you expected some of the trade-offs you're sort of thinking about in terms of mobile network investment. But how does it impact maybe your capital management settings, if you don't see the gap between ACMA's pricing close with your views?

Great. Okay. So quite a few to cover off there. Why don't we -- just on Aura, my comment there would be -- we continue to have the same outlook in terms of or in terms of that financial profile. So that mid-teens IRR is absolutely what we continue to target. Of course, as you heard Stephen talk about earlier, we do see good demand signals. But obviously, we've only just passed the halfway mark of build. So our focus is absolutely completing the build and for the -- as the routes come online, making sure we're converting those demand signals into commitments and switching on revenue on the network. So right now, that financial profile stays as is. And I think we've put a slide in the appendix just as a reminder of what that looks like.

Just on the ACMA, look, as I said, that process is ongoing. If it does land with the pricing that's currently proposed, I think this is where you see the benefit of very disciplined capital management, a strong balance sheet. Obviously, as I said, we'll need to consider various trade-offs, but I think given the hard work over many, many years, obviously, the business is in that underlying earnings growth, we're seeing cash earnings growth. And spectrum is ultimately -- it's a critical element to delivering high-quality mobile services.

So I think as we stand today, we sit with the capacity, I think, to be able to navigate that period, and we just wanted to be really clear in that footnote and give you a view of how that might look like if the current pricing was to proceed as is in the interim proposal.

On ARPU, I think it might be worth getting a few comments on this one. I might get Michael just to make an overall comment because he can cover off the broader perspective, including wholesale. And then I might ask Brad to comment because you particularly mentioned prepaid and we've got good strong performance out of the consumer side of the business. So Michael, why don't I go to you on ARPU more broadly?

Yes, sure. Sorry, just a quick one on the -- your point around capital management and spectrum. I think it's a really good question. The way that I would think about it is we start with what's our return on how do we drive -- what's our return on invested capital. Are we getting an appropriate return on invested capital, and that's where all those trade-offs that Vicki talked about. And then the second one is capital management, which is our strong balance sheet. So I think just reiterating what Vicki said, but I wanted to Look, I think on mobiles overall, and I think hearing from Brad is going to be much more insightful than anything I could offer obviously.

But we're really happy with the way that our multi-brand strategy is playing out. We have a broad range of brands and offers and channels to market that are meeting more of the market, and we continue to grow that base. You can see that when you look at the revenue growth, the way that is spread and also the ARPU growth that we're seeing when you take all of our handheld customers in total. So we're really happy with the way that multi-brand strategy is playing out. Prepaid has been very specific highlight that you called out. And so maybe with that, we can get Brad to talk a little bit about how that's working and what's happening.

Yes. Thanks, Michael. Just to broaden it out a little bit. Yes, we're really happy with the performance for the first half. When we look at the mass market mobile. And as Michael pointed out, we do have a series of brands that we work with, boost, belong, main brand, and also our products on prepaid and post, and we work to tie those up so that we've got offers that are attractive to our customer segments.

I'm really pleased that we're able to see growth in terms of subscribers across all of those various aspects of the portfolio. And as you pointed out, also ARPU growth as well. The mechanics of that ARPU growth for prepaid, it was around price rise back in October of 2024, and for postpaid, including belong July 2025, price rises there.

But what we look to in terms of sustainability, I would look first at how happy are our customers. And really pleased that we're sitting, as Vicki mentioned, we're at an all-time high for our customer NPS at plus 47%. That's up significantly PCP. So that's a great trend for us.

I'd also look at our overall value proposition and what we're offering our customers, it's first and foremost, it is built upon having the broadest, deepest, most reliable network in the country and arguably in the world, world-class privacy spend protection and security for our customers. and then the intangibles around our brand, we see our brand moving from strength to strength. We're now the ninth strongest brand in the nation, which is consistent with one of our Connected Future 30 aspirations to stay in that top 10.

We've got brilliant frontline workers that are serving our customers, whether that's through our retail stores or in our contact centers. And you feel that when you engage with them that they're they like the work that they do. In fact, we've got across the consumer division, which is mostly frontline workers. We've got an employee engagement score of plus 85%. And when your employees are engaged, they just provide that much better service to the customer.

So hard to predict the future. It is a very, very competitive market, and we have to earn the right to serve our customers every day. But when I think about the sustainability of the value proposition that we have, like where we're standing right now.

We'll take our next question, which is from Lucy Huang from UBS.

I've got three questions. I just asked them [indiscernible] first. So just, I mean, good results on mobile ARPU. I just wanted to colonic some trends in churn in postpaid post the price rise that was implemented in July. And on the enterprise side in mobile [indiscernible], was that still a drag in the numbers this half? Or do we think that, that drug actually moderated moving forward?

And then secondly, just on intracity fiber. Again, I think you mentioned on the call that we expecting strong growth coming through in FY '28. What's the conversation like with customers on whether or not they want to pre-commit to capacity just to give, I guess, investors a bit more confident around the demand by longer term.

And then just thirdly on [indiscernible], early days since unbundling of the modem from the plant, but maybe if you could provide us with some color as to whether that's been driving a better outcome so far in scanning side decline?

Excellent. Well, thanks, Lucy, for those. I'm going to get -- I'm actually going to get Brad to come back up. and talk a little bit about postpaid churn and also cover off CNS fixed the Internet-only plans. And then I'll ask Oliver who's leading Telstra Enterprise. I know you had a question there on the mobile front. There's been some really great work out of Oliver and the team in Enterprise. So I'll get him to talk a little bit about where that's at and the trends we're seeing. And then Stephen, it might be worth you popping back up and just the discussions. As we've said previously, I think lease, with big builds like this, we find there's lots of good demand signals often until you're at RFS of certain routes. It's sometimes not the practice to pre-commit.

We obviously had Microsoft where we had a big strategic partnership there. They are an important foundation customer of intercity fiber or Aura now. But I might get Stephen can give a bit more color to how the dynamics are. So why don't we go to Brad, if you're comfortable to cover off those couple.

Yes. So if I start with the mobile churn, as you can imagine, before we make any price changes. We do quite a bit of work around elasticity, conjoint analysis, the customers that we're serving and where they might go, should they choose to move off the current plan that they're on. And as a reminder, we have no lock-in contracts. We don't have handset subsidies, and so customers can move very, very quickly if they want.

That's all the modeling that we do. And we look at that in terms of a yield, how many customers are going to stay where they were, how many people will down plan, will we have any customers churning. And I would say that this price change that we made in July we landed right about where we expected in terms of yield. So we are pleased with that.

Of course, that all then comes down to the trading on the floor and how we perform in terms of our peak trading windows, whether that's a flagship handset launches or Black Friday, Christmas and currently our end of summer sale, and I think the team is executing quite well.

So we never satisfied with churn. We want to keep customers within the portfolio, but we're right on track with what we had planned for.

In terms of fixed NSB, one thing I would like to underscore is the team has doubled the profitability of that business over the last 3 years. It's been a massive performance, and we're on track right now to deliver about $0.5 billion in profit when we exclude the legacy copper cost that's in that business. So very pleased about that.

As you mentioned, we've rolled out a number of new capabilities within that product suite, including the NBN high-speed tiers. We've got straight through digital processing to make it really easy for our customers to order digitally. We've got a beautiful new smart modem 4 which if you don't have it, you should get it, the WiFi performance in the house is exceptional. And then we've got now our Internet only.

It is early days. We launched Internet only right on Black Friday. And I will point out, as we've been migrating office and now on to console. We want to get about, what, a little less than 4,000 customers left on console. It meant we could move very quickly and we could meet that critical trading window of Black Friday.

Customer response has been good. That said, we remain in a very, very competitive market. We are focused on [ SIOs ], but we're not focused on [ SIOs ] at any cost. So that's how I would describe it. Now team very much focused though on the [ silo loss ].

That's excellent. And why don't we -- [indiscernible], are you comfortable to speak a little bit to TE and T-Mobile ARPU trends.

Yes. Thanks, Vicki. Thanks, Lucy, for the question. So yes, let me zoom out and start a little bit on the enterprise reset and how we're traveling there, and then I'll zoom in on mobiles. On enterprise reset, as Vicki reminds me, there's always more work to do, but I'm really pleased with the progress that we've made so far. Without doubt, by the end of reset, we will be a stronger, more customer-focused business, no question. We identified a number of critical initiatives at the start of reset, and those are progressing well. I'm pleased with where they are at. And pleasingly, most importantly for me, customer reaction has been positive as well, where we've seen an increase in NPS. .

Some of the key points to reset. First off, just that radical simplification of our product portfolio. It was absolutely critical that we're really focused on who we wanted to be moving forward, not trying to be everything to everyone. We've taken a long hard look at our cost base and facing some really tough decisions here, but we've made those calls and we do have a very different cost base across the business now.

Commercial guardrails, we've continued to tighten, which have had a good impact. We have an engaged workforce, like Brad spoke about earlier as well, who are now making a real difference. And then on the portfolio management as well, we've taken a long hard look at the various businesses that we've had.

As Michael touched on, we completed the divestments of empty data [ SAP ] and Alliance in the half, the partnership with [ Verst ] partnership, that's continuing on track, and we'll close out in the second half. So long story short, there's a lot in there.

A couple of weeks ago, we also announced the radical transformation of our service delivery business. where we'll look to prove the customer experience on the delivery front. So there's a lot there. I'm pleased with where things are at, but there's always more to do.

Just on mobile. So mobile without doubt has been the beneficiary of many of those actions that we have taken through reset. Commercial guardrails really celebrating the network that Brad spoke about earlier all those beautiful attributes. And pleasingly, we saw growth in the half, which I'm really thrilled with. It was great to launch satellite to our customers and especially those organizations who have a remote field workforce where having that connectivity in the air of need is absolutely critical. So for a good response there. You will note in the footnote just around the empty data divestment and how that will impact mobile in second half, but pleased with the mobile performance. But as always more work to do.

Yes. Thanks, Oli, for that. And just to add 1 comment to what Oli said on T-Mobile performance. Lucy, if you go to the very last -- I think it's a very last page in the presentation material in the appendix there, you can see Telstra Enterprise mobile performance, and you can see growth there. And so real credit to Oli and the team. He spoke about commercial guardrails. The team have been very disciplined, and we have seen think Michael mentioned ARPU growth across all products in all segments. So that's been a good outcome of that real focus and discipline.

Including business .

Including business, that's right. Every segment across mobile, which has been great to see. So why don't we come to Stephen? A little bit of color, Stephen, around those commitments from customers? Are they prepared to precommit.

Happy to. Thank you, Vicki. And Lucy, thanks for the question. There sort of two thoughts that might be helpful here. As Vicki mentioned, first and foremost, we need to build the network. So we're 7,000 kilometers into a 14,000-kilometer total build, and we have a couple of the routes ready for service and actually in use today, but most yet to get to that threshold. And so that obviously is the priority as we continue to have all sorts of conversations with players, both domestic and international.

The second thought I'd love to share with you is the thought that we are building, what I'll describe as AI infantry architecture for our nation and of course, connecting that architecture to what is increasingly being built out around our region and around the world. And in that context, what Aura presents to Australia, obviously, critical digital infrastructure for the nation, but it's infrastructure that will support us for a generation. And we're talking about a demand profile that we don't actually see just yet, with all of the investments that we're hearing regularly in relation to data centers.

Many of those are in the construction process and have yet to come online. And the sort of demand profile that those data centers will drive as one part of the digital supply chain is yet to arrive. And as you might expect, as a result, the commercial conversations with those operators in terms of precommits and their precise requirements in terms of connectivity, both domestically and through the region are conversations that we engage in regain. We're obviously moving many of them down the pipe very well, and we expect to have more to say on the topic in the future. Thanks very much.

Thank you. We'll take our next question from Liam Robertson from Jarden.

Three questions from me as well. Just firstly, on mobile, in particular, postpaid subs growth, looks like belong with the standout there, adding 21,000 in the half core base decline modestly. Michael, I think you touched on your multibrand portfolio already. Clearly, that remains well positioned. But I'm just interested in how you're seeing the market? And should we be thinking of belongers the key acquisition channel going forward? Or do you actually think you can also grow your core brand? And then just a follow-on from that. I mean, given that dynamic, have you got any concerns around your ability to grow postpaid ARPU moving forward? .

And then just my next question on the dividend. I might frame it slightly differently, just given you are clear on not having a targeted payout ratio. I don't think it was a coincidence that the $0.05 fully franked and then the 1 unfranked on a gross stock basis was similar to the $0.10 fully franked in expectations.

I guess, moving forward, should we now be thinking about growth of that dividend on a gross basis? And then you'll split between the Frank component and unfrank component will just be dictated by your available franking credits. I guess the inference there is that the unfranked component might actually need to accelerate just given your franking balance and the mismatch between tax paid and then cash earnings?

And then my last question, hopefully, just a really quick one on enterprise. Appreciate all the comments and color Oli, there around recent estimates, the cost base reset, some of the pockets of growth looks like mobile was strong. I guess my question is when can we consider that portfolio to be fully rebased?

Well, thanks, Liam, lots in there, some great questions. I might get Brad back in just a second because I think how the market is playing out, belong. My overall comment, as Michael spoke to earlier, our multi-brand approach is critical to how we address the market. There are very different needs in the market in terms of what different segments of customers are looking for. And so it remains a really important piece.

And of course, as you'd expect, we're always pushing. We want to make sure we're meeting those needs as best we can. And the Telstra branded proposition is critically important. It is our premium offer to market I might get Michael to jump in after Brad and just talk a little bit more about dividend. As you call out, this is the first time in a long time. It's not a fully franked dividend. So I'm sure there are many questions about how to think about it.

Again, I just come to cash earnings is an important piece as we consider as the Board goes through that process as they're thinking about the dividend in light of our capital management framework.

TE, it's a really great question on Reset. Oli and myself and the leadership team, we've been working through that at the moment. I mean, incredible progress, it was May 24, when we announced the reset of our enterprise business, as you just heard from Oli, some really pleasing progress. But there is still more to be done. And so that's part of our thinking as we come back for our full year results, we'll be able to share where we're at. But right now, the focus really is on making sure those pieces that are in work still now, and Oli spoke to some of those -- some of the changes we're driving to try and remove further complexity out of that business to really deliver on those rightly high expectations of our enterprise customers remains absolutely our focus along with finalizing some of those elements on the portfolio management side. But why don't I -- Brad, are you comfortable to jump in on the market, and then we'll come back to Michael on dividend.

Yes. So thanks for the call out on Belong. We're super proud of the performance of that business. And it's great to see them growing, both in terms of subscribers and also profitability. I think the team there is doing a fantastic job.

I will point out, we did have a fairly significant price rise within Belong back in July at the same time that we did the main brand price increases as well. So this isn't necessarily a pricing thing. We do see more growth at the lower end of the market. So from my perspective, it's not surprising that we would see long competing very well there and seeing that grow. But our primary focus is around our core main brand. and the other brands sit around that to support that main brand. And there's a number of attributes that you can only get with the Telstra main brand.

And one that I would point out, we've talked a little bit about today is the satellite messaging service. And for customers that are aware that we have satellite messaging, we see an NPS, which is a full 16 points higher than customers that aren't aware of it. So we're offering real value there, and our aspiration is to continue to grow that business both in terms of the profitability, but also the number of customers that we can serve.

Thanks, Brad. Why don't I just -- and thanks, Liam, for the question on dividends. I think I would a little bit like Vicki sort of spoke to. We have an ambition under Connected Future 30 to grow our cash earnings mid-single digit. It is those cash earnings that support the sustainable and growing dividend. And the level of franking within that is going to be determined by the growth in our Australian tax payments, which I apologize as an obvious statement, but it is going to be driven to the growth in our Australian tax payments, and that's going to be fairly closely linked to our growth in accounting earnings and EPS.

So we are -- as we said, we think that we do it -- our franking balance is tight, has been tight for some years. the partial franking in this period, we believe, was the best way to deliver on our commitment to a sustainable and growing dividend, and we look forward to continuing to achieve our ambition of mid-single-digit cash earnings growth that supports a sustainable and growing dividend in the future.

We'll go to Roger Samuel from Jefferies.

Might just stick to three questions as well, hopefully, quick ones. Firstly, just on your guidance. If we look at your performance in the first half, the underlying EBITDAaL grew by 5%. And if we assume that you can repeat that 5% performance in the second half. That implies that you can easily get to the top end of the $8.3 billion to $8.4 billion. But is there any issues that we should be aware of in the second half? I mean I know your divestments of some businesses -- but yes, there could be some cost up as well that you may do in the second half?

Second question is just on fixed can be obviously a very good result on the profit side. But Michael, you mentioned that you'd like to stabilize the NBN stops over time. And yes, if we look at this result, I think your NBN sub still declined by about 75,000. And yes, I'm just wondering what you can do to arrest this decline given that you've introduced Internet-only plans. You have moved your customers to a new technology stack. But if you look at what's been happening in the last 2 weeks, your competitors, especially the challenger brands have been doing some consolidation as well. So I'm just wondering what you can do to get you restat decline in NBN stops. And lastly, just a quick one on mobile ARPU.

You mentioned about network slicing in the past and how that could to mobile ARPU, especially in postpaid. How are you going about introducing that slicing to differentiate certain plans and the impact on ARPU, please?

Thank you. Thanks, Roger, for that. And we're getting the hurry out from Nathan, we're speaking too much. So let us see if we can fire through these three quite quickly. I'm going to come back to Michael, on guidance. I think he can give a very concise answer on that.

On C&SB fixed, I'd just say, first off, Look, the team have done a great job in that business, and Brad spoke to earlier just how much EBITDA profitability in that business has changed in a small number of years. But absolutely, our focus is now on stabilizing customer numbers. The Internet-only proposition only went into market in November. So our focus and Brad's focus with the team is absolutely in our channels, in our marketing because although we might all know about it, I'm pretty confident that a lot of customers in the market don't know about that proposition yet. So we will focus absolutely continuing to deliver a really high-quality experience for our customers that meets their needs. So that will be the focus there.

In terms of mobile ARPU and slicing, yes, we've got slicing product in market in our enterprise business. It is very early days, and Connected Future 30, a big part of that is network as a product. So how we build out how we make sure we have those network attributes, but we're reinventing the commercial models that go with those attributes. So as we create value for customers, we also share in some of that value creation. So very early days on that, but we remain optimistic. We've got the foundational investments going in, in network, systems capabilities to put us in a position over time to be able to make sure that level of sophistication in our network that can meet the level of sophistication of our customers' needs going forward. that we get that to work well together. So that's definitely our focus as we look at the business going forward. Michael, are you happy to cover off guidance of second half?

No, absolutely. And thanks, Roger. So yes, there is a few things sequentially that are impacting it. So one is we had around $45 million of one-offs in international that we don't expect to repeat. So we will see a significant sequential decline in international, not only that $45 million, but also the divestment of the wholesale voice business in international. So that will be a sequential decline.

We mentioned other EBITDA. In other EBITDA, there was, I think, around $20 million of bond and FX gains that we are not necessarily forecasting to repeat in the second half, which will provide a bit of a headwind. The second one is probably on redundancy. Redundancy is traditionally -- or sorry, traditionally, has over a number of years, been a tailwind on cost into the second half because we've done more redundancy in the first half than the second. We announced that we were consulting on some changes last week. If they were to go ahead, we would expect to see redundancy not be that tailwind into the second half. Of course, offsetting that, we have productivity flowing through as we talk to.

I think the other one, as we look into the second half is just based on the historical timings of some of the price rises across particularly in the consumer portfolio, whether that's fixed or mobile, we would expect to see some of that revenue growth sequentially to be a bit more muted. And then, of course, as I said, on top of the other divestments that we expect either have completed or we expect to complete in the [ NAS ] portfolio.

Excellent. Our next question is from Nick Basile from CLSA. Nick?

Just two questions. The first one is on AI. I think in your opening remarks, you talked about rationalization of software providers and deployment of AI across the coding team. So I'm just interested to understand or get a little bit more color on how that is benefiting you and how it helps you, I guess, deliver on the 2030 cost ambitions. And also just to what extent at all you've managed some of that vendor concentration risk now from a cost inflation perspective. So that's the first question. So there's a few add-ons.

And then the second one, is just on incremental returns on mobile investment. I guess with respect to the commentary around your investment in augmented services using satellite networks, just wanting to understand what the incremental margins on this capability is relative to selling services, leveraging your terrestrial mobile network.

Yes. No. Thank you. Thanks, Nick, for that. And a couple of great questions. Well, I'll take the second one first off and then make a couple of comments, but I might get Kim Krogh Andersen, who leads product and technology and is really -- has been the driving force between a lot of the pieces you mentioned on the software side.

So just on mobile. Obviously, satellite to mobile, I would think about that. It's a -- we are leveraging the capabilities of another of a third party. So it's I think about it like a reseller of a service. So obviously, the incremental margin on that sort of business is very different to where we own and operate the infrastructure ourselves and obviously, very different CapEx dynamic. We're not the one investing all of the money in launching [ LEOSat ], so we are a reseller of that service. So -- but it is, I think, as Brad spoke to, really important, it is a key element of our proposition, how we bring these services to our customers.

And again, as Telstra, we provide a premium experience under our Telstra brand in the market. And so being one of the first few operators globally to be able to bring that to Australian customers because we could see the service was could really serve a purpose here, whether it's when terrestrial networks are disrupted or when people in our very large country or outside mobile coverage. So that's how we sort of broadly think about that.

As you said on AI, I made some comments this morning because I think it is really important to understand there has been investment and work underway for years as we digitize our business as we're applying AI and particularly in software development is so critical in our speed to market and being able to deliver at the level our customers expect. But Kim, I might just get you to make a couple of comments, if you can, on those benefits, how it's being driven? And then how you thought about vendor consolidation risk.

Yes. Thank you so much, and thanks for the question. First of all, we have been modernizing our tech stack for a very long time, and tech leadership is a core part of our connected future strategy. Mike mentioned it, and I want to reinforce it, we have actually managed to decrease our cost intake over the last few years. And that's despite inflation, but as you mentioned as well, there is a lot of partners that really want to hike the price to justify and get return on their AI investment. So we have managed to combat that and ensure that we take the value of these digitization, simplification, AI, et cetera, instead of that become revenue in some of these partners' pockets. So that's important for us because we want that value to go to our customers and to Tesla to our shareholders.

I think Vicki mentioned that we have actually seen a 20% production improvement in our software deployment. And not only that, we are also shipping our software and releases faster, 15% to 20%. That comes from and more efficient software flow. So we have seen 12% improvement in EPIC flow. We have seen 29% improvement in our defect rates. So it's great to see when quality, time to market, but also our efficiency come together.

It is AI-enabled all of it. We have now most of our software engineers, they are using GitHub Copilot to really ensure they produce more code faster. We also use AI for testing. We use AI for quality assurance for architecture assurance, but also for change management and other things. We use AI for migration and all these things is a part of us really driving this. But we have consolidated partners that both applications. So we have done a lot of exits of application we don't use. We have consolidated our partners. Vicki mentioned, we have consolidated our SIs from more than 400 down to two. And these two cognizant emphasis, they're really incentivized to help us to simplify and help us to adopt AI as fast as possible.

So all these things is a part of us really creating the right foundation for us to drive this company forward. And it's hard work, and we're not done. We keep pushing hard. -- but we believe we have a foundation now where our segments, they can compete, where our channels, they have a good experience and our customer have a good experience. These have been very critical for software, but it's even more critical for AI.

We believe that if you don't get that foundation right, we will actually see the run cost of AI outperform the benefit of AI. So we are very focused on that foundation to get that in place. We have 380 use cases today. So we are at scale. We are deploying again tech now. So the whole reason for us doing the two joint ventures with Quantum and [indiscernible] was to ensure we have that foundation in place because we want to ensure as we have many sites, we are not an AI company, but to be a leader -- a leading telco, we really need to be a leader in AI and in software. And this is the foundation. And these partners, they keep pushing us forward. and really ensure that's in place. So we are pushing hard here, but there is a lot to do.

We'll go to Brian Han from Morningstar. Brian?

We will go to the next which is from Andrew Gillies from Macquarie. Andrew.

I'll keep it to one, just in the interest of time. Not to put too much of a finer point on it, but just on the AI and data strategy, just a little clarification. You mentioned kind of faster delivery on this. Should we be thinking about that as kind of a structural forward of the cadence of cost out.

I mean, Infosys was flagged before. Some of your outsourced partners are flagging really strong efficiency benefits, both internally for themselves, but also for the businesses that they work with -- more broadly, more recently, we've seen software vendors shifting from seat-based models to more of a value share-based model. Can you just clarify that that's all captured in your comments around cost on this call? And can you make a little comment on the cadence? And I presume you're going reiterate the medium-term EPS CAGR, but that would be great.

Yes. No, thanks, Andrew, for that. Just -- again, just to reinforce, as we work with our partners, whether it's Accenture under our data and AI joint venture, whether it's Infosys as a key software partner and also, obviously, we're planning to also use them more extensively to help us in terms of really simplifying the complexity in our enterprise service delivery for our customers.

Look, I think Kim sort of covered it briefly then. As we enter those arrangements, they are built on very much aligned incentives of delivering real efficiency in terms of our partners have to be able to really be leaning into using AI to drive the efficiency and the experience benefits under those arrangements that we've entered into. So as we look forward, yes, those partnerships are another element of how we make sure we're driving efficiency in our business.

Kim spoke to, our goal is like we did with the data and AI joint venture with Accenture, we're accelerating a 5-year road map we had into a much shorter time frame, but without driving cost up. And so we are very conscious of making sure that as we move forward, that alignment with our partners, we're both driving to get the efficiencies from the application of AI into our process systems and interactions is absolutely built in. And Michael, in terms of our forward sort of ambitions.

No. I think within our -- it's captured in our forward ambitions. It's covered in that commitment to operating leverage, which I think is really important to growing revenue faster than we grow costs, and that opens up those jaws. The one point I would make, and I think it's really core to our technology strategy and how we're going about it is we are very -- and Kim made the point, there is a risk here that you end up in software licensing in cloud costs and in paying the AI providers that you offset your benefits. And that is very much our focus.

We've made tremendous progress in the efficiency of our cloud costs. We're getting significant efficiencies around the way that we're focused on how we buy software. And that is embedded in our strategy to ensure that we're using an open architecture, modern software approach, and we're setting up the way that we're executing AI right now so that we can swap out vendors that we can move between LLMs and that we are really focused on the cost of both cloud and AI. And I think it's been a really important point around those technology costs. It's a great question, Andrew.

We'll take two more questions from analysts after which we will move to media. So got a media on the call, and you do wish to ask a question, please register by pressing star one. Our second last question comes from Fraser McLeish from Credit Suisse -- I got that wrong from MST.

Just two quick ones for me. Just -- Vicki, a fair bit of discussion on AI in relation to costs. I'm just wondering, and I be a competitive advantage for you in the marketplace in terms of being able to invest more and faster than competitors and customer tools and experiences or do you expect all players to broadly have the same capabilities.

And then second quick one maybe for Brad, just on fixed broadband. I mean are you expecting much spin-down from these new Internet to these new Internet-only plans? And what are you doing to minimize potential for that?

Thanks, Fraser, for that. Just on AI and where we're at. I think the thing that's front of mind for us is it's moving so fast. And so we are absolutely focused on. We can't be complacent. We've got to be pushing really hard because we do see ultimately for us to be a leading provider of connectivity. We're not an AI company, but we absolutely need to be a leader in how we are applying AI.

And that's because, yes, it affects all the obvious parts of our business, how do we make those customer interactions more efficient and better for customers. How do we enable our teams to be able to use AI and work smarter and have greater satisfaction. But it's also right in the heart of our business, the network itself. And if I look at where networks are headed, and we do have Mobile World Congress coming up shortly. So we'll get another injection of where everyone a year on sees things headed. We absolutely believe networks are headed to be much more autonomous. And the complexity of doing that, you absolutely need to have AI deeply embedded and being at the forefront. And so absolutely been at the forefront of delivering world-leading connectivity is absolutely at the core of our differentiation.

So moving fast, I think it's not just having it. I think it's moving at the pace and scale needed to make sure we maintain our differentiation. We do provide a premium experience in the market for our customers under the Telstra brand. And so we're very much focused on making sure we're moving fast enough. We are delivering those benefits to customers. We're helping our teams grow their skills and be able to use these tools effectively in the way they work.

And ultimately, yes, we see it as an important piece.

I mean long run, with any sort of technology, obviously, over time, I would expect it becomes more widely dispersed. But absolutely, we see it as important. The pace we move out here and really enabling our business with it is an important focus for us to deliver for our customers. On fixed broadband, I don't know whether Michael, you want to grab it or we want Brad just to quickly jump up and grab the spin down.

I'm happy for Brad to.

Yes, Brad please.

Just I can't resist on the AI as well. I think you mentioned that Telstra Virtual Agent, which we've deployed and that is, I think it's the start of a competitive advantage there. We've more than tripled the containment since we've launched our -- that AI agent to customers. So they're able to get their needs and that without having to go to a human agent.

And another one I'll mention, which is really cool is you can now -- using AI, you can change our entire digital experience into over 35 different languages. We've got about 30 -- or rather 70,000 customers already do that, and that just makes it much easier for them to engage with us. So that's an example, I think, of where it helps us addressing the customer.

In terms of the broadband only, there's a couple of areas that we're focused on there. One is opening up to customers that genuinely -- they have their own modem at home, and they're just looking for the broadband connection and not looking for that full experience. We think also though this gives us a softer entry point to have a conversation with a customer when they come in, they see a price point that they're comfortable with, and we talk about the value proposition and what equipment they do have in the home and to then talk about the advantages of things like our smart meter or smart modem 4.0 rather. So we're not anticipating significant spend out. We think those are two different segments of customers, but we will keep an eye on that.

Excellent. And we will take our last analyst question from Nicole Penny from Rimor.

And further detail on the Aura opportunities you're seeing. Just secondly, the CapEx on the ViaSat project remains ongoing. Could you provide more color on the expected completion time line and the likely earnings impact during this period as the project moves toward full operations let?

Okay. And Nicole is at the only one, have you got any others?

That's it. Thank you.

Fantastic. Thanks, Nicole, for that. Look, I'll make a comment, and then Michael may want to jump in. Just to be clear, and hopefully, the appendix, again, helps reinforce it in the material we've issued today. We think about Aura and ViaSat inside that $1.6 billion of CapEx spend and those overall returns are linked to that.

The profile is a little bit different. ViaSat is the smaller component inside that overall program of work, where we have been supporting with the build-out of ground stations and other infrastructure. So it's captured inside that broader financial profile that you can see. So it's intercity fiber or Aura, as it's now called, and ViaSat combined. I don't know, Michael, if there's any other color...

No, I don't think so. I mean the ViaSat has been delivered on an ongoing basis, and we've seen the revenue start to appear through both InfraCo but also into our Telstra Enterprise business. and that will continue for the life of that project, their long-term assets in terms of those -- the ground stations and well on track.

Excellent. That concludes our question time from analysts and investors. We'll now show a short video, which I suspect you do not want to miss because as Brad would say, it is pretty cool. So we'll show that. And after that, we will have time of questions from media.

[Presentation]

Thank you, and welcome back. Thank you, Nathan, for that handover. We hope everyone enjoyed the new ad. We will now commence our media Q&A. We are slightly early. So Apologies to some media who may be joining at 11, we will obviously drop you into the queue. In this session, we have Vicki Brady, our CEO; and our CFO, Michael Ackland, who will be available to address your questions that you have asked. [Operator Instructions] But we will move to questions. Our first question today comes from David Swan, from 9 Metro Publishing. So Swan, over to you for your first question, please. .

Because I'm on the call, but it sounded good. I'm sure I'll say what it is. I wanted to ask about spectrum strategy. I've got free questions all related to that, so I'll just fit those away. You've told ACMA the fair price is $1.4 billion, and they've come back at $2.7 billion. Is that number -- I guess what the number Telstra would accept without passing cost on to consumers? Is there a sort of landing zone there? Or is it a binary number.

I wanted to ask as well, you've said the trade-off of spectrum is between network investment and consumer pricing. But -- is there a third option, which might be absorbing the cost through lower returns to shareholders? Is that something that Telstra has or would consider?

And third, I wanted to ask about ACMA's renewal process I mean you didn't avoid a competitive option, which could theoretically cost more. Is the $1.3 billion gap you've complained about still cheaper than the alternative, a competitive option -- is that something that came to -- is a competitive option, I guess, some can to avoid?

Thanks, David, for that and some great questions on spectrum. So first thing I'd say is, as you called out, we absolutely agree we've got to pay a fair price for spectrum. It's a core part of delivering high-quality mobile services, and we see spectrum as 1 of those assets as a country, we absolutely need to be maximizing its benefits to consumers and businesses. We do think as a country, it would be helpful as part of a digital infrastructure plan to have a clear plan for spectrum long run. This process right now is renewal of spectrum. Obviously, there will be spectrum needed for 6G, for future satellite services for lots of other things as we look forward. So we do think having a really clear plan for how we maximize the use of spectrum to get the maximum benefit for consumers and businesses is super important.

Look, obviously, the process is still ongoing on the pricing of the renewal of the spectrum that's part of the ACMA process right now. We have a different view to ACMA. And that will be part of our submission back in as part of that process, as you call out, there's about a $1.3 billion difference in what we think the value -- fair market value of the spectrum that we will go through renewal on versus what the ACMA currently see as the fair market value for that.

Look, in running a telecommunications business like Telstra, you're constantly balancing up various things and various trade-offs. Importantly, Telstra, like all telcos is a big infrastructure business. we've got to invest a lot of CapEx into our business. And if you look globally, telcos have been challenged on getting reasonable returns because we need to be profitable to make sure that we can keep investing, and that means investing in our network in things like the 5G advanced capabilities or bringing services like satellite to mobile testing, the satellite messaging service we launched last year.

And we're seeing customers NPS is up. So we've got to keep investing because expectations also keep rising. We know we've got to keep investing to be able to attract and retain the best talent and investing their skills. And yes, we also need to deliver returns to shareholders. We've got an underlying return on invested capital at 8.9%. So through a lot of work, we've steadily seen that increase. It is above our cost of capital, but it's probably -- it's not at the level that our investors would ultimately hope for. So we do have an ambition to grow that to 10%, and I don't think that is unreasonable in any way.

Remembering our shareholders, we have more than 1 million shareholders. We've got the largest retail shareholder base in the country. And we know through things like superannuation, we estimate about 16 million Australians benefit from the financial outcome. So yes, there is absolutely a balance we need to achieve as we make choices and decisions, higher spectrum costs just puts again extra costs we need to consider, and we would have to think about the various trade-offs as part of that, but the process is still ongoing at the moment.

Thank you, David, for those questions. Next up, we have Jared Lynch from the Australian. Jared, please go ahead.

Questions for you. Telstra's first half profit was driven by strong cost control, and it's a strategy that you plan to intensify with the proposed job cuts in the current half. Just wondering, how will you ensure that prioritizing short-term cost savings and fine will not fundamentally undermine the in-house expertise and people-driven innovation necessary to deliver the long-term growth in service quality promised by your expected future early strategy?

And then just on the Connected Future 30 strategy. I'm interested to hear how will your investment in AI and data functions, including the JV with [ Essentia ] be deployed to solve 1 of the nation's most pricing challenges, whether it's climate resilience, health care accessible and access in regional areas or digital inclusion. And I guess what is the legacy that you want Telstra's new capabilities to create for the country?

Yes. Thanks, Jared. A couple of good territories there. So let me go firstly to first half. Yes, we've delivered a strong first half performance. And yes, as part of our strategy, given we have very small revenue growth to deliver positive operating leverage. We absolutely need to be driving cost and efficiency.

But as we think about our business and we think about the capability we need to be able to deliver a long run in this business. Absolutely, our internal teams are critical to that, and we keep investing in our teams internally, whether that is in things like their ability to be able to use and apply AI capabilities because we fundamentally believe for all of our team, they will be better positioned in the future, the better able they are to apply AI and use it in their jobs. So we're absolutely internal capability remains critical. It wasn't that long ago, for example, we brought back our retail stores, and we've heard Brad speak about this morning just the benefit that has driven in having such a highly engaged team of people out there servicing our customers face-to-face in our stores.

We also will partner with key partners and the couple of things you mentioned from last week. They are two examples of where we are partnering. First, in terms of our enterprise business, we've still got a load of complexity we need to get through in that business. So we did announce and propose some changes where we are partnering with Infosys to really be able to access their capability to help us simplify the complexity in that business in the way we serve and deliver for our enterprise customers. We also proposed changes in the Telstra Accenture data and AI joint venture. Again, that is about accessing Accenture's global capabilities to help us really accelerate our road map on data and AI to be able to deliver benefits to our customers and into our business more quickly.

So absolutely, it will be a combination. Our internal teams are critical and we keep investing in them. But we also to remain competitive and at the forefront, we've also got to leverage partnerships. And I can assure you any decision that impacts a role inside Telstra they are never taken lightly, and we support and work with our teams very, very closely as we work through anyone who has a role impacted as part of any of those choices and decisions.

Just in terms of Connected Future 30 and that ambition as we look forward. I think fundamentally, we see connectivity. It is a foundational piece for the country. You look to the future of inclusion of productivity of prosperity. Technology is going to play a key role and having a really solid foundation of bleeding edge connectivity that is there to deliver to all of those future needs is absolutely fundamental. You spoke about things like health care, I think about education. I see the way we work and connect regional communities. It's absolutely core to who we are as Telstra and the focus and delivery of our Connected Future 30 strategy. So absolutely, that core foundation of leading connectivity we think, helps enable the country in terms of those future ambitions of inclusion and of prosperity.

[Operator Instructions] We will move to our next question in the queue, and we will go to Graham Lynch from CommsDay, please go ahead, Graham.

I wanted to ask about spectrum renewals. I'll be following the debate around this quite closely now for a few months. And it seems to be missing the reality that over the next 15 years or so, which is the period we're talking about, 5G and then 6G is going to require a lot of new spectrum in addition to the renewing spectrum, but also Australia's population is probably going to grow by quite a few million over that same period, which means that telcos such as Telstra are going to have to install a lot of new capacity in cities to do build that extra population. Is this -- these two realities as to be missing from the discussion around spectrum? And are they informing sources posture on renewal prices and perhaps could Telstra be better articulating the issues that we'll be facing in coming years?

Yes. Thanks, Graham. And I know I've been reading some of your articles that you've been writing in your opinion pieces, you're incredibly well informed and understand our sector and how important spectrum is.

So look -- yes, no, I really appreciate it because it's a really important question where you've gone. Absolutely, renewal is important. As you well understand better than anyone it is 80% of the spectrum that our current mobile networks run on today that will go through this renewal 2028 through 2032. So the certainty of renewal is absolutely a positive. Obviously, we are debating with the ACMA what each of us think the fair market price of that spectrum is because we absolutely, we accept, understand we need to pay a fair market price on fair terms. So that's important.

But I think where you've gone is critical. And that's why we have been advocating that as a country, we do need a really clear vision for the digital future that has a very clear digital infrastructure plan that includes Spectrum. Because where you've gone as you look forward over 15 years, it's not just the renewal of spectrum. It is all of those new services, all of those new capabilities like 6G, like some of the satellite capability that is currently sort of forecast to be able to be delivered over that time horizon. I think as a country, we absolutely need to be thinking about how do we maximize the use of our spectrum so we get the best possible outcomes for consumers and businesses. And I think that's an important piece that needs to be brought into the thinking.

And again, that's not easy, and we are very happy to be part of that as Telstra and I think as a sector, alongside government and regulators as we think about how do we absolutely set up the country to maximize the use of spectrum to get the maximum benefits for consumers and businesses. So I think it is an important element right now, a lot of focus on renewal because that process is obviously well underway, but I think your broader point is incredibly important.

Next up, we have Jenny Wiggins from the AFR line. Please go ahead, Jenny.

Three questions on as well. Just with regards to AI. Can you give us any more examples of how exactly you accelerating Telstra's investment in AI other than what you're doing with Accenture. I mean, for example, is Telstra spending more money on AI investments in the current financial year.

Secondly, just more generally, do you have any views on how the federal government can productivity and economic growth in Australia. And thirdly, with regard to the ongoing problems with the 4G VoLTE networks, that's an issue for all network operators and device manufacturers. Do you think Telstra will ever be able to guarantee that in the future, all mobile phone devices that are sold in Australia, we'll be able to connect to 0 without any problems. So I mean, do you think your testing and talked with device manufacturing, we'll ensure that after the current slate of problems we've had.

Thanks, Jenny. Well, lots in those three questions. So let me take them one by one. In terms of AI, when I talk about accelerating our data and AI road map, that's absolutely about accelerating the use cases and the benefits and scaling those across the business.

In terms of where we're seeing some of that acceleration, we're absolutely through our data and AI joint venture with Accenture. That's really helped us accelerate some of the fundamental pieces like really streamlining the number of data platforms that we rely on. So we're absolutely seeing acceleration there. We're not talking about accelerating spend. So one of the things we're really clear on is, as we make choices on partnering or going into joint ventures, how do we align our ambitions and incentives so that it is about being at the leading edge of being able to apply these capabilities into our business, but do it in a way where we do manage our costs because we're very conscious of that. It's an easy area to spend a lot of money and that to grow fast. So we're very conscious of those and thoughtful in how we set up those partnerships and how we architect the technology inside our business to make sure we have choice so that we can both get the benefits, accelerate those benefits but also not see our costs grow beyond where we are comfortable with that being.

Just on the productivity agenda for the country, I think it's such an important discussion. One of the things we've been strong on is we do think, as you look forward for our country, whether it's productivity and prosperity of the nation, there's no doubt technology is going to play a big part in that. And we think something that isn't always at the top of the list is that technology, whether it's AI or data centers, it does need to be connected. And so having a really clear digital infrastructure plan for the country. So that as a sector, we can align behind that with government, with regulators, so right policy decisions are made, the right investment decisions are made. The regulatory environment is set up to, yes, protect customers, but also encourage innovation. So we think that's a really big piece as we look forward. And we're really optimistic about what technology and the important role that connectivity can play in helping to enable that for the country.

On the third one, where you're talking about triple 0. And yes, obviously, there's been a lot of focus on triple 0. The first thing I'd say, it is a very complex ecosystem to ensure triple 0 works from the devices themselves through to the networks and the different softwares and protocols that are running over networks through to getting the calls through to emergency services who operate across around the country, state-by-state, territory by territory.

Look, our focus, this is a complex ecosystem, and I think everyone in that ecosystem is working to try and make sure it works absolutely as well as it can. And I would say, obviously, any call that doesn't get through is too many. But the large majority of that ecosystem does work well. There are some complexities in devices you're spot on. And obviously, devices come into the country. device manufacturers have to accredit those. We do testing on our network, but it is a dynamic area where devices are changing, software is getting updated, networks are changing. And so we work really hard to make sure we meet our obligations to be monitoring devices and obviously, as part of some of those obligations, it does mean blocking devices if we find they cannot make triple calls. And so I think it requires work right across that ecosystem to make sure Australians continue to trust and they should trust our system to be able to get help in an emergency.

Our next question comes from Rayna Bosch from SBS.

We might be having some issues there. So we might go to David Taylor from ABC. David.

Well, thanks for your presentation. It's quite a trial what Telstra is doing. The ABC has spoken to both employees, current employees of Telstra but also previous employees of Telstra. And those who have been contracted by companies to be also employed by Telstra. And there's a real sense of fear around how your AI investment in AI rollout is affecting jobs.

So can you give me an idea of -- so it's a 2-pronged question, I suppose, over the past 12 months, what proportion of jobs could have been lost within Telstra are related to your AMI rollout? And how many -- what proportion of jobs are going to be lost, at Telstra up to 2030 based on AI.

Okay. And thanks, David, for that. So first off, I mean, the pace of change in AI is quite extraordinary. And when I'm engaging with our teams internally. Yes, one of the questions is what does it mean for my job going forward? And I think the thing we're focused on is absolutely none of us can predict that future. It is changing so fast. I look back over the last couple of years, just how fast it's changed. None of us, I think, predicted that.

So the thing we're focused on with our teams -- in an environment where it is uncertain how AI will be used, I think the most important thing is skilling our teams. And so we invest heavily in the tools available to our team members. We invest heavily in also the training and skills of our teams through our data and AI Academy because irrespective of what the future is and how it plays out, we firmly believe that our people who have better capability in being able to use and apply AI will be better positioned for future jobs.

So we're very much focused on that. And I do understand it is a question top of mind for our teams and as I engage across the country and travel internationally, it feels like a very common theme. The world is moving fast. So our focus is on how do we scale enable our teams, give them access to the tools. And we are seeing our team members who have access to our AI tools, which is the large, large majority are using those tools on a weekly -- 75% of them are using them at least weekly and often a lot more often as it becomes part of the way they work and operate.

So as we look at impacts on our business, and yes, any decision to impact a role is a difficult one. We have had to face into those decisions. They are necessary decisions to put us in a position to be competitive to be able to deliver at the level we need to for our customers. Those benefits. Today, there's not a role I could say, has directly been taken by AI, but of course, our investment in digitizing our business, our investment in applying AI is generating a more efficient business for us. And that's why, as I said, our focus is absolutely on working with our teams that investment in the tools and that investment in their skills.

Thank you, Vicki. Our next caller is Brandon Howl from Capital Brief.

Just wanted to touch on an earlier comment that was made during the analyst call. I think it was like that because of Telstra's disciplined capital management, it would be able to navigate the upcoming structural real fees if they would just go through as they currently proposed. I was just curious if that means that there's unlikely to be significant disruptions to existing investment plans, at least out to 2032. And just wanted to touch on a separate point as well. It was revealed -- Telstra revealed earlier in the year to the 0 service outage inquiry. That suffered about -- more than 5,200 mobile tower outages last year. I was just wondering what commitments are you making to ensure that this is brought down.

Yes. Thank you. Thanks, Brandon, for those couple of questions. Look, this morning on the call with analysts, the question was around our capacity to be able to if those spectrum renewal cost come in as is currently proposed, how would we be able to navigate that. .

One of the things about Telstra, we're very focused on is ensuring the business is in the right position to be able to continue to sustain investing in the business. And we've worked over many years now to steadily improve our overall returns in the business. They're still not super high. They are above our cost of capital however. And obviously, if that cost does land higher than what we think the fair market value is, and that process is still ongoing, then that will be a consideration we need to consider. As we think about various trade-offs, where we're investing our money, how we're positioning and pricing in market. So there are a whole lot of factors we would need to consider.

The point this morning is are we set up to be able to navigate that as a company. And I look at where we're at, financially, our ability to keep investing in the CapEx needed to support the business our balance sheet capacity as a business. So it was a broader comment about being able to navigate through that.

Just in terms of triple 0. Obviously, there's been a huge amount of triple 0 focus, particularly through the latter part of last year. Telstra takes its obligations incredibly seriously. We do have two sets of obligations. We run the emergency answer point for the country. When someone calls triple 0 under a contract with the federal government. It is a Telstra person that answers that call and passes it then on to the relevant emergency services, and we have our obligations as a telecommunications company, including as a mobile operator. We invest huge amounts of our CapEx into the resilience of our network. These are large complex networks. And they will have issues over time, particularly, I spoke this morning about the investment in power backup systems. The single biggest thing that impacts the resilience of our network is power outages. So we do invest in power backup. However, there are situations where power is out for extended time, it could be that equipment fails, they're not infallible. And so we absolutely invest heavily in resilience of our networks.

We also invest in things like new technology, bringing satellite messaging to customers just as another form, if there is an issue on the terrestrial network, there's another layer. We also encourage our customers who are heavily reliant on being connected to think about multiple technologies rather than relying on just one. So there are many things we do. These are large complex networks, and they're not infallible, and we invest huge amounts in their resilience.

Thank you, Vicki, for that. Our final caller for today is Andrew Cole from IT News.

Can we have an update on Telstra's lease of OneWeb last constellations and the issues you're having with complaints about the performance of small cell base stations. As you tell at provided an update on when it might be able to fill coverage gaps in its constellation over Australia to eliminate the voice service roots when using those lower sets or backhaul on those installations?

Yes. Thank you, Andrew. And so yes, as you well understand, you understand this technology well. We have rolled out using OneWeb's LEO satellite constellation backhaul over their satellites to some of our remote sites. And their rollout of their satellite constellation hasn't gone as planned on their side. So it does mean today, there are some issues, particularly impacting voice.

However, in terms of data performance, we have seen significant improvements by being able to access that LEO satellite service. We are working through that, working closely with communities and our customers to figure out we have rolled it out to a relatively small number of sites to date. That rollout is not going further right now as we work out what is the right balance to find here.

It does provide real benefits, much more capacity, much better performance in terms of data over those sites. However, as you call out, there have been some issues around voice dropouts given where that constellation is at. So that's something we continue to work through with OneWeb. And our teams, as I said, closely engaged with customers and communities that rely on those small cell services.

Ok, I have one more question. What I'd be able to ask, you've sought some delays to the Universal Outdoor mobile application to push it back a year. Is the federal government given Telstra any indications it's open to doing that. Or rolling back the legislation for further consultation?

So just in terms of the universal outdoor mobile obligation legislation. So first thing I'd say is we're absolutely at the forefront of rolling out those services in the country. We've already got satellite messaging that we launched in June last year in market. So commercially, we absolutely see the benefits of these services.

Under that legislation, it looks at then future services, voice, data. Some of that is dependent on brand new constellations, brand-new capability that is not commercially available today. So as we've thought about that, and we've given input, that's just an important element. Some of this technology is very early, some of it not in market yet. So obviously, that's going to be an important factor, but we're absolutely at the forefront of bringing those services to Australians because we see them as important services, an extra layer of resilience in the event a terrestrial network has an issue. And also that ability in a country as large as Australia when people are outside of mobile network coverage, that ability to stay in touch.

Thank you, Andrew, and thank you, Vicki. We do have one final question. Jared Lynch, just had a follow-up question. So Jared, just over to you for your follow-up, please.

Thanks, Steve. Vicki, today, other business leaders were on that with our productivity gains that this is as good as it gets after real wages failed for the first time in more than 2 years. I'm just interested about capacity constraints at Telstra and whether you're changing investment as a result of inflation or capacity constraints and are being delayed?

Okay. I must admit, Jared, I did see some headlines this morning. I haven't read the transcripts and understood the full context of some of those comments. But in terms of where we're at, we're having to navigate -- obviously, there are inflationary pressures on some of our costs. That's why I've been at the forefront of how we really drive efficiency and better outcomes for our customers is at the forefront.

We're navigating that. We are very focused on what we call positive operating leverage. So we're in an environment where we're not seeing top line growth at any large level. So we've got to continue being efficient to be competitive to be able to deliver at the level we need to for our customers. So right now, we are navigating that, you will have seen in terms of our overall result, we did reduce overall costs. So we're able to offset that inflationary pressure that yes, we feel like consumers and businesses across the country feel. We've been able to offset through some of the hard work, the discipline and the gains that we found particularly through technology investment.

Thank you, Vicki. Thank you, Jared, and thank you to all the media and analysts that have joined our call and Q&A today. Thank you for your time and investment in today's call. We will now wrap up the half year results update. Thank you very much, and have a lovely day.

Dear shareholders, I am Nathan Burley, Head of Investor Relations, and it is my pleasure to be your emcee today for our 2025 Annual General Meeting.

Before we start official proceedings, I would like to welcome to the stage Elder Tony Garvey.

Can we try that again for the traditional owners here today? First of all, I'd just like to thank you for that very warm welcome, and thank you all for inviting me here today. I think it's very important we walk this journey together. Now we are a multicultural society.

I'll start the event off with saying Wominjeka, Wominjeka to everyone. Wominjeka. Wominjeka in the Wurundjeri Woiwurrung language means welcome. So welcome to all indigenous and nonindigenous people here today.

I'd also just like to say I'm very proud and honored to be here today standing tall for my people once again, like I have done for 36 years, and I will continue to do so for the rights of our own country. My great grandfather was the last leader for Wurundjeri. Ngurungaeta in the Wurundjeri Woiwurrung language means last head tries leading our mob out on the mission at Coranderrk, where I live today with my family. He took over from my great, great uncle. My great, great uncle was King Barak. King Barak was our fearless leader that took on the government for land rights in the 1800s, right up to 1903 when he passed. My great grandfather took over leadership of Wurundjeri from there, and he led our mob from 1903 right up to 1924 when the mission was closed due to colonization and being forced out into the white community and to also build the township of Healesville.

The Wurundjeri people, they are also a part of the Kulin Nation. So, Kulin means man. In the Kulin Nation, we had our five language groups. We had the Wathaurong to the West, the Kurung, who are the Westleigh neighbors to the Wathaurong, Taungurung to the Northeast, Boonwurrung to the Southwest and the Woiwurrung of Wurundjeri territory that we stand on here today. The Wurundjeri lies within the cities of Melbourne. It extends from the mountains of the Great Dividing Range, south of the Birrarung to the Mordialloc Creek, west to the Werribee River and East to Mount Baw Baw. The Wurundjeri people, they have a social totem. It is Bunjil, the Eagle. Bunjil represented spiritual powers throughout many parts of Australia. Bunjil taught all the laws about life, behavior and ceremonies to make sure that our culture would continue for all walks of life throughout Australia. So Bunjil was referred to as the creator of mankind. Bunjil created great people from the land. That is why we call the land our mother or the mother of creation. Never can the land be taken away. So land will always belong to aboriginal people as we are part of the land and the land is part of us.

Our story is similar to the European people. Theirs is by their chosen faith, ours is by the dream time. We both have creators and beliefs and ours is Bunjil. It is a traditional custom of the Australian aboriginal communities to be asked and to give permission for people to enter their lands. And today, you've now joined with me to honor the spirits of my ancestors past, present and emerging, who have nurtured these lands for over 60,000 years. And we, as the owners of the lands, off your heartly welcome to the lands and hope that together as citizens of this beautiful country, we can build, develop and unite stronger nations for all peoples.

We'll close in the Woiwurrung language, which is Wominjeka, Wominjeka Wurundjeri balluk yearmann koondee biik, which means you're most welcome to the land of the Wurundjeri people.

Before I jump down and get that loud applause I am expecting, yoo-hoo, I just want to touch on all the people that supported the native title, all the people that supported the treaty. This country is the only country in the whole wide world without a treaty. So it is time to come to the fore. It's time to walk this journey together and respect all cultures in this country today. There's no room for racism, and we don't accept it as Wurundjeri people. I'd like to thank you all for having me here today. Cheers.

Thank you, Elder Tony Garvey. I'll add my welcome to everyone here in the sovereign room, and I'd also like to welcome everyone who is viewing the live webcast of our AGM online from wherever you are located.

There are a few procedural and housekeeping matters to run through before we get underway. For those in the room, we'll be serving a light lunch at around 11:30. However, if the AGM has not finished by that time, we will not be adjourning for lunch. We request that no food is brought back into the meeting room.

You will have been given a card when you registered this morning. Yellow cards are for shareholders who may speak and vote, and blue cards are for shareholders who may speak but not vote. You will need your card to ask a question or to reenter the meeting. A slide is going up behind me, which explains how to vote. If you have any queries about how to vote, please speak with one of our team members in the room or in the shareholder registration area outside who will be happy to assist you.

I will now like to outline the process for asking questions. For those here in the room, the Chair will invite questions from the floor from each item. Please move to the reservation area behind one of the microphones, show your card to the microphone attendant and give your name. The attendant will invite you to the microphone when it's your turn. Please only ask one question at a time and keep your questions and comments to no more than two minutes. Shareholders who are viewing the live webcast and wish to submit a question, please click the ask-a-question button on your screen and follow the prompts.

In terms of how we'll manage the questions, for each session, we will rotate between taking questions from online and in the room. We may have quite a few questions to get through, so we please ask shareholders to be patient. We will start with online questions to allow shareholders in the room time to move to a microphone. I'll read the questions as they have been written by shareholders. If we can't answer your question fully or we can't get through the questions today, we'll respond to any unanswered questions after the meeting, either directly or through the answers to common questions, which we will put on our AGM website.

Shareholders, if you have an individual customer or shareholder-related question, please see one of our customer service team members here today. For shareholders submitting questions online, if your question relates to an individual customer or shareholder-related matter, our customer service or registry staff will be in touch with you after the meeting. For shareholders viewing the live webcast, the online platform is open and you may submit your questions now.

With those procedural matters out of the way, I'll hand over to our Chair, Craig Dunn.

Thank you, Nathan. Good morning, ladies and gentlemen. It's my great pleasure to welcome you to Telstra's 2025 Annual General Meeting. Thank you for joining us today and for your continued investment in Telstra. This meeting is being webcast, so a very warm welcome also to the many shareholders who've chosen to join us online.

A quorum is present, and so I formally declare today's meeting open. A notice of meeting has been distributed to shareholders setting out the business and resolutions to be considered today, and I propose to take that notice as read.

The items of business on today's agenda are now being shown on the screen. Voting on Items 3 to 5 will be conducted by poll, and that poll is now open. Instructions on how to participate in the poll were distributed prior to the meeting and assistance is available at any time. There are two points related to these items that I will touch on briefly now. First, to better balance workloads and to meet growing regulatory and reporting demands, during the year, we expanded from three to four Board committees. The former Audit and Risk Committee was replaced with two new committees, the Audit Committee and the Risk and Sustainability Committee. There have also been some changes in committee membership to align with the change roles of the committees and to allow for appropriate cross membership of relevant committees. And second, I will comment on some important changes to our remuneration structure when I speak about our new strategy, Connected Future 30 later in my address.

I'm pleased to be joined by -- on stage by my fellow Board members, except Roy Chestnutt, who is an apology. Also joining us on stage is our Company Secretary, Craig Emery; and our Chief Financial Officer, Michael Ackland. Today, Eelco Blok is standing for reelection and David Lamont is standing for election, and we'll hear from them both shortly. I'm also standing for reelection, and so I'll ask Elana Rubin to take on the role of Chair for that part of today's meeting. Members of the senior management team are also present in the audience.

I'd now like to share some perspectives on our financial performance, some overall reflections on the last 12 months and comment on our Connected Future 30 strategy as we look ahead. After the successful delivery of T25, we move into the future with more confidence and as a better positioned company. And you can see that through ongoing growth in underlying earnings and the dividend. We met our financial commitments, including growth in underlying earnings before interest, taxes, depreciation and amortization, earnings per share and return on invested capital. At the same time, we continue to deliver for customers. We exceeded our T25 customer experience target and further improved our reputation score as independently measured by RepTrak. Importantly, we have continued to invest very significantly in our network and infrastructure to remain a leader in connectivity and which I'll touch on more a bit later.

We've delivered value to shareholders through dividend growth and the $750 million on-market share buyback completed in June. We've also commenced an additional on-market share buyback of up to $1 billion, which we announced in August. These buybacks are supported by the strength of our balance sheet and the underlying cash generation of the business. The Board believes they are an effective way to manage Telstra's capital base and support growth in earnings and dividend per share by reducing the number of shares on issue. Overall, we have delivered reliable and consistently improving returns, supported by a strong market position, valuable infrastructure assets and growing earnings. And pleasingly, that has been reflected in Telstra's share price, which is at near nine-year highs.

Before I reflect on the last 12 months, I'd like to make a brief comment on the recent incidents impacting the ability of some customers of another network operator to contact Triple Zero, noting that Vicki will add more detail on this important point when she speaks shortly. Incidents like this reinforce the significant reliance Australians place on their telecommunications providers, especially in Triple Zero emergencies. Large, complex networks are not infallible, nor are they available in every part of a vast country like Australia. But we also know Australians need to be able to trust Triple Zero. We take this obligation very seriously, and this extends to the important and unique role we play in delivering the Triple Zero service with our team members working around the clock to facilitate emergency calls. When issues like the recent Triple Zero incident happen, our focus is on understanding what we can learn from them so that we can also continue to improve. And we're very committed to working with the government, regulators and the broader sector to strengthen the resilience of Australia's emergency call service.

Looking back on the last 12 months now, there are three big things that really stand out for me. First, we've continued to improve the experience for our customers. We have now moved nearly all of the customers in our consumer segment to a new digital customer service platform, which has been a big contributor to lifting customer experience and cutting customer complaints by more than 70% since FY '21. We've also continued to invest in technology and partnerships to help protect our customers from scams and cybersecurity threats. And we lead the market in blocking millions of scam calls, text and e-mails from reaching our customers each and every month. We know the cost of living remains a challenge for many Australians, and we continue to provide assistance to those customers who need it. This includes our prepaid top-up program, which offers up to six months of essential phone services to Australians facing financial challenges. Over the last four years, we've helped, on average, more than 1 million customers in vulnerable circumstances stay connected each year.

Second, we've continued to invest in and evolve our network and digital infrastructure. Over the last seven years, we've invested $12.4 billion in our mobile network nationally with $4.7 billion of that invested in regional areas. In February, we announced an additional $800 million investment over four years to deliver the most advanced mobile network in the country, and we've expanded our 5G network to cover 95% of the Australian population. Part of that has involved optimizing how we use spectrum. Spectrum is used to deliver a range of services to Australians through the airways like broadcast TV and radio and mobile services. It's a scarce natural resource and is vital to delivering and improving mobile services.

The closure of our 3G network meant we could redeploy that spectrum to further improve 4G and 5G services, services that are faster, more secure and more reliable. This also meant we could retire aging and energy-intensive equipment, reducing our carbon emissions. We know the transition from 3G has not been straightforward for some customers, and we've been working to assist those customers who faced such issues.

We're also well progressed with the rollout of our intercity fiber network. We've now constructed more than 1/3 of this significant digital infrastructure project for Australia. And we've brought the latest satellite technology to Australia, including home and business fixed Internet rather and satellite to mobile messaging, which has been a big step forward for regional and remote areas.

Third, we've seen developments in artificial intelligence or AI move incredibly fast with enormous potential to benefit both the country and Telstra. To deliver the best possible connectivity and experience for our customers, we need to be a leader in how we deploy AI across our business. We're using it today to enhance how we serve our customers, how we protect them from scams and how we improve the reliability and resilience of our network, for example, by identifying and solving problems before they become an issue for customers. Already, we're seeing AI change how work is done and the value that comes from people and AI working together. People, of course, will always be a fundamental part of how we serve our customers at Telstra and getting that balance right will be important. As we do that, we're investing in our people to help them to learn and adapt. This includes 21,000 Microsoft Copilot licenses and more than 20,000 of our people have now completed at least one course in our data and AI academy.

As we look ahead to Connected Future 30, the Board and I are confident Telstra has the right strategy to remain a leader as technologies and connectivity continue to evolve. As with the Postmaster General's department, Telecom and then Telstra, one of our enduring strengths has been leading and adapting as technologies change. We have transformed the connectivity Australians rely on several times over with the unwavering purpose of building a connected future so everyone can thrive. Technology and connectivity are transforming once again. Customers' needs are changing. Connectivity is becoming increasingly critical to everyday life and new technologies are driving the demand for our network even higher. Connected Future 30 is about innovating and adapting to remain a leader in a rapidly changing environment. You will see us double down on connectivity, radically innovate in the core of our business and step up our focus on being efficient and competitive. As we do that, our commitment to operate responsibly and sustainably remains, including our environmental commitments.

Earlier, I mentioned some changes to our remuneration structure. These are aligned with the focused delivery of our new strategy and how we best create enterprise value, which is in the interest of all our stakeholders, particularly shareholders. A key part of this is disciplined capital management. The new remuneration structure is designed to recognize and reward that discipline while continuing to do the same for further improvements in customer experience and reputation.

Connected Future 30 will also see us play an even bigger role in Australia's digital future. Vicki spoke recently at the National Press Club of Australia about the role that connectivity will play in Australia's future prosperity. She called for a shared national vision for Australia's digital future, and this is a call the Board strongly supports. We want to partner with government to develop that shared vision and the policy and regulatory settings that will encourage the investment and innovation necessary to realize it.

So as we look back on T25 and move forward into our new strategy, the Board is pleased with the progress of the company. Our core business is strong. We've delivered recurring growth in underlying earnings and the dividend, and we have a highly capable leadership team and workforce. We've done a lot of hard work. And while there's more to do, we are strongly positioned to take advantages of the opportunities that lie ahead as demand for data and connectivity continues to grow. This is thanks to the disciplined focus of management and the entire team right across Telstra, and I'd like to thank them for their efforts.

And on behalf of the Board, I'd like to conclude by thanking you, our shareholders, for your continued investment in Telstra. Our focus remains on delivering value for our customers, for our people, for our shareholders and for our communities.

Thank you for listening, and I'll now pass across to Vicki.

Thank you, Craig, and good morning, everyone. I'm delighted to be here for my fourth AGM as CEO. I'll cover three things today: Telstra's overall business performance for FY '25, the investments we're making in Australia's digital future, expanding on some of Craig's comments and our Connected Future 30 strategy, including the role that connectivity plays for our country.

Turning now to Telstra's performance for the year. FY '25 was a strong year for Telstra as we continue to deliver for customers and shareholders. We celebrated the successful completion of our T25 strategy, delivered on our commitments to lift customer experience, build our reputation and drive sustainable growth and announced our Connected Future 30 strategy, which will see us radically innovate in the core connectivity business.

You can see a summary of our results on this slide. We delivered our fourth consecutive year of underlying growth, reflecting momentum across our business, strong cost control and disciplined capital management. Our reported growth in FY '25 was stronger than underlying growth because of significant one-off net costs totaling $715 million in the prior year. These costs discussed last year were mostly related to impairments and restructuring associated with the reset of Telstra Enterprise business. In 2025, reported financial performance included earnings before interest, taxes, depreciation and amortization or EBITDA, up 14% to $8.6 billion, profit up 31% to $2.3 billion, earnings per share up 34% to $0.189 and return on invested capital up 1.7 points to 8.5%.

Our underlying growth more accurately reflects our financial performance compared to the prior period, excluding significant one-off items and other adjustments. Underlying financial performance showed EBITDA up 4.6%, profit up 1.8%, cash earnings per share up 12% to $0.224 and return on invested capital up 0.2 points to 8.5%.

On the back of earnings growth, the Board resolved to pay a fully franked final dividend of $0.095 per share, bringing total dividends for the year to $0.19 and representing a 5.6% increase on the prior year.

Looking now at our results across the business. We grew underlying EBITDA across our mobile, fixed consumer and small business, fixed enterprise, InfraCo Fixed and Amplitel businesses. It has been a dynamic year in the mobile industry with 3G closure, new satellite technology, pricing changes and the migration of a significant volume of customers to our new digital stack. In the context of this, our mobile business has continued to perform well with EBITDA growth of $235 million. Mobile's growth was driven by higher average revenue per user and customers continuing to choose our network and the value it provides. Mobile services revenue grew by 3.5%.

Our fixed consumer and small business EBITDA grew by $109 million, reflecting average revenue per user growth and disciplined cost management. Pleasingly, our fixed enterprise EBITDA grew by $103 million, supported by decisive actions taken to reset this business and reduce cost. We remain committed to this reset with further changes announced in July to remove complexity and cost and set us up to deliver on our Connected Future 30 ambitions. Our international EBITDA declined by $96 million with reductions across Wholesale and Enterprise and Digicel Pacific. We have completed a strategic review of this business and are now taking action, including to reduce costs, double down on connectivity and exit the majority of our network applications and services products.

The wholesale and enterprise international results include restructuring costs associated with this. These actions, together with the continued demand for connectivity, mean the business is better positioned for the future. Our infrastructure businesses continue to grow, reflecting strong customer demand. Across the business, we delivered strongly on costs through simplifying our operations, reducing some roles and improving our productivity, partly offset by cost inflation. Core fixed costs decreased by 4.7% or $306 million in the year. Cumulatively, we reduced our core fixed costs by $428 million since FY '22.

As I reflect on T25, I'm pleased with the strong momentum and the foundation we've built. We set a high bar across our four T25 pillars to lift customer experience, extend our network leadership, deliver sustainable growth and value and to be the place our people want to work. Thanks to the dedication of the Telstra team, we have exceeded the majority of our scorecard metrics, including successfully delivering on our financial growth targets across underlying EBITDA, earnings per share, return on invested capital and cost out. We achieved our objectives, but not always as expected as a lot changed over the course of T25, including technology innovation and inflation. For this reason, I'm particularly proud of the way our team has adapted and delivered and the focus and discipline they have shown.

We have continued to invest in our mobile network, digital infrastructure and in bringing the latest technology to our customers. In FY '25, we reached 3 million square kilometers of mobile coverage, now reaching 99.7% of Australia's population. As Craig mentioned, we are investing an additional $800 million in our mobile network over four years within our business-as-usual CapEx. This is to deliver customers the most advanced, resilient and reliable mobile network in the country.

We have now completed 5,000 kilometers of our intercity fiber network. And in June, we reached a significant milestone with the switch on of our Sydney to Canberra coastal route. Our Canberra to Melbourne coastal route will go live this month and will progressively switch on more routes over the next 12 months. Also in June, we launched Australia's first satellite to mobile text messaging product, and we're seeing around 90,000 devices connect to our satellite to mobile service on average per day. And earlier this year, we announced a joint venture with Accenture, focused on accelerating our data and AI road map to reach our customer experience and network ambitions faster.

For customers, while there is always more to do, I am pleased to say we exceeded our T25 episode Net Promoter Score target, achieving a 15-point improvement over the last four years. Digitization has been a big contributor to this, and we're now within reach of completing the migration of our consumer customers to our new digital stack. As you would expect with a complex migration like this, some of the most challenging services come towards the end. We have now fully migrated more than 99.5% of our 7.7 million consumer customers, and we are working with the remaining just under 30,000 to manage their migration as smoothly as possible.

We know cybersecurity remains a concern for our customers and scammers are evolving fast. We're evolving to and investing to help protect our customers and make the digital world safer. This includes expanding our scam indicator partnership with the Commonwealth Bank to include fraud indicator, the introduction of scam protect to alert mobile customers to suspicious incoming calls and our cleaner pipes work, which continues to block millions of scam calls, text and e-mails from reaching our customers.

As Craig mentioned, we play a critical role in delivering the Triple Zero service for all Australians. We have been answering and connecting emergency calls since 1961 as the designated emergency call person, which means a Telstra team member answers first when someone calls Triple Zero for help before they are transferred to emergency services for response. We understand how critical this service is, and it is managed with a high level of discipline. Our team members answer around 32,000 emergency calls each day and the platform we use to deliver this service is very resilient and reliable.

It's important to differentiate between the Triple Zero contact center we operate on behalf of the Australian government and the networks which carry Triple Zero calls to the contact center. No network is infallible and outages can occur due to a range of factors, including severe weather, power loss, technical faults and planned upgrades. Our focus is on minimizing the risk of disruptions, being quick to communicate when they do occur and resolving issues as quickly as possible. We continue to focus on the reliability of the Triple Zero service and the resilience of our own networks. We're always looking at what we can learn to improve our own systems and processes, and we are working with government, regulators and the broader industry to strengthen the resilience of Australia's emergency call ecosystem.

Turning to guidance for FY '26. You can see on the slide the ranges along with the conditions upon which we have provided them. We've reflected the metrics we outlined at our May Investor Day as we focus on driving cash earnings as part of our strategy to create value. Underlying EBITDA has been replaced by underlying EBITDA after lease amortization or EBITDAaL, reflecting a broader measure of costs in our business. Our FY '26 guidance range is $8.15 billion to $8.45 billion.

We've introduce EBIT cash, which is made up of underlying EBITDAaL, business-as-usual CapEx and spectrum amortization. We are guiding on this in FY '26, which we believe is aligned with growing shareholder value and drives management focus on all of these costs. Our FY '26 cash EBIT is expected to be between $4.55 billion and $4.75 billion. This is equivalent to growth of between 5.5% and 10% on FY '25, demonstrating the cash generation of our operating business. Business as usual CapEx of $3.2 billion to $3.5 billion further demonstrates our disciplined approach to CapEx. Strategic investment is expected to be between $0.3 billion and $0.5 billion in FY '26, reflecting the continued rollout of our intercity fiber network project.

As I look ahead now to the future, there's a lot that gives me confidence. In addition to our incredible team of passionate people across Telstra, trends indicate that demand for connectivity will only grow. Our core connectivity business is strong with a unique set of competitive advantages that mean we are well placed to lead through this next period of technological change. And we have established a strong track record of disciplined delivery through T22 and T25. This has laid the foundation for our Connected Future 30 strategy, which will see us adapt and lead to shape the future of connectivity. Our ambition is to be the #1 choice for connectivity in Australia and to continue delivering on our purpose to build a connected future so that everyone can thrive.

We have three goals to help us achieve that, to lead in how we anticipate and deliver on the connectivity needs of our customers, to build and operate Australia's leading network and reinvent how we capture value from it and to be Australia's leading digital infrastructure provider. We're also focused on continuing to deliver value for our shareholders, importantly, through our core business cash flows and also through active portfolio and investment management and disciplined capital management. Through the delivery of this strategy, I believe we will play an even larger role in Australia's digital future and the future prosperity of the country.

As Craig mentioned, I spoke recently at the National Press Club about working with government to help create the right environment for investment so we can continue to deliver for Australia and for our shareholders. I'd like to thank the Telstra team for the discipline and focus that they have shown over FY '25 and throughout our T25 strategy. We simply can't produce strong results for our shareholders without delivering for customers, and our amazing team are fundamental to that. Thank you.

Thank you, Vicki. We'll now move to the formal part of the meeting. The items of business are now being shown on the screen. Nathan outlined at the start of the meeting how you can ask a question and vote. Shareholders participating online may also submit questions through the online portal. As I mentioned earlier, voting on items 3 to 5 is being conducted by poll. Mr. Chris Healy of MUFG Corporate Markets, Telstra's share registry, is acting as returning officer in relation to the poll. We've received proxies from over 11,400 shareholders and direct votes from over 9,900 shareholders. When we come to an item, we will display on the screen the proxy and direct votes recorded for and against that resolution. The four numbers include proxies received and available to be voted by the Chair of the meeting.

I'll now turn to Item 2 on today's agenda, which is to discuss the company's financial statements and reports for the year ended 30 June 2025. This item provides shareholders with the opportunity to ask questions about our 2025 financial statements and reports as well as the business, operations and management of Telstra. You can also ask questions of our auditor, Deloitte. An important reminder, the purpose of this item is to allow shareholders to ask questions about the performance of the company and not to address individual customer service queries. If you have a question about a customer service issue and you would like to address that issue now, we have high-quality customer service people in the room who are ready to assist you. Customer-related queries received online will also be responded to by our customer service team.

If a topic has already been addressed or questions are repeated, I won't cover them a second time. This will ensure we make the most of our time together today. So shareholders in the room, I invite you to move to a microphone to ask a question. For shareholders viewing the webcast online, please submit your questions through the online portal. To ensure there is an even spread of questions from shareholders in the room and online, I will rotate between the two. To allow shareholders in the room, time to move to the microphone, we'll begin with online questions if we have any. Otherwise, Nathan will begin in the room.

Over to you, Nathan.

We have no online questions. So we'll start with a question from a microphone. We can go with microphone #1 down here.

Good morning, Chair. I'd like to introduce Mr. Mike Robey from the Australian Shareholders' Association.

Good morning, everybody. My name is Mike Robey as stated. I'm a volunteer monitor for the Shareholders' Association, which is an association that stands up for retail shareholders. I hold approximately 17.5 million proxies or about 84 million in shares today. May I first start by thanking Ms. Brady and her team for what has been a very good year for our shareholders, in particular, for keeping Telstra out of trouble, unlike its main competitor. And we particularly like the fact that the company has shed some of its outdated enterprise data services, which have well past their use by date, which is mentioned by the Chair and Vicki, I think, in her speech. And also that we have lost the distraction of a part ownership in Foxtel, which I'm sure occupied too much management time for too little return.

My first question really concerns profitable growth for Telstra. They're credible analysts, and by credible, I mean they don't actually sell network equipment. So they have no vested interest in their analysis. who have assessed that in developed countries like Australia, the demand for both mobile and fixed data is tapering and that by 2030, we'll be flatlining. In other words, growth that we've seen in the past in the data services in both mobile and fixed looks like it's actually going to reach saturation. It seems that customers or users can only stream so much TV at any one time. And in large part, they're doing what they need to do already. In addition, the report states that the current 4G and 5G speeds are entirely adequate for most of their users for the foreseeable future. So maybe we don't have to invest in 6G when that comes along.

Given that Telstra has reverted to being a focused network company, rather like a utility, if you'll pardon the use of the word because effectively, that's, I think, what it's become now with Vicki's very sensible shrinking of some of the services. Where are the growth opportunities for Telstra then? Customers don't apparently need greater speed. They apparently don't need more data, and they're satisfied with their current usage. So will Telstra look to, for example, buying into less developed countries such as the Digicel acquisition in order to actually buy into countries that still have some growth runway or basically retire some debt? That's my question.

Thank you, Mr. Robey, and thank you for all you do for the Australian Shareholders' Association. That's a very important association, and we enjoy interacting with you.

It's a very good question. So this is a question that, in a sense, underlies our approach to our new strategy, Connected Future 30. It is true that growth rates in data have been very high over the last five years or so, and there may be some tapering off of them. But we do believe that the technologies around AI and AI indeed itself are going to lead to dramatic and significant growth in the use of our network, and that will foster ongoing growth in data. We do believe it will create new opportunities to use devices that perhaps people don't even foresee today. So we do think there's strong growth in the network.

And part of the Connected Future 30 strategy is network as a product. And that's about using advances in 5G, and there's further advances to come in that technology to further differentiate the service we add or provide to our customers, both in consumer business and the enterprise space, which, again, we think will provide opportunities for growth.

So part of the reason we're so confident and comfortable in very much doubling down on the core, if you like, and on connectivity because of the opportunities we think we continue to see in growing the business in that area and delivering value for shareholders.

Chair, I'd like to introduce Mr. Ian Hamilton.

Good morning. There's a couple of points I'd like to point out that things that you should be aware of, but probably aren't. With the standard issue house telephone model number, T1000S, T1000C designed and manufactured in Australia for Telstra, the handpiece does not properly fit into the main body of the phone. So with elderly people in bed or someone recovering, the weight of the flexible phone cord can just dislodge the handpiece off the phone. So they think it's on but it isn't. And with the old-fashioned phones gravity used to feed the handpiece onto the phone. Now the weight of the cord makes the phone off. It needs to be redesigned so that works properly.

The priority assist phone has the same problem. With this phone and with the normal phone service that people taking even though they were happy with the copper wire service for the last 70 years, the power disruption, the service does not work. The priority assist phone has a recharge battery, but that charge just last 12 hours. So say the power goes off at 3 p.m. a.m., the phone is dead. Is there any solution to that?

With printed phone books, I tried to get one, two years ago, and I went through the details phone number address, then it said e-mail, which I didn't have one. Therefore, no phone book. A phone books still available. Now Telstra has removed all public telephones from the platforms of the Melbourne underground railway platforms and also from many suburban shopping centers. What is the reason for this? And they are public assets that Telstra took control of when it was privatized and they're meant to maintain them and they're useful for emergencies. And with the AAA service breaking down, are there alternative telephone numbers to ring to directly contact people with the emergency services?

And the final question is, social media companies make a lot of money out of using your service. Are you able to get some more of that off them to help your profits?

Well, thank you, sir. You've got an extensive list of questions there, so I'll try to deal with them as best I can.

Regarding your comment on the various handsets, I'm not familiar with that, but they're important, very important points you've raised. So I'll commit to taking that on Board and reviewing that with Vicki and making sure if there are improvements we can make, we'll do that. I understand how important Priority Assist is to many Australians. We take that very seriously. So thank you for bringing that to my attention, sir.

On phone books, I understand that some are still printed and they're available. So perhaps we can speak to you after the meeting and let you know how you can take advantage of those books.

Public telephones are very important, and we've actually committed very seriously over time to improving their reliability and availability. That's a free service now that's made available by Telstra. Usually, they have free WiFi available to them. And we've also done work recently to improve their resilience with backup and so forth. So that is very important to us. I think I've covered most of your points, sir.

On Triple Zero, as Vicki and I have both said, that's something we take very seriously. Power outages are a matter of importance and are critically significant. It's a good point that you raise. It's probably the biggest risk we face with our network. We have more than 160,000 power outages a year. 90% of those outages don't impact our service because of the backup batteries and that we provide at mobile towers and the like. But that is a management -- that is an issue that we have to keep managing going forward, and it's something that we're very focused on. So thank you for your questions.

More, Craig, around social media.

I, sorry, sir. Well, that's a good suggestion. We'd certainly like to be able to do that. It's a competitive market. We compete for their business, and that's the way the market works.

We'll take our next question back from microphone one again.

Chair, I would like to introduce Dr. David Karoly, who comes as a proxy to the meeting.

Thank you very much. And what I'd like to do is, first of all address a topic that hasn't been talked about very much, but appears to be very important for Telstra, and that is the important emission reductions as part of the sustainability objectives that are reported in the annual report for 2025, showing ongoing decreases in emissions by Telstra operations. And it's very important to see that because what has been happening elsewhere in the world and in Australia has been growth in greenhouse gas emissions associated with operational activities. And it's really important that Telstra has been committed to current and future reductions in greenhouse gas emissions.

I should introduce myself. My name is David Karoly. I'm an Honorary Professor at the University of Melbourne. I'm a climate scientist who's been very much involved in looking at reductions in greenhouse gas emissions and the impacts of global warming in Australia and elsewhere in the world. I was the leader of the Earth Systems and Climate Change Hub in the Australian government's National Environmental Science Program, a lead author in the assessment reports of the Intergovernmental Panel on Climate Change for more than 20 years and have also been a former member of the Australian government's Climate Change Authority.

The question that I want to put today will come after a little bit more preamble, but in particular, focuses on the apparent disconnect between Telstra's sustainability objectives and Telstra's membership of the Business Council of Australia. The world's leading bodies on climate change science assessment, including the intergovernmental panel on climate change and on emissions reductions needed to meet the Paris Agreement, such as the International Energy Agency state that to limit global warming, consistent with the Paris Agreement agreed in 2015 to limit global warming to a maximum of 1.5 degrees requires no further expansion in fossil fuel use, not only in Australia but around the world.

At current rates of increases in greenhouse gas emissions, we have less than three years before globally, we exceed the emissions reductions consistent with a carbon budget that will breach the target of 1.5 degrees. We need faster action to limit global warming, not only in Australia but around the world. And it is around the world that new record high emissions were reached last year in 2024. It is clear that to meet the Paris Agreement targets, we need to have no new investment in increasing extraction of fossil fuels from new projects, not only in Australia, but elsewhere in the world. The Business Council of Australia has supported ongoing extraction of fossil gas from the North West Shelf and other activities to expand the extraction of fossil gas. That appears to be inconsistent with the objectives under sustainability for Telstra.

So my question then is, Telstra has said that it has -- is committed to emission reductions consistent with the Paris Agreement. And that appears to be that limiting global warming to 1.5 degrees is one of the objectives of the Paris Agreement. But the Business Council of Australia, on which Telstra sits on the Board, has a very different objective, which is to support ongoing extraction of fossil fuels. So how does Telstra honor its commitment to reduce its emissions while still being a member of the Board of the Business Council of Australia.

Great. Thank you, sir, for that important question. So firstly, on the Business Council of Australia, obviously, this is not a Business Council Australia meeting. But we think it's important for shareholders and for the company for large businesses in Australia to have a voice on critical public policy issues particularly as we work through the productivity debate in our country at the moment, which is so important to our future prosperity. So we think it's very important that we participate in that debate through the Business Council of Australia. The Business Council of Australia makes comments on a whole range of issues, as you would know, sir. Some of those we will support. Some of those will have a different view and some of those we simply won't take a view because we don't think we're in a position to give a view.

At Telstra, we believe we have a very proud record on the environment and the commitments that you talked about. We believe the best way we can deliver to Australia's commitment through the targets you mentioned is by actions in our own right. Our targets for Scope 1 and 2 emissions, as you know, are very meaningful at 70% reduction by 2030, which is consistent with the 1.5-degree Celsius limit that you talked about around the world. I think we were one of the first large companies to commit to a Scope 3 emissions target of 50% by 2030.

Both those targets are included in the remuneration scorecard for Vicki and her team, which reinforces how important they are to Vicki and her team and the Board. And you'd also probably know, sir, that as a part of our commitment to the country's shift to renewable energy, we've also now committed to, I think it's seven power purchase agreements that support investment of around $1.6 billion in wind and solar power. And by doing that, we've got a commitment by the end of this calendar year to deliver renewable power through those arrangements that's equivalent to 100% of our own consumption.

You'll also probably note, sir, that in our annual report, we've got very extensive climate reporting. That's consistent with the international accounting standard that was introduced some years ago. Obviously, we've got a new Australian accounting standard, which will comply within the future. We regularly and I meet with investors and other stakeholders around the country, we regularly get complemented on the extent and detailed disclosure in that document. This year, in addition to the climate targets, we've also included further information on nature and biodiversity, and we've done a deep review on water usage and how we can commit to that.

So I suspect we're going to agree to disagree. I understand your point on the Business Council of Australia, but we think we have a very enviable record on climate. We're very committed to it, and we continue to do so. Thank you, sir.

Take our next question online, and this question comes from [ Joe Alvaro ].

The question is, Telstra's charges fees for paper bills with minimal exceptions, which appear to be profit-making exercise. Many organizations don't charge for paper bills. Has the Board reviewed these fees under consumer protection laws given their potential illegality? How does Telstra adept digital exclusion, especially for vulnerable groups and others who prefer paper bills? With limited exception, these customers face discrimination and fraud risks. What measures protect and support them? Shouldn't these unfair fees be scrapped?

Thank you, sir, for your question. So just on paper bills, I think we charge $2.50 per bill, and that's because it's more costly for us to deliver bills in that form. It's not right to say there are minimal exceptions. We provide exceptions for a whole range of different groups like pensioners and people in more difficult financial positions. So I think around 70% of the paper bills that we provide are fact-free and not charged for.

On digital access, that's a really important point that you've raised. We're very committed to it. It's a key plank of our sustainability strategy. And Vicki, do you want to make any comments on the sorts of procedures or approaches we have in place around digital access?

Sure. Yes, I can make some comments on that because I think it is -- the point raised is an incredibly important one. And when it comes to digital access to being able to have access to those services, it is something we take as a very important and key focus areas. In fact, each year, we've been supporting the Australian Digital Inclusion Index now over an extended period of time because we made the decision over a decade ago now, I believe, that actually to be able to support digital inclusion, we needed a good fact base. So we've supported that research. The next round of that will actually be out in November. in the coming weeks. And out of that, we look at all elements. So access plays a role, affordability plays a role and digital ability plays a role in closing that digital gap, and we actually have programs and support a range of activities across all of those to be able to help do our part to ensure we reduce that gap.

Questions online. This question is again from Joe Alvaro. Given Telstra's ongoing high volume of complaints, as highlighted by the Telecommunication Industry Ombudsman, ACMA and online reviews, does the Board acknowledge that competent frontline staff are key to driving improvements? What concrete steps is Telstra taking to better support and train staff to reduce complaints and enhance the customer experience? How is the company addressing root causes like billing disputes and service and what measurable targets or time lines ensure real progress?

Thank you again for that question, sir. So improving the customer experience has been an absolute core focus of the company since we first rolled out our commitments under T22 and then T25. And that's involved a whole range of initiatives like the movement to a new digital stack, the move from 800 to 20 plans, so much more simplified and relevant plans for our consumers. We've brought our -- most of our call centers back onshore. We've taken ownership of all our retail stores. We're very committed to training our people. We've actually introduced some AI support that further improves that capacity to deliver our customer experience.

And as I mentioned in my opening remarks, again, while there's always more to do, as Vicki commented on, the number of complaints to the external ombudsman has reduced by 70% since FY '21. Our Net Promoter Scores, which is our way of measuring the customer experience has significantly improved over the period since T22 and T25. So we take customer experience very seriously. It's also included in the targets on which we measure management's performance and the remuneration. So if you look at the scorecard for FY '26, which is how we'll measure Vicki and her team's performance and the broader organization, there are clear targets on episode NPS and also strategic NPS. So we take it very seriously. We're not perfect. There's more work to be done, but we've made very considerable progress.

Question from microphone #1.

Sorry about that, everyone.

Chair, Mr. Donald Walker has a question for you.

My topic is text and SMS messages. I have a prepaid plan for 180 days and have 200 text messages. However, one text message can be up to three or more SMS messages, and it does not take while before all the text are used up. I discovered that a standard SMS has 160 characters and increased in multiple parts, each being 153 characters. Unicore SMS has a limit of 70 characters limit increase in multiple parts of 67 characters. It only needs one technical symbol to be added when it becomes a unicore message. And one letter, yes or no is a standard SMS. This is done when you are asked to confirm an appointment. The cost is the same for character SMS as is for 160 character SMS.

Question. Why does Telstra not put information on SMS and character used in your advertising? Question two, please, can you tell me where in the annual report under what heading do you show revenue from SMS messages?

Thank you, Mr. Walker. So on that second question, obviously, our disclosures in our annual report on revenue are consistent with what's required by law. There's a whole range of different revenues that we generate from all the services we operate in Australia. So it's not appropriate for us to disclose every line item. but we disclose what we're required to by the accounting standards.

Under your point on broader SMS messages, I'm sorry, sir, I didn't completely understand the point you were making.

I'll go over again. The SMS messages, there's the standard SMS, you have 160 characters, right?

Right.

Then after that split up into 153 characters and that's what happens. And one SMS, one text can be three or four or five, it could be as many as you might.

Yes.

And the cost goes up. It's -- when you split it up, you've got to say the first SMS is $0.60. The second is $0.60. The third is $0.60 and the cost goes right up. And you're looking at millions. How many -- there's 20 million or 30 million text today. How is that -- how much is that costing? How much revenue you get out of that?

Well, we -- as I understand it, we offer unlimited text messaging to our customers. So it's part of a bundled service that we provide in our plans. So that's just a functional utility that you get if you're a Telstra customer.

But I have a cash for 180 days. But yes, I've seen where you go. We have Telstra we have plans. Now that is costed. The text messages will be costed as part of that plan. Am I right? As part of a plan, you've got to put the cost of an estimated amount of text that customer is going to use. Is it right?

So, again, as I understand it, our plans provide unlimited text messaging. Years and years ago, you used to pay for a text message. So it's a cost we bear and it's a level of functionality or utility that we provide in our plans.

So you're saying it's a cost you bear?

Yes.

It worth millions.

Well, there's a range of benefits we provide to Telstra customers. I mean that's the benefit of being a Telstra customer. We've also introduced, as Vicki mentioned in her commentary, for Telstra-branded plans, satellite text messaging services when you're out of our normal network area, which is an important benefit to customers. So it's just a decision we make in the marketing capacity about what we think is appropriate to provide in our plans, and that's a decision management make from time to time and a whole range of things.

What I've got is I pay $200, right? It could be finished by -- if it's not careful to having text to you. But I thought you made money out of that. And I thought you made a lot of money out of the text plans.

No, we don't, sir. But I'm very happy if someone -- if you would like to speak to someone from our customer service team, they can perhaps help you better understand your plan and how that works for you. Thank you for your question, Mr. Walker.

Microphone one.

Chair, I would like to introduce Ms. Solaye Snider with a question.

Hello. My name is Solaye Snider, and I'm a campaigner at Green Peace Australia Pacific. Green Peace is here today because we think Telstra's investors and shareholders deserve to know about Telstra's fossil fuel lobbying via the Business Council of Australia, of which your CEO sits on the Board.

We're concerned that Telstra is dodging its responsibilities via its industry association policy by not taking a clear position on fossil fuels and gas expansion. And that by refusing to do that, it's taken as an endorsement of the BCA's lobbying on your behalf. We don't believe you have to agree with everything that the BCA does, but you do need to take a position one way or the other because your industry association policy requires you to be engaging with BCA's leadership if a misalignment does exist. So by not taking a position, it's received by the public and the government as an endorsement of the BCA's advocacy for further gas expansion.

So I want to ask again quite directly, does Telstra accept the science which states that support for new gas projects is incompatible with the goals of the Paris Agreement, which you say you're committed to?

Thank you for your question. And I don't want to go into detail and repeat my answer from the earlier question. But as I said before, there will be some issues on the BCA that we support, some issues we have different views on, some issues we don't have a view on. In our view, the greatest contribution we can make to the environment and a better climate outcome in Australia is by actions and not words. And the actions that we're taking on climate through our reduction in Scope 1 and 2 emissions, Scope 3 emissions rather, our action on investing in power purchase agreements, which promote greater renewable energy equivalent to 100% of our energy consumption by the end of this year and so forth.

In our view, the best way for us to deliver an improved environmental outcome for the country. And I think Telstra shareholders have every right to be proud in the environmental record that we have as a company.

Thank you. Yes. I'd like to add that in 2019, Telstra actually did threaten to quit the BCA because of its inconsistent climate positions. And in that process, he created this industry association policy, which requires you to regularly review your memberships and note when a misalignment exists, but it's not possible to note a misalignment one way or the other if you won't take a position. So that seems to us that it's dodging the responsibilities of your own policy. So we're looking for a really clear answer as to what your position is.

As I said, we're very committed to the environment. We believe the best approach we can act or take is by deeds and actions, and that's what we're doing. I don't think I can add to the question. I suspect you and I are not going to disagree. As I said, I think shareholders in the room and watching online have every reason to be proud in our environmental record.

We'll take our next question online, and this question is from Graham Hunter. Are you aware that your customer service team are suggesting to customers who have an issue with losing discounts following the introduction of your new billing system that instead of Telstra solving the problem, they should go to another provider or the ombudsman.

So why don't talk about the goal of what we're seeking to achieve with that change because I think it's an important question. So for some years now, we have been shifting to a new technology system that underpins our plans. And that's a very important change for a whole series of reasons. It improves the experience for customers measurably. In fact, I think the Net Promoter Score, which is again a technical term for the way we measure our customer experience, they're at least 50% higher under that new technology stack. That new technology stack to operate effectively means we've had to move some of our old plans onto our new plans. We understand that for some customers, that's not a change that they would prefer to make. Some of these plans are more than 20 years old. And again, to move to the new stack, we need to make those changes. We've worked as carefully and cooperatively as we can with customers to make that change. If you've got any particular concerns about your personal circumstances, sir, we will be very keen to chase that up with you.

I'd also just make the point that we are also very committed to cybersecurity. And it is difficult to deliver the level of protection we would like around cybersecurity if we maintain legacy systems. They're just harder to protect. So part of the reason for the change to new systems is it also improves our cybersecurity protection for all of our customers.

We'll take another question from microphone #1.

Chair, I would like to introduce Mr. James Alexander, who has a question.

Thank you. Good morning, everybody, and thank you for your patience so far. My name is James, and I'm from Sustainable Investment Exchange. So we work with institutional investors to engage Australian companies about ESG issues. And my question is for the Chair of the Risk and Sustainability Committee, Maxine Brenner.

So there's a growing expectation from institutional investors for greater transparency in corporate lobbying and promoting lobbying aligned with the goals of the Paris Agreement. And that includes acting when a trade association is misaligned with that because the impacts on climate change are increasingly a risk to their investment portfolios because they're so diversified across their investments. So a recent legal opinion by the Environmental Defenders Office found that companies face increasing risks from making net zero commitments and then lobbying directly or indirectly through industry associations for policies that are inconsistent with those commitments, including for misleading and deceptive conduct under the Corporations Act.

So my question is, has the company considered the legal and reputational risks of being associated with industry association positions on climate change policy that are different to Telstra's own ones? And if so, do you consider them financially material?

Thank you, sir. I'd ask that you direct questions through the Chair of the meeting. I deeply respect your point of view, and I understand the comment you're making. But in my view, you're just making the same comment as important as it is to you, to the other two people that have asked the same question. I'm not going to repeat our answer. We're very committed to the environment. We've demonstrated that with actions. We have a great record on the environment. As I said, I think our shareholders can be proud of that. And I don't intend to take any more questions on this topic. They now addressed 3x essentially the same question. I think everyone else needs an opportunity to use the meeting for their turn as well. So thank you, sir.

We've got a microphone three on the side of the room.

Chair, I would like to introduce Mr. [ Peter Jures ], who has a question.

First of all, thank you to Vicki, the Board and staff for the great work you've done in the last 12 months. Mine is a really mundane question. I live on the 28th floor of a high-rise building surrounded by an increasing number of even taller buildings. The reception on my cheap and nasty phone is now nonexistent. So it's not functional. My question is, is this an increasingly reported problem in hugely built-up areas? Or I've had a lot of help and cooperation from the local Telstra shop. Thank you very much. But is this more widely reported problem? And is there a solution?

Thank you, sir, for your question. I mean one solution indoor, of course, is to use WiFi on your phone. If you do have an nbn connection. Okay, I understand that.

So, Vicki, do you want to comment on that? It's an important issue. And obviously, we want you to have the best possible service that you can, sir. So, Vicki, do you want to just touch on that point?

Yes. No, thank you. It is an issue we see across particularly CBDs. If I look at Melbourne and Sydney, in particular, wherever there's big construction going on, the landscape can change pretty fast. And as you'd appreciate with mobile signals, once you have structures in between, it can interfere with the signal quality that you receive in your specific location. So I'm very pleased to hear the feedback on our store teams. Very happy for our team that's in the room today to also connect with you and just see if there are any other options we can come up with.

Definitely, in-building coverage for us, it is a specific focus, and I'm looking at my Head of Networks in the front row, where we look at our outdoor coverage, but we always -- we also look at indoor coverage. And so constantly looking at innovations and systems we can deploy. The 28th floor can be tricky, to be honest, because, obviously, as you're propagating from towers down closer to the ground, getting that to work can be hard. But please, we would love to follow up and see if there's any other options we can find today. Thank you.

Thanks, Vicki.

Our next question from microphone one again.

Thank you. Chair, I would like to introduce [ Mr. Joe Rulewich ].

My question concerns Telstra's subsidiary, Digicel Pacific and your plans for the ongoing growth of that business. I think just as in Australia, operating in Pacific states requires a degree of social license. We've seen what's happened with some competitors of Telstra in Australia in relation to Triple Zero. Telecommunications providers hold a special place in terms of supporting emergency response. So I think that Digicel Pacific has done some fantastic work through the Digicel Foundation to support communities, including, I think it was in 2023 following the hurricanes in Vanuatu, supporting calls from climate activists for climate justice. Of course, you also require the kind of support of governments in the Pacific to operate, especially being a telecommunications provider and that link with the state.

Earlier this year, when Woodside's North West Shelf project was up for approval, the Climate Change Minister of Vanuatu said that to approve it would be an intentionally wrongful act. And as we've heard earlier today, Telstra's membership of the Business Council of Australia is problematic in the sense that the Business Council of Australia explicitly wrote an op-ed calling for the approval of the North West Shelf.

My question is not in relation to your industry policy or your environment policy. My question is, does this present a risk to the social license for the operation of Digicel Pacific for the company to be lobbying for the expansion of fossil fuels, which Vanuatu considers an intentionally wrongful act?

Thank you for your question, sir. I'll keep my answer brief. I know it's a real issue for Pacific Islands. And obviously, when we are in discussions with governments like that, we point to our very credible record in the environment.

Next question, please.

Questions on this item on the floor or online. So, Craig, that concludes the question-and-answer session for this item.

Great. Thank you, Nathan.

Just correction. I believe we have one more question on microphone #3.

Chair, I would like to introduce [ Mr. Howard Pascoe ].

God morning. Chair and the Board, congratulations on your annual report. On a [indiscernible] question. I was here about 10 years ago, and you made a comment that the 100,000 plus of the MCG after the grand final, if most people attend with their mobile phone, if they all ran straight after the MCG game is finished, it's impossible to provide the service. I've noticed at the moment that it's fantastic. If everyone uses their mobile phone, you can handle it. I've been to Optus Stadium in Perth, 60,000. How is the technology -- how have you advanced the technology where that happens? I'd love to know.

Yes. Thank you for your question, Mr. Pascoe. And as a big AFL fan, I'm also interested in that topic. And must admit to using my phone quite a bit after the 2023 Grand Final win by Collingwood. Sorry to admit I'm a Collingwood supporter. There has been further advances in technologies over the last 10 years in that space that is an important part of our value proposition to our customers.

Vicki, do you want to touch on that a bit?

No, thank you for the feedback. It's great to hear that. I also heard great feedback this year on performance inside the MCG as the Grand Final was underway. So look, we do, again, as a little bit like the earlier answer, we're constantly looking at how do we innovate, how do we deploy, particularly in a stadium environment, we go in and deploy special solutions in that environment that use absolutely maximize the spectrum that we've got access to. And in that enclosed environment, our teams have been incredibly innovative because customer demand was clear.

People nowadays don't just want to call or send text. They want to upload video. They want to download content. And so it is a real credit to our networks team, the level of innovation and frankly, how determined they have been to try and find solutions for big events at stadiums. And so it's that constant innovation, keeping right at the forefront of global changes, along with our innovation on the ground to figure out ways to deliver that. So thank you for your feedback.

Thanks, Vicki.

Our next question will be from microphone #1.

Thank you. Chair, I would like to introduce [ Mr. Bobby Savitt ] with a question.

Good morning, Chair.

Good morning, sir.

On the 22nd of August this year, Telstra's Group Company Secretary confirmed in writing that undeclared high-value corporate hospitality was provided to senior public sector executives during a live government tender, a contract that Telstra subsequently won. That confirmation relates to only two high-value corporate events. However, information before the Board indicates that further high-valued hospitality was extended to decision-makers over several years involving multiple senior Telstra executives during live procurement periods and that many of those benefits do not appear to have been properly declared.

My question is straightforward. Will the Board now confirm whether this conduct extended beyond the two events already confirmed and commit to commissioning an independent external review of all corporate hospitality extended to public sector decision-makers during active tender periods to ensure full accountability to shareholders to provide public visibility to the findings and to review or if appropriate, repay any commercial benefits that may have arisen because without that assurance, shareholders are left uncertain whether Telstra's disclosures remain complete, accurate and consistent with directors' duties under the Corporations Act.

Thank you for your question, sir, and thank you for writing to the Board separately raising your concerns on this matter. We take governance very seriously at Telstra. And I just want to share with the shareholders in the room and online how we address the matter that you raised with us and how consistent that is with concerns regarding the way we approach business.

So on receiving your letter, that matter was immediately referred to a whistleblower committee that we have in Telstra. That's separate to line management. It's chaired by our Company Secretary, Craig Emery. That committee asked our investigations team, which is also separate to line management and reports directly to our Chief Risk Officer to take -- undertake an investigation of the incident that you referred to. My understanding is the matter you referred to occurred in 2018. It related to the purchase of two tickets to the court of final at the Australian Open. Our review by the investigations team found that those tickets were procured through the normal process. but the hospitality was not declared in the right register as it should have been, and that's a failing on our part. We disclosed that fact to the client concerned. We have further improved and strengthened our internal controls in this area since 2018. And as we've demonstrated by the review that we've undertaken, we remain committed to good corporate governance.

Go to microphone #2 for our next question.

Chair, I'd like to introduce [ Ms. Annabelle Alba ].

Good morning, everyone, all members of the Board present. And I would just like to extend my thanks to all of you for the work that you've done.

And my question, it really is not a question. It's more of a feedback in relation to our system. It's just that when Telstra change to the new system, right? I had a problem with the customer service in there because I had a credit in the old system, and it wasn't taken into account when it shifted to the new system. And my view was that how come Telstra didn't consider that in the first instance when transitioning to a new system to take into account those payments that were made in the old system to be transported to the new system. It took four months for that money to be transferred to my account. And in the meantime, Telstra was still direct debiting my account for all my bills that's coming in, right? That's the first experience I've had.

The second experience I've had, I had transferred from the FTTP to the 5G network, which is a high, what you call this upload and...

Yes, greater speed.

Yes, speed. So, thank you.

No, not at all.

Run it. And what happened was my printer and my telephone connection in my bedroom did not -- what you call this, did not -- it's not talking to the modem that was given, the new one that was given to me. And three hours, I was in the customer service chatting because there is no telephone connection that I could get to, three hours on the phone doing SMS chatting by MSS. And I can tell you, definitely, it's too hard to communicate by SMS if I've got an issue in my system, right?

So Anyway, let me just -- I'm just going to take a few minutes because I was so upset with that, right? My printer was disconnected. My phone in my bedroom was disconnected. And no one can give me any advice on what happened. And one person asked me to access the modem and change it to the 2G and make it a split to be a 2G and a 5G, right? And I don't understand all the ways, but I just did what she said, but it didn't work. So the next time, the next operator that did the shift, there was a change of operators, and it's the same question. It's the same thing that I put forward to them. And it's the same explanation that I was given.

My view is that with this type of issues wherein you need to talk to somebody face-to-face or by phone that it should be straight away assess the problem, straight away, refer it to the higher level that can put or fix my problem. But up to this point, I still haven't got any, any response as to what happened to my printer and my telephone. That's all. I thought I'm just going to give you some form of suggestion that anything, any issue with regards to the kind of issue should be referred to somebody higher up and not sit on that customer call center line.

Okay. Thank you, Madam. Thank you for your question. So just firstly, can I say sorry for the experience on the billing credit that shouldn't have happened. So I apologize for that.

Regarding your broader service, we do have experts in the room today who can sit down with you, and we'll be pleased to do so to see whether they can solve your problem. Under our call center arrangements, you can arrange for a call back, so someone can bring you back and take the time to work through your matter. I appreciate that hasn't worked for you. So why don't I suggest today we get someone to meet with you after the meeting and help you out as best we can. I understand it's frustrating.

Thank you.

The next question will be from microphone #1.

Chair, I would like to introduce Mr. Simon Livson.

I just had a thumb through the annual report, and I can't find a 10-year summary of the finances of the company. Could you explain why not? And also a 10-year graph of the share price would be good, too. So we could see how far behind we are to what we paid for them 10 years ago.

And another thing I'd like to say is I just heard on the radio the other day that Stephen Mayne is not very well. And I don't know whether we'll see him in annual meetings in the future. Pity, it's a good blog.

Thank you, sir. I'm sorry to hear Mr. Mayne's ill, and obviously, we extend our best wishes to him. I wasn't aware that we no longer disclose that 10-year information. So I'm happy to commit to including that again in the annual report. Thank you, sir.

Well, the share price, I understand that for people that have been in the stock for a long, long time, we'll have some issues with that. We're very much focused as a Board and a senior management team in delivering value to shareholders. The share price is one example of how that value comes through. As I said earlier in my comments, it's at a near nine-year high currently, and there's been a 34% increase in the share price over the last 12 months. So I appreciate your frustration, but I think the management and the Board are making good progress on delivering value to shareholders. Thank you, sir.

I believe this time, we have no more further questions in the room. So, Craig, that concludes the question session for this item.

Okay. Thank you, Nathan, and thank you for the shareholders who've taken the time to ask their questions this morning. So that means we have finalized our discussion of Item 2.

And next up is Item 3, director election and reelection. And to assist with the efficient conduct of the meeting, firstly, I'll deal together with the reelection of Eelco and the election of David.

And then as mentioned in my opening comments, I'll hand over to the Chair of the meeting to Elana Rubin to deal with my reelection. Elana is, of course, Chair of the Board's People and Remuneration Committee.

I'd now like to invite Eelco and David to each address the meeting, starting with Eelco. Thanks, Eelco.

Thank you, Craig. Good morning, ladies and gentlemen, fellow shareholders. It's a privilege to stand here today and ask for your support for my reelection to the Telstra Board. Over the past six years, I've seen how much this company means not only to you as shareholders, but also to our customers who rely on us every day and to our employees whose dedication makes everything possible.

I joined Telstra with more than 30 years of telecom experience, but what keeps me motivated is not the past, it's the future. Telstra is transforming itself to remain a leader in a changing world, and I'm proud to contribute to this transformation. My role is to listen, to challenge and above all, to serve with the overall goal of building a company that customers trust, that employees are proud of and that creates sustainable value for you.

If reelected, I promise to continue to give my very best. Thank you for your trust so far. It will be an honor to keep contributing to Telstra's future success. Thank you.

Thanks, Eelco. David, welcome. Good morning.

My name is David Lamont. Today, I seek your support as I stand for election to serve as a member of the Telstra Board of Directors. My professional qualifications and work experience are detailed in the Notice of Meeting, and I'm grateful for the opportunity to address you briefly today.

Since joining the Board on the 3rd of December 2024, it has been a pleasure to work with Vicki, her management team and my fellow directors, especially in the formation of the Connected Future 30 strategy. This strategy highlights the importance the telecommunications sector is to the success of Australia and the role of Telstra within that. Connectivity is a critical part of life and business and is becoming even more so. In this environment, I am acutely aware of the important role directors play in the stewardship and governance of your company.

Over my working life, I have gained significant senior executive experience across a diverse range of geographies and sectors. This has enabled me to form a broad perspective on strategy, operations, financial and risk management and a deep understanding of what drives a successful business. I have extensive expertise in the allocation of capital, delivering major capital works whilst also ensuring strong financial discipline and reward to shareholders. I believe these skills are complementary to those of the current Board and executive team.

My commitment is that I will use my values, experience and capabilities to help Telstra both manage its current assets and deliver on its Connected Future 30 strategy. in the interest of all stakeholders. I thank you again for your consideration and look forward to your support.

Thank you, Eelco, and thank you, David, for your addresses to the meeting. If you have any questions on Eelco's reelection or David's election, please go to the nearest microphone or submit your question online. The Board, other than Eelco and David in respect of their own reelection and election, recommends the reelection of Eelco and the election of David. The proxy and direct voting position for items 3A and 3C are now being shown on the screen.

We'll now move to any questions on this item. So over to you, Nathan.

We have no questions online.

Sorry, we have one question.

There is one question in the room from microphone #4.

Chair, I'd like to introduce Mr. Ian Hamilton.

Good morning again. What percentage of the votes have been cast and what percentage do you will be cast? So, in total, how many of the votes will be cast?

Yes. Thanks, Mr. Hamilton. My understanding is around 53% of the votes on the shareholder register have been cast.

[indiscernible] will be cast from the...

Well, the polls open for 10 minutes after the AGM, typically.

Rough estimate...

No, no, I don't think it will change much from 53%.

So that means half of all the people -- if it says 99%, that means half of it didn't vote for it.

Well, what it means is every shareholder has an opportunity to vote. Those that have chosen to vote, the outcomes are demonstrated on the screen. We can't force shareholders to vote.

But a non-vote is candidate is having passed.

We only record on the screen people that have actually voted. So there'll be four votes, there'll be no votes, and there'll be some shareholders who have allocated their voting rights, if you like, to the Chair. And in that instance, I've voted For. Thanks, Mr. Hamilton.

No further questions, Craig. So that concludes the question session for these items.

Okay. Thank you, Nathan. So we've now finalized our discussion on items 3A and 3C. As indicated in the Notice of Meeting, I intend to vote all available proxies in favor of Eelco's reelection and David's election. If you haven't already done so, please complete your voting card for items 3A and 3C now.

Before handing over to Elana for the item dealing with my reelection, I'd like to say a few words. Obviously, you know who I am, and I've already done a lot of talking, so I'll keep this short. However, it has been a great honor for me to be your Chair since 2023 and a director since 2016. It's a real privilege and responsibility to hold this role at a company that makes such an important contribution to Australia. And I feel very fortunate to have had the opportunity, particularly now as we embark on our Connected Future 30 strategy.

Over my time on the Board, I've seen this company change very significantly. and I'm proud of the progress we've made through the strong delivery of T22 and T25. As I mentioned earlier, we're now at another very significant moment in our company's history when technology and connectivity are transforming once again. Connected Future 30 is the right strategy to navigate this change. And given my history on the Board and more than 30 years of financial and corporate experience, I believe I can make a significant contribution to Telstra's future success. I remain committed to Telstra, and I'm excited about the role it will play in Australia's digital future. And with your support, it would be indeed a great honor for me to continue as to chair and continue to conserve you and our customers.

I'll now step away from the Chair and ask Elana to take over Chair of the meeting. Welcome, Elana.

Thank you, Craig, and good morning, ladies and gentlemen. Item 3b is to consider the reelection of Craig Dunn. Shareholders, if you have any questions on Craig's reelection, please come to your nearest microphone or submit your online question.

As Craig mentioned, he has been on the Board since 2016 and has been Chair since 2023. Craig is an outstanding Chair and the Board, other than Craig, fully supports and recommends his reelection. In recommending his reelection, the Board considered a number of factors, including Craig's strong performance, the skills, experience and leadership he provides to the Board and Telstra as we commenced execution of our Connected Future 30 strategy, the length of time he has served as Chair and as a Director and the importance of continuity on the Board. The Board believes that notwithstanding his period of service on the Board, Craig has retained his independence of character and judgment, and he continues to bring invaluable experience and expertise to the Board. Telstra and its shareholders are very well served by Craig as Chair. And once again, the Board fully supports and recommends his reelection.

I will now take any questions in relation to Craig's reelection. The proxy and direct voting position is being displayed on the screen. Nathan, do we have any questions?

There are no questions online, and we have no questions in the room.

Thank you.

That concludes the question-and-answer session for this item.

Thank you. Well, we have now finalized the discussion on this item. As indicated in Notice of Meeting and as Chair for this part of the meeting, I intend to vote all available proxies on this item in favor of Craig's reelection. Shareholders, please complete your voting card for item 3B now.

As we have now final this item, I will hand the Chair back to Craig and congratulate him.

Thank you, Elana, and thank you, shareholders. It's a great honor to continue as Chair. Items 4 and 5 on today's agenda are set out in the Notice of Meeting and are now being shown on the screen. They relate to the allocation of equity to our CEO, Vicki Brady, and the adoption of our 2025 remuneration report or rem report for short. These items are well covered in the Notice of Meeting and the rem report, and so I don't propose to go into detail here.

In summary, with the change in remuneration structure that I mentioned earlier in the meeting and which again is covered in significant detail in this year's rem report, for this year, on a onetime transitional basis only, we are seeking shareholder approval for three grants to Vicki. The first two grants being the FY '25 EVP restricted shares and EVP performance rights, which form part of the CEO's total remuneration package for FY '25. And the third being FY '26 LTI performance rights, which form part of the CEO's total remuneration package for FY '26. The performance rights under the FY '26 LTI plan will be granted at the start of the relevant performance year and not following the end of the relevant or previous performance year as has been the case under the EVP.

Items 4 and 5 will be voted on separately, but as they relate or both relate to remuneration, we'll deal with them together now. If you have any questions regarding items 4 or 5, please come to your nearest microphone or submit your questions online. The Board recommends that shareholders vote in favor of these items. The proxy and direct voting position for Items 4 and 5 are now being shown on the screen. As indicated in the Notice of Meeting, I intend to vote all available proxies in favor of the grants to Vicki and the adoption of the 2025 rem report.

Nathan, over to you for any questions.

We have no questions online, but I think we have a question at microphone #1.

Chair, I'd like to reintroduce Mr. Mike Robey from the Australian Shareholders' Association.

Thank you, Mr. Chair. Look, my sympathies to Elana for having to redraft the whole remuneration report. Our view is it's probably the least appreciated job done by the Board. And so we're very grateful that you've actually simplified what was quite a complex report. And in fact, most shareholders have no idea how remuneration works. And I think Telstra has gone to great lengths to try and a head down towards what most other companies do, slight differences; and b, make it intelligible.

My only question really more of a comment it concerns some of the nonfinancial measures used in the performance plans, and they include a customer service measure, which we've heard about today, which is called the eNPS or the Net Promoter Score, a company reputational measure, which is called RepTrak, which is how wider community views Telstra's reputation and a staff engagement measure. Now all of these are targeted in the middle of the bands in which they operate. So for example, other companies do way better than Telstra on each of these measures. And it looks like Telstra is targeting to be average on these scores rather than actually outstanding.

Is this the best that what's become a utility company can expect because, in fact, customers only really notice their companies like Telstra and the utility companies when things go wrong? Or should we up the game and try to target much higher numbers?

Thanks, Mr. Robey, for your question. And obviously, the scorecard, just to remind shareholders, is a combination of financial targets and nonfinancial targets. And as Mr. Robey noted, the nonfinancial targets for some time and continue going forward under the new strategy have clear targets for the customer experience, both episode and strategic.

And also, as Mr. Robey noted, have a score for our broader reputation. The broader reputation score is independently measured by RepTrak. So that's got -- that measurement and scorecards got is determined by an independent agency. We believe we've made good progress on that reputation score. We believe we've got more progress to make. We think that target is a good balance of being achievable, but also stretching for management. It's a very important target for us to continue to improve. We've spent a fair part of the meeting talking about the customer experience and how that's changed and improved very significantly over recent times. When we sit down with Vicki, we take some considerable time as Vicki before she puts the draft target to the rem committee and the Board to consider. Again, we think the targets for both those customer measures have got an appropriate balance of being achievable, but also stretching. And we think they're very important going forward. So as best we can do, Mr. Robey, we think they're sensible targets to set management going forward.

There are no further questions online or in the room or hang on. We have one further question on mic four.

Chair, I'd like to reintroduce Mr. Ian Hamilton.

I probably say it in the annual report, but I haven't been able to find it. Where do the shares come from? Are they purchased off the share market or they are new ones that are created?

We buy the shares on market if we need to satisfy share allocations to executives. Thank you, Mr. Hamilton.

That concludes the question session for these items.

Okay. Thank you again, Nathan, and thank you, shareholders, for your questions. If you haven't already done so, please complete your voting card for Items 4 and 5.

So shareholders, that concludes the formal business of today's Annual General Meeting. Please put your voting card in one of the ballot boxes located throughout the room and near the exits. The poll will remain open for a further 10 minutes. The results of the poll will be made available later today and can be obtained by visiting the ASX or Telstra website.

I now declare our 2025 Annual General Meeting closed, subject to the finalization of the poll on Items 3 to 5. And shareholders, on behalf of the Board, thank you very much for joining us today, whether in the room or online, and thank you for your continued investment in Telstra. Good morning.

Good morning, and welcome to Telstra's results announcement for the year ending 30 June 2025. I am Nathan Burley, Head of Investor Relations. I'm joining today from the lands of the Gadigal people. And on behalf of Telstra, I acknowledge and pay my respects to the traditional custodians of country throughout Australia and recognize the continued connection Australia's First Nations people have to land, waters and culture. We pay our respects to elders past and present. .

This morning, we will have presentations from our CEO, Vicki Brady and our CFO, Michael Ackland. We will then open to questions from analysts, investors and the media. I will now hand over to Vicki.

Thank you, Nathan, and good morning, everyone, and thank you for joining us. I'll make some comments related to Australia's productivity before I reflect on Telstra's overall performance and our outlook for the future. Michael will then cover the details of our financials. We welcome the national conversation on productivity, and we believe the telco sector has an important role to play. To unlock opportunities from technology, we've got to have the right foundation of digital infrastructure. That goes beyond data centers to connectivity, including the high-capacity, low-latency fiber and advanced mobile networks needed to support a tech-enabled innovation-led economy.

We need a national digital infrastructure plan for how we will enable Australia's digital future. It is the critical foundation for how we will realize the opportunities we see for individuals, businesses and the country to be more prosperous and competitive. As part of that, we need the right policy and regulatory settings to make sure we can roll out large-scale digital infrastructure projects more quickly and efficiently. This comes with having a pro-growth mindset to policy and regulation overall. We need a national spectrum strategy to make sure the country spectrum is being used to deliver the greatest possible economic and social value for all Australians.

Certainty of Spectrum is perhaps the biggest opportunity to unlock investment in network infrastructure. and the benefits that come with better mobile services for consumers. The telco sector is ready to play our role, working with government, regulators and industry. What we need is a national vision and plan that we can all play our part in delivering on.

Turning now to Telstra's performance for the year. FY '25 was a strong year for Telstra, as we continue to deliver for customers and shareholders. We celebrated the successful completion of our T25 strategy delivered on our commitments to lift customer experience build our reputation and drive sustainable growth and announced our Connected Future 30 strategy, which will see us radically innovate in our core connectivity business. You can see a summary of our results on this slide.

We delivered our fourth consecutive year of underlying growth, reflecting momentum across our business strong cost control and disciplined capital management. Our reported growth this year is stronger than underlying growth because of significant one-off net costs totaling $715 million in the prior year. These costs discussed last year were mostly related to impairments and restructuring associated with the reset of our Telstra Enterprise business.

In 2025, reported financial performance included EBITDA up 14% to $8.6 billion, profit up 31% to $2.3 billion, earnings per share up 34% to $0.189 and return on invested capital up 1.7 points to 8.5%. Our underlying growth more accurately reflects our financial performance compared to the prior period. Excluding significant one-off items and other adjustments, Underlying financial performance showed EBITDA up 4.6%, profit up 1.8%, cash earnings per share up 12% to $0.224 and return on invested capital up 0.2 points to 8.5%.

On the back of earnings growth, the Board resolved to pay a fully franked final dividend of $0.095 per share. bringing total dividends for the year to $0.19 and representing a 5.6% increase on the prior year. In June this year, we completed our $750 million on-market share buyback. And today, we have announced an additional on-market buyback of up to $1 billion. This has been enabled by growth in earnings and the strength of our balance sheet. The buyback support earnings and dividend per share growth over time and along with increased total dividends demonstrate the Board and management's confidence in our financial strength and outlook.

Looking now at our results across the business. We grew underlying EBITDA across our mobile, fixed consumer and small business, fixed enterprise, InfraCo Fixed and Amplatel businesses. It's been a dynamic year in the mobile industry with 3G closure, new satellite technology, pricing changes and the migration of a significant volume of our customers to our new digital stack. In this context, our mobile business has continued to perform well. with EBITDA growth of $235 million.

Mobile's growth was driven by higher ARPU and customers continuing to choose our network and the value it provides. Mobile services revenue grew by 3.5%. Our fixed consumer and small business EBITDA grew by $109 million, reflecting ARPU growth and disciplined cost management. Pleasingly, our fixed enterprise EBITDA grew by $103 million, supported by decisive actions taken to reset this business and reduce costs. We remain committed to this reset with further changes announced last month to remove complexity and cost and set us up to deliver on our Connected Future 30 ambitions.

Today, we also announced a strategic partnership with Infosys, a global leader in digital services and consulting through the sale of a 75% stake in Versant Group. This is aligned with our Connected Future 30 strategy to focus on core connectivity and consistent with the reset of our enterprise business. Our international EBITDA declined by $96 million, with reductions across wholesale and enterprise and Digicel Pacific.

As I mentioned briefly at Investor Day, we have completed a strategic review of this business and are now taking action, including to reduce costs, double down on connectivity and exit the majority of our NAS products. The wholesale and enterprise international results include restructuring costs associated with this. These actions, together with the continued demand for connectivity mean the business is better positioned for the future.

Our infrastructure businesses continue to grow, reflecting strong customer demand. Across the business, we delivered strongly on costs through simplifying our operations, reducing some roles and improving our productivity, partly offset by cost inflation. Core fixed cost decreased by 4.7% or $306 million in the year. Cumulatively, we reduced our core fixed cost by $428 million since FY '22.

As we close out our T25 strategy, I'm pleased to reflect on the strong momentum and foundation we've built, which comes from continuing to improve and deliver for customers. A detailed summary of our performance by strategic pillar and overall scorecard is available in the appendix slide, so I'll keep it high level here. We set a high bar across our 4 T25 pillars to lift customer experience, extend our network leadership, deliver sustainable growth and value and to be the place our people want to work.

Thanks to the dedication of the Telstra team, we have exceeded the majority of our scorecard metrics, including successfully delivering on our financial growth targets across underlying EBITDA, EPS, ROIC and cost out. We achieved our objectives, but not always as expected as a lot changed over the course of T25 including technology evolution and inflation. For this reason, I am particularly proud of the way our team has adapted and delivered and the focus and discipline they have shown.

We've continued to invest in our mobile network, digital infrastructure and in bringing the latest technology to our customers. In FY '25, we reached 3 million square kilometers of mobile coverage now reaching 99.7% of Australia's population. We also expanded our 5G network to cover 95% of the population. In February, we announced we will invest an additional $800 million in our mobile network over 4 years within our business as usual CapEx. This is to deliver customers the most advanced, resilient and reliable mobile network in the country. We are building on our existing 5G leadership to deliver 5G advanced performance, and we're excited to be leading the market with technology innovations like automated carrier aggregation.

But what does that really mean for customers? It means mobile connectivity that will be faster more reliable and more efficient than the 5G of today. It also simplifies our network operations and brings us closer to our ambition of creating fully autonomous networks. At the same time, we're optimizing how we use spectrum, and this included the closure of our 3G network in the year, so we could redeploy that spectrum to further improve 5G services with flow-on benefits to 4G services.

Despite ongoing growth in demand for data, our expansion of 5G and use of additional spectrum has helped to increase the average speeds our mobile customers enjoy by around 11% since the closure of 3G. We established a 3G help line to support customers with the transition, and we have provided nearly 19,000 free phones to customers in vulnerable circumstances across Australia who had not yet transitioned to a 4G device. In June, we reached a significant milestone as we began to switch on our intercity fiber network, which will give Australia a new fiber backbone for industries that rely on high capacity, low latency connectivity.

Our Sydney to Canberra coastal route is now live. Canberra to Melbourne Coastal will switch on next and we'll progressively switch on more routes over the next 12 months. Also in June, we launched Australia's first satellite to mobile text messaging product. This is an important step forward for remote areas. And we're seeing around 90,000 devices connect to our satellite to mobile service on average per day. The service will become available on more handsets in time, and a satellite technology continues to evolve to support voice, data and IoT applications, we will explore how we bring those services to our customers.

Overall, we recognize that to remain a leader in connectivity, we need to be a leader in AI. And earlier this year, we announced a joint venture with Accenture. We stood up the joint venture in April, and we are focused on accelerating our data and AI road map to reach our customer experience and network ambitions faster. We're also focused on helping our people build skills and confidence using AI through our data and AI academy and the largest deployment of copilot for Microsoft 365 licenses in Australia.

For customers, while there is always more to do to improve the experience for them, I'm pleased to say we exceeded our T25 episode NPS target, achieving a 15-point improvement over the last 4 years. Digitization has been a big contributor to this. and to cutting customer complaints by more than 70% since FY '21. It has significantly improved the experience for our customers. For example, customers activating a service on our new platform have an NPS up to 50% higher than customers using our legacy technology.

Our journey on digitization has been long and complex. But we're now within reach of completing the migration of consumer customers to our new digital stack. As you would expect with a complex migration like this, some of the most challenging services come towards the end. We have fully migrated around 98% of our 7.7 million customers with the remaining 150,000 expected to be migrated by the end of this half.

Over the last 12 months, we've increased the price of some of our products and services, so we continue to improve the network and deliver for our customers. Similar to the investments and improvements I've already mentioned. I recognize that cost of living remains a challenge for some people and Telstra remains committed to offering our customers a range of options at different price points and flexibility to choose what's best for them. We also provide assistance for those who need it. And over the last 4 years, we've helped keep on average more than 1 million customers in vulnerable circumstances connected each year.

We know cybersecurity remains a concern for our customers. and scammers are evolving fast. We're evolving, too, investing in technology and partnerships to help protect our customers and make the digital world safer. This includes expanding our scan indicator partnership with the Commonwealth Bank to include fraud indicator. The introduction of Scam Protect to alert mobile customers to suspicious incoming calls and our cleaner pipes work, which continues to block millions of scam calls, texts and e-mails from reaching our customers.

For Australia, we reached our goal to upgrade more than 1,000 payphones in disaster-prone areas across Australia with free WiFi and backup power. We completed a significant program of work to improve the resilience of our assets to power failures. More than 800 sites were upgraded across the country with batteries, solar, generators and improved monitoring and security, meaning our customers can stay connected for longer when power goes out. We also continue to make strong progress against our climate targets. And we've now supported investments in renewable energy projects worth $1.6 billion, helping to enable projects across Queensland, Victoria and New South Wales. These investments mean we're on track to enable renewable energy generation equivalent to 100% of our consumption by the end of 2025.

As I look ahead now to the future, there's a lot that gives me confidence. In addition to our incredible team of passionate people across Telstra, trends indicate that demand for connectivity will only grow. Our core connectivity business is strong. with a unique set of competitive advantages that mean we are well placed to lead through this next period of technological change. And we have established a strong track record of disciplined delivery through T22 and T25. This has laid the foundation for our Connected Future 30 strategy, which will see us adapt and lead to shape the future of connectivity.

We are focused on continuing to deliver value for our shareholders, importantly, through our core business cash flow and also through active portfolio and investment management and disciplined capital management. Our ambition is to be the #1 choice for connectivity in Australia and to continue delivering on our purpose to build a connected future so that everyone can thrive.

I'd like to thank the Telstra team for the discipline and focus they have shown over FY '25 and throughout our T25 strategy. We simply can't produce strong results without delivering for customers and continuing to improve customer experience, and our amazing team are fundamental to that.

I'll now hand to Michael to take you through the results in detail.

Thanks, Vicki. I'm pleased to present our financial results now for FY '25. As Vicki said, we've had another strong year with continued growth on both a reported and an underlying basis. Reported net profit was up 31% and earnings per share up 34% and primarily due to a $715 million pretax one-off of net costs in the previous year. In contrast, our underlying result had a small $14 million pretax adjustment from our reported results this year. Excluding these items, on an underlying basis, our EBITDA of $8.6 billion was 4.6% higher. Underlying earnings per share of $0.191 was up 3.2% as higher finance costs tax and depreciation and amortization, or D&A tempered growth.

Cash earnings growth was stronger on broadly flat BAU CapEx, demonstrating the cash generation of our operations. Cash EPS of $0.224 was up 12%. As we said at our recent Investor Day, our aim is to deliver sustainable and growing dividends, having regard to cash EPS and EPS and balance sheet strength. In line with this, the Board has declared total dividends for FY '25 of $0.19 per share, fully franked, up 5.6%.

While our strong preference is to continue to fully frank dividends, our franking balance is tight and we have an ongoing difference between cash and accounting earnings. We may consider partially franked dividends if growing fully franked dividends is not possible. where we have additional capital return to shareholders, our preference is buybacks rather than unfranked dividends. However, we retain the flexibility depending on value and market circumstances. Our goal is to drive enduring shareholder value creation and accretive buybacks are consistent with this. Accordingly, we also announced today an on-market share buyback of up to $1 billion, reflecting the strength of our balance sheet. This follows the completion of our previously announced $750 million buyback in June '25 at an average share price of $4.43, reducing shares on issue by 1.5%.

Looking at our underlying results in more detail on Slide 13. While total income increased 0.7%, we reduced our operating expenses by double that percentage through an ongoing focus on cost discipline. This delivered underlying EBITDA growth of 4.6%. As previously indicated, D&A expense increased. It was up 4.7% or over $200 million, largely reflecting the ongoing shift to shorter life assets. We continue to expect the trend of materially higher D&A to continue in coming years.

Finance costs increased on higher debt levels and tax expense increased with stronger earnings and a higher effective tax rate of 28.5%. Pleasingly, we achieved our growth -- we achieved growth across domestic connectivity and infrastructure products, including mobile, fixed NSB, fixed enterprise, InfraCo Fixed and Amplatel. However, we saw a decline in international and fixed active wholesale. Other EBITDA also declined with a $34 million reduction in gains related to tower access agreements and a $17 million reduction in energy, partly offset by lower corporate adjustments.

Turning to mobile. Our leading mobile network and customer-focused proposition supported 5% EBITDA growth. Mobile service revenue grew 3.5%, driven by postpaid, prepaid and wholesale handheld, partially offset by a decline in mobile broadband. During the year, we increased prices across much of the portfolio. These actions contributed to a 2.1% increase in average revenue per user, or ARPU, supporting ongoing investments in network performance, differentiation and customer experience. This includes the launch of our satellite to mobile text messaging service, an Australian first, offering our customers an additional layer of connectivity while also increasing our cost of goods sold going forward.

Postpaid ARPU rose 2.5%, driven by consumer, while prepaid rose 8.4% and wholesale 5%. Overall, our handheld user base continued to grow, particularly in consumer and wholesale. Our reported CIOs do reflect a number of one-offs in FY '25. There was $162,000 impact to postpaid from 3G closure, reclassification of some services to IoT and deactivation of unused bidirpays-yougo SIMs mainly in enterprise and mid-market. Excluding these, postpaid SIOs grew by 106,000 mainly in the first half and driven by consumer. We delivered this growth in spite of price changes and the disruptions of migrating consumer customers to our new digital IT stack.

In prepaid, we made deliberate choices on our channel strategy to improve commercial outcomes. ARPU growth overwhelmingly offset the impact of CIOs and recent trading momentum is pleasing. Overall, we're confident in continuing to deliver growth and value with the benefits of our actions, including recent price changes flowing through into FY '26.

Turning to fixed consumer and small business, where our focus on profitability and a portfolio of technologies continue to deliver growth. EBITDA grew 43% to $363 million. Bundles and data ARPU grew 5.7% and price rises that came into effect in November 2023 and July 2024, delivering NBN margin expansion despite ongoing customer losses. Our portfolio of technologies, including 5G fixed wireless, which continue to scale as well as our satellite home Internet product also supported EBITDA growth, while headwinds from legacy and voice decline continued.

In fixed enterprise, we made strong progress in resetting the business. Our actions helped deliver EBITDA growth of 76% to $239 million, despite continued structural headwinds across parts of the portfolio. Data and connectivity or DAC, remains impacted by ARPU compression and technology change. Income fell 9%, while EBITDA decline was limited to 10% from cost actions.

In Network Applications and Services or NAS, Revenue increased slightly with contribution -- with the contribution of prior year acquisitions, managed services and cloud growth. This was partially offset by fewer lower-margin equipment sales, legacy calling and product exit decline in line with strategy. We have improved margin outcomes across much of NAS, including professional services, managed services, security, large deals and cloud. Growth in these areas more than offset ongoing legacy calling and product exit-driven decline. This and our actions to reduce operating costs supported NAS EBITDA of $153 million. While these results are positive and customers are responding well, there is still more work to do to simplify our portfolio and improve outcomes.

To this end, we announced further organizational changes in July and the sale of Versant Group, which includes Versant and parts of our NAS business. Our focus on portfolio management, however, is ongoing.

Turning to international on Slide 18. Wholesale and enterprise revenue continued to benefit from ongoing demand for our offshore infrastructure and subsea cable capacity. DAC grew 4.5%, partially offset by continued declines in legacy voice and NAS following our decision to refocus the portfolio. As Vicki mentioned, we've taken decisive action following our strategic review including the exit of certain NAS products and a reorganization of our teams. Accordingly, our results reflect significant restructuring costs as well as timing benefits in the prior year that did not repeat this year.

Wholesale and enterprise EBITDA fell to AUD 351 million, an 11% decline in constant currency. While the exit of products is expected to impact revenue further, these actions put us in a better position for the future. Digicel Pacific trading performance for the year saw SIO growth offset by a reduction in P&G ARPU. EBITDA was down 3.5% in constant currency, excluding the impact of the earnout release in the prior period, with the second half up sequentially in Australian dollars.

Turning to our domestic infrastructure business. InfraCo Fixed results continue to benefit from the demand for dark fiber and ducts for nbnco, and other customers, partially offset by lower commercial works and asset disposals. I InfraCo Fixed core access EBITDA grew 5.1% with stronger operating leverage. Lower overall power consumption contributed to lower internal charges also to InfraCo. Amplat continued to benefit from strong demand for towers and new signings. EBITDA grew 7.5%, excluding the gains from customer contracts last year. We continue to make progress with our intercity fiber network with 1 route ready for service late in the year. The next route, Cambria to Melbourne Coastal, is expected this half, linking Sydney and Melbourne with this world-class technology. We expect more significant contribution to revenue growth from FY '27 in line with more opening more routes.

We delivered a significant reduction in operating expenses in FY '25. Our strong performance was achieved through productivity and lower sales costs despite inflationary pressures and growth from acquired businesses. This included $306 million reduction in fixed cost core this year. and $428 million across T25. We achieved cost decline this year through reductions in our direct and indirect labor, including those linked to restructuring costs in FY '24. Lower commissions and power costs with reduced consumption and other productivity more than offsetting salary increases, inflation and higher than businesses usual -- higher business as usual assumption -- redundancies. Our focus on efficiency also extends beyond operating expenses to leases and BAU CapEx.

Cash EBIT costs declined, delivering operating leverage of 1.8 percentage points including due to the restructuring in the prior period. Consistently growing revenue faster than costs to deliver positive operating leverage is the focus of our cost commitments under Connected Future 30.

Our cash generation is strong. This slide shows the walk from underlying EBITDA to cash EBIT. We are increasingly focused on this measure, and we've provided guidance on this basis for FY '26. Cash EBIT grew 9.5% on higher EBITDA and broadly flat BAU CapEx, leases and spectrum amortization. Free cash flow after leases before strategic investment increased 5.7% to $3.4 billion, driven by that higher cash EBIT.

Working capital and other investment in FY '25 and reflects our management of receivables and inventory, offset by a $300 million cash flow related to the FY '24 restructuring. We also expect around $250 million working capital outflow in FY '26 associated with an NBN true-up payment as we've previously indicated. This strong cash generation supported shareholder returns and strategic investment. Strategic investment for the Intercity fiber project was $325 million, and we also received proceeds from portfolio management, including the $131 million loan repayment from the sale of Foxtel. In all, this supported dividends and buybacks of $2.9 billion this year.

In addition, our capital position and liquidity remains strong. Net debt remains well within the comfort zone at 1.9x and our average cost of debt remained at 5%. We've also improved our underlying return on invested capital to 8.5% through earnings growth and capital discipline. Our Connected Future 30 target is 10% and by 2030.

Turning to guidance for FY '26, which is on Slide 24. You'll see here that we've reflected the metrics we outlined at our recent Investor Day, as we focus on driving cash earnings as part of our strategy to create value. Underlying EBITDA has been replaced by underlying EBITDA after lease amortization or EBITDA, reflecting a broader measure of costs in our business. For FY '25, we reported underlying EBITDA of $8.6 billion, a $600 million of lease amortization giving us $8.02 billion of EBITDA. Our FY '26 guidance range is $8.15 billion to $8.45 billion. We expect lease amortization to remain broadly the same, around $600 million in FY '26.

As I mentioned earlier, we are guiding on cash EBIT in FY '26, which is made up of underlying EBITDA, business as usual CapEx and spectrum amortization. Cash EBIT is a close proxy for free cash flow and drives management focus on all of these costs. We remain focused on free cash flow, and we will continue to report on working capital performance. Our FY '26 EBIT -- cash EBIT is expected to be between $4.55 billion and $4.75 billion. This is equivalent to growth of between 5.5% and 10% on FY '25, demonstrating the cash generation of our operating business. BAU CapEx of $3.2 billion to $3.5 billion further demonstrates our disciplined approach to CapEx. Strategic investment is expected to be between $0.3 billion and $0.5 billion in FY '26, reflecting the continued rollout of our Intercity Fiber project.

Our results and FY '26 guidance for strong cash EBIT growth is a clear demonstration of our shareholder value creation under Connected 30. One, growth of our core cash flow led by mobiles and digital infrastructure, coupled with cost and BAU CapEx efficiency, delivering positive operating leverage; two, portfolio and investment management to optimize returns; and three, disciplined capital management as we maintain balance sheet strength and deliver flexibility and deliver a strong and growing dividend and reduce shares on issue with accretive buybacks.

Finally, I would like to thank the Telstra team for their ongoing efforts in delivering for our customers, the community and our shareholders. I'll now hand back to Nathan for Q&A. Thank you.

Thank you, Michael. We'll now begin a question-and-answer session, beginning with investors and analysts. Vicki and Michael are on stage. Also present in the room today are Brad Whitcomb, Head of Consumer Oliver Camplin Warner, Head of Enterprise; Amanda Hutton, Head of Business; and Brendon Riley, CEO of InfraCo.

We'll begin with our first question, which comes from Eric Choi from Baron Joe. Go ahead, Eric.

Could I believe ask 3 questions, 1 on FY '26 guidance. 1 on mobile subs and then 1 on cash EBIT and capital management. Anything do you want me to go all at once? .

Yes, let's go through them, give us all the questions, Eric, and then we'll answer them. .

Okay. Sorry. First 1 on 26 guidance. you're still implying about $300 million of nominal EBITDA growth in FY '26 versus FY '25, and that's without a major cost out round like you had in FY '25. I think that's right in line with our Investor Day guidance, which implicitly had around $300 million of EBITDA growth every year to FY '30. So that's my first question is FY '26 guidance basically in line with the 30 targets you set at Investor Day. And given you're doing $300 million of EBITDA growth without major head count changes, is there potential for lumpier EBITDA growth above $300 million as well in future years given Telstra could do AI efficiencies like Global is and you've still got ICF earnings to come in at some stage. .

Second question is on mobile subs. I think the subscriber performance probably needs to be viewed in the context of competitive price increases. So Vodafone did these later than usual this year. They did it in June and July. -- usually, they go in January and March -- so my question -- or my second question is the subscriber momentum improved since both Vodafone and Optus lifted pricing. And the sub-question is, given Vodafone's lifting pricing, -- does that still suggest to you, the market remains broadly rational, i.e., players are still prioritizing ROIC in service revenue rather than just pure subscriber growth.

And then the third question on cash EBIT and implications for capital management. Thanks for the disclosure. So it looks like there was a $0.03 gap, i.e., cash EPS was $0.03 higher than accounting EPS in '25. You can do the math and work out cash EPS will be $0.05 or higher than accounting EPS in FY '26. And then that will continue to grow over time. And obviously, that's important because in dollar terms, that's an extra $500 million every year of capital firepower above our accounting EPS, and that's before asset sales and before moving your gearing up higher as well. So -- my third question is, you're using that capital firepower for $1 billion of capital management in FY '26. Is that -- do we take that -- given that cash EPS and accounting EPS GAAP is likely to persist in growth, does that mean that capital management? -- both as a feature and as a quantum -- that seems like more of an ongoing feature, if you like, rather than a one-off .

Excellent. Well, thanks, Eric, and good to have you on. A good set of questions there, quite a lot in them. What I thought I'd do, why don't I make some brief comments on the first one, and as we get to mobile subs, I will get Brad Wickham to jump up and comment as well because I think -- the big thing in there is really what's trading momentum looking like. So we'll come back to that. And then on capital management, that's probably 1 for Michael to talk through. But if I start with your first question, Eric, which is all around FY '26 guidance, how does it sit relative to our connected future 30 financial ambitions. I think as you have very correctly analyzed, it's very much in line with those ambitions. And it is deliberately a longer strategy out to 2030.

So we have set those big, broad ambitions. And how it plays out just like we've had to do under 2 -- it didn't quite play out the way I anticipated when we first set our T25 ambitions, we will have flexibility as we work through that period. But absolutely, we're kicking off the first year of connected future 30 with our guidance very much in line with achieving our overall connected future 30 ambitions. So I thought your analysis on that was great. Why don't I just on mobile subs, as Michael spoke to, it has been an incredibly dynamic and competitive period, particularly the second half. And so as he spoke to, we do have a group of one-off items across 3G closure, some deactivation of COVID error SIMs and then some reclassification into IoT. That's 162,000.

So we're still very pleased with the overall performance of our mobile business in the financial year. As you said, it's competitive. There's a lot going on as is always the case in the mobile business. So why don't I pass across to Brad to talk about that trading dynamic and what we're seeing, and then we'll come back to Michael.

Yes. Thanks, Vicki, and thanks, Eric. I think I might talk about post and pre separately, although we do think about them as an integrated set of offerings to the customer, there's different dynamics going on, as you would expect. So with Post, as you're aware, we did announce a price rise back in May, this is not our first time going through this process. So we would have modeled out what the expected impact would that would be. And not surprisingly, that would suppress acquisition as we've got dual quoting in the market. and also could lead to some customers considering whether they want to say either on that plan or with Telstra. Then we actually roll out the price rises in this case it hit in July. So when customers get their first bill. That's another opportunity for reappraisal.

We absolutely do not factor in competitor moves. We think about our own pricing. So we're playing our own game and figuring out how we want to create that value for our customers. I would say our trading performance has very much been in line with our expectations. And again, we've got several years of experience with this. And we have a bit of a blip in churn around the May time frame then also first bill, in this case in July, and we've seen that expected rebound in the market.

For prepaid, I'd say there, I mean, off the back of the 8% ARPU increase, you could see it was a fairly substantial price rise that we put in back at the end of October. So most of that impact would have flowed through into the second half of the year. As Michael said, we also took some other actions within the prepaid portfolio, particularly looking at some of our long life plans, which, in our mind, were less commercial than they needed to be and then also looking at our channel and distribution and where we can make better economic decisions around that.

So we're confident in those decisions that we've taken on prepaid, and we're pleased with where we are on that. And again, with that price rise now fairly well back in the rearview mirror, we are seeing the rebound in performance around prepaid as well. That being said, it is a more subdued market than what we have seen in recent years. I think both for post and for pre. But again, we're very pleased with our position on that.

Great. So thanks , Brad. And I think Brad summarized it really well, Eric. We're very pleased with where we're at on mobiles. And I think we do -- it does look like overall, it's been more subdued market growth at a [indiscernible] level overall, and we probably expect that to continue into '26.

If I move on to the -- your question on capital management, and I think what I would say is, as we sort of -- as we said at Investor Day, our objective is to provide sustainable and growing dividends. Our preference is fully franked, but we will consider unfranked dividends given the nature of that gap between cash earnings and EPS that you described, which is likely to be ongoing. We will consider frank dividends unfranked dividends if providing growth in fully franked dividends is an achievable at a level that we want. But our preference is where there is the opportunity for accretive buybacks, and that will depend on market circumstances, of course. Our preference is buybacks rather than unfranked dividends.

So we absolutely do see that elevated D&A continuing for some time as we move as we see that trend towards shorter life assets, so more intangibles, more software and generally shorter life assets. So I think that gap will remain for some time as we see DNA elevated.

Back to sort of Vicki's point at the start. I think your analysis of where we're at is absolutely right. I would just sort of land on a couple of things. I think 1 is we're absolutely committed to that mid-single-digit growth in cash earnings. And I think our guidance for next year is very clear on that. And the second one is that we're committed to delivering positive operating leverage. So there will absolutely be cost out in FY '26. But you are right, there isn't a big restructuring charge that we've taken, although as reflected in our FY '25 results, there was higher than usual BAU redundancies in our in our numbers going through. So we continue to be focused on efficiency across all parts of our business, and that will be a feature as we go forward.

Great. We will go to our next question from Andrey Rakowski from Evans Partners.

Maybe if I can firstly follow up on the postpaid net adds in the second half. I mean, you've obviously just spoken to it. But -- so conscious we're only seeing marginal growth in underlying numbers, I think it was only 4,000 increase in 28 after a much stronger growth. in the first half. And we're also seeing this across the market. Obviously, Optus had their numbers out yesterday at TPG last week. I suppose just at a broader market level, what are the key dynamics driving this? I know you commented around a subdued market, but are we finding that there's a big shift to prepaid and Tier 2 operators. And so just interested in the broader dynamics and then you've said it will continue into FY '26. Do you think this is a structural thing, which will normalize over time, and we should just see a temporary impact I think just your longer-term thoughts would be helpful.

The second one, is on the guidance, the midpoint of guidance is -- I mean, as Eric mentioned, you've got circuit sort of $300 million growth, call it, $280 million, $300 million. That's down from about $400 million in FY '25. Are there specific drivers for that lower sequential growth. The mobile price increases certainly seem to be positive. They're coming in a bit earlier this year as well. I mean is it the lower is that are a challenge? Is it cost out, which is probably expected to have less of a benefit. Just if you can talk through those building blocks, that would be useful.

And final one is on the buyback announcement. Are you able to confirm whether the intention is that billion is the scale -- the full scale of the buyback for FY '26? Or are you leaving any room to upsize or increase the scale of that buyback as the year progresses?

Thanks, Another good set of questions. So let me make some comments, and then I'm sure Michael will want to jump in as well. So just on postpaid net adds, yes, obviously, we've seen some numbers reported, as you said last week and yesterday and then we've reported today. Look, absolutely. I think the trend has continued. It's just probably a little bit more stack for this half in terms of where a lot of the activities in the market is in the prepaid or that lower end part of the market. Obviously, we're a very mature postpaid market. So we've seen that sort of net add movement be pretty small would be our assessment as well.

And as Michael said, as we look to FY '26 and looking at very, very early trading momentum, which Brad spoke about, which we're pleased about, but we would anticipate probably the market to continue with the same sort of trends that we've seen in the second half of FY '25.

I'd say on guidance, and I'm sure Michael will jump in as well. Obviously, the biggest difference between FY '25 and FY '26. In FY '25, we did obviously announced just ahead of FY '25 significant restructuring charge. And that did involve large impacts on jobs. So cost out has been a key contributor in FY '25. So that would be 1 of the biggest differences as we look between FY '25 and FY '26.

And then in terms of the buyback, we've obviously announced that up to $1 billion of buyback today. I mean, as Michael spoke to, as he was talking through the results, our capital management framework is very clear. We know in terms of creating value for shareholders. First off, the underlying business has to be growing and generating strong cash growth, and we're really pleased where that's at and 4 consecutive years of underlying growth puts us in a position where we are investing in our BAU CapEx. We are investing in strategic CapEx, we've been able to lift the dividend and announce the up to $1 billion buyback. So that capital management framework will continue to really guide us and the Board as we think through the remainder of this year and through our Connected Future 30 strategy.

But I would just call out the ability to be in this position has come through, obviously, very disciplined and focused execution over many years, and that's why we're remaining focused on to really keep delivering for our customers because ultimately, we've got to do that to make sure that our business can continue to grow and create that capacity for us to be able to then generate the best possible outcomes we can for our shareholders.

But Michael, why don't you jump in and comment on any of those.

Yes. Well, why don't I just touch on guidance. I think you've covered the others, I don't have anything else to add. I would say in guidance -- and so, we've really strong confidence in our ability to deliver the FY '26 guidance. And as you said, as was being talked to, it's aligned with our CF30 commitments and strategy. A couple of things. Mobile continues to be a big driver. And as you said, those price impacts flowing through. There is a little bit of a -- there will be a bit of a drag from the cost of satellite to mobile that will subdue that slightly. Infrastructure, can just grow and then, of course, positive operating leverage. And as Vicki said, probably 1 of the big deltas between 24 to 25 and 25 to 26 will be cost out because we didn't do the big restructuring in the same way. We still have some of those structural headwinds and decline that we need to be aware of in DAC and calling particularly. And also we need to -- we'll be thinking through some of those asset sales and the headwinds that some of the asset sales that we've announced this morning around the Versant Group create and we talked about that at a revenue level, but you can probably calculate what that would mean at an EBITDA level around the guidance number. .

Excellent. Our next question comes from Roger Samuel from Jefferies. Roger, are you on mute? Looks like we don't have Roger. We will go to Liam Robertson from Jarden.

Okay, go ahead Roger.

Okay. All right. Okay. My first question is just going back to, obviously, mobile again. Obviously, the momentum accelerated in the second half of '25. But I also noticed that your churn rate has increased as well because now it's sort of running at about 13% to 14% rather than the 10% to 11% in prior years. Do you think there is any structural change in terms of competition maybe you've got some impacts from [indiscernible] between TPG and Opus. So just trying to understand that.

The second question is on fixed [ CMSB ]. I'm not sure if you can disclose your NBN margin, but I just traits around the low digits now. And I'm just wondering if you are expecting further margin expected further margin expansion in September in the NBN Speedboost?

And lastly, just on Digicel I noticed that they're planning to test the 5G network now. And I'm just wondering if there's any CapEx associated with that trial and maybe your BAU CapEx of '26 would end up being at the high end of the range.

Excellent. Thanks, Roger. Thanks for those questions. I'll make a few comments, but I might get Brad in a sec to come and talk a little bit about -- more about postpaid mobile churn, just to dive into that a little bit more. And I'm guessing, Michael might want to comment or Brad on fixed consumer and small business in terms of NBN margins, which just to comment, we don't disclose them separately in these set of results, but I'm sure Brad or Michael can make some comments on how we're seeing those. And obviously, the big change is coming in September with the speed upgrades from NBN.

And then on Digicel, I will pass to Michael. Michael Chairs, our Digital Pacific Group. And so he's very close to what's going on in that business, so I'll get him to comment. And I think -- just first off, on postpaid mobile churn, yes, as you look at the numbers reported, it does look like a step-up in churn Brad will jump in and speak about, as I mentioned, this was a very, very significant year of migration of customers in our consumer business to our new digital stack. And as you can imagine, as you go through transitions and particularly now, we're right in the very tail end of that with just 150,000 customers out of the $7.7 million to go. You do start to face into the choices and some disruption as you need to make decisions to get customers across into that new stack because ultimately, we need all customers across to them be able to reap the full benefits then of obviously, switching off legacy systems alongside the benefits we're already starting to capture in the experience and efficiency with which our teams can also support our customers. So there are a few things going on, particularly in the second half on churn that I think it would be valuable,

Brad, if you want to jump in and talk a little bit more about.

Yes. Thanks, Vicki. And, yes. So the few things I would say is, first, as Vicki pointed out, we did have a fair number of customer impacting events during the year. So -- by far, the biggest 1 would be we migrated 3.1 million customers onto our new digital stack. And part of that was taking some commercial decisions around whether we replicate everything that we had in the old stack and bring it into the new or whether we simplify as we go. And we generally took a decision to move towards simplification, so we can give a better customer experience in the future and do it at a lower cost.

One of the outcomes of that was we did have a large cohort of customers that are through our JV brand, which were under contract. The simplest way to move those customers to the new stack was to release a number of those customers from contract -- and we did see some of those customers take advantage of that getting out of that commitment and that saw an increase in churn. We estimate the combined impact of the migration and churn for the second half was somewhere around 40,000 to 50,000 and customers, so it's fairly substantial. And also, I talked about the price rise and the timing of the price rise, doing that in May, getting into the price establishment period where our ability to trade is significantly curtailed. And so we would have seen some churn coming as a result of that as well. We also exited our Platinum product. We exited Telstra TV.

So a number of things that we did to simplify the experience for our customers and make it more cost-effective to deliver did impact our churn. But if we look at the underlying rate, we're very confident with where we are on a churn perspective. We did, of course, face significant competitive pressure during the year, but that's nothing new for us. We face competition all the time. So I'd say most of that churn increase that you're talking about is from a number of factors that I just mentioned.

Yes. Thank you, Brad. I appreciate you covering that off. And Roger, I should have also commented, obviously, our postpaid mobile churn that we report does have enterprise and business in it. And as we spoke to when we spoke when Michael spoke to the one-offs, there were 3G closure, which was more heavily weighted into our enterprise business with some services deactivated. We did have some of those COVID era SIMs deactivate, which, again, heavily weighted into enterprise and then some reclassification of Sims out of postpaid into IoT, which again flow through in our churn numbers. So a number of things going on in our CIOs reported and flowing into the churn. But I thought it was important to understand a bit more around the consumer numbers, which I think Brad has done a great job of covering off. Do we want to go to fixed on the margin front? And maybe start, Brad, with you? .

Yes. Well, we're quite pleased. I think the sevenfold increase in profitability of that business over 3 years is something that the team is justifiably proud of. I would say we're not done working on margin. So we will see the price rise or the impact of the price rises that we put through continue to flow through into the new year. Of course, as Michael and Vicki both pointed out, we're super focused on discipline around costs. So we'll continue to be looking to drive cost. I wouldn't comment on the specifics around the NBN margin, but our aspiration is to continue to focus on this business, both from a subscriber perspective, but also profitability.

Thanks, Brad. Michael, do you want to cover off add anything to that or .

Yes, the -- that was perfect on fixed NSP. So just on Digicel, we have a number of sites, particularly in Port Moresby that are 5G ready and ready to go. So that CapEx has been done, we've been testing, and we're sort of working through regulatory approvals to start to turn that on. And then depending on how that goes, it will determine how fast we roll that out. I mean I think I don't foresee any significant increase particularly in CapEx. Around that CapEx will go up and down for Digicel. It's that kind of business and that kind of market. But no, I'm not expecting a big uplift of the 5G rollout in the very short term. We are -- we have put the hardware in place and we're working through regulatory approvals for rollout right now. .

Thank you, Roger. Our next question is from Liam Robinson from Jarden.

Three from me as well. Just firstly, on the EBITDA bridge. I mean, to Eric's point, the $300 million of both year-on-year into $26 million suggest you're on track to achieve the fiscal '30 targets. If I think about the 2-year EBITDA bridge though, I mean, in FY '26, you've got the benefit of early price rises in mobile. So about 14 months benefit versus 10 months in Mike [indiscernible] suggests that's about a $30 million benefit. That's obviously unlikely to repeat into FY '27. So fair to assume your 2-year mobile EBITDA bridge is weighted to growth in FY '26. So I guess, am I right to think that deliver another $300 million of growth into FY '27, you'll be more aligned on EBITDA growth from other segments?

And then just secondly, on international, we see EBITDA declined 11% year-on-year constant currency looks to be some sort of review underway there, similar to the enterprise portfolio. Obviously, you've taken action to close out this fiscal year, exited products incurred some one-off redundancy costs. how soon can we expect that portfolio to return to growth? I mean, obviously, you've got the $40 million Digicel earnout headwind into next year. so fair to assume that, that portfolio will likely decline into next year as well?

And then lastly, just a clarifying question on guidance. Just wanted to confirm your cash EBIT guidance excludes the ambient true-up, and that obviously is going through working capital. So I mean you haven't guided to free cash flow adjusted lease in FY '26, but I just wanted to confirm that, that will be impacted by the NBN true-up.

Thank you. Thanks, Liam. Another good 3 questions. So thank you for that. So just starting with the first 1 on the EBITDA bridge. I mean, the comments on in terms of what we will have flow through this year. You're right in terms of pricing changes. We obviously have some earlier changes coming into effect, which came in on start of July. So that is certainly a benefit in this year. I mean, we've given guidance for '26 6, so I won't give guidance on '27. But as you'd expect in our business, it is a portfolio of different parts of our business. We're working hard. We've had some I think very good momentum as both Michael and I spoke today about all of the parts of the business that delivered EBITDA growth in the year, of course, a couple of areas of headwind and I will come to our international business, which is I know the second question you had.

But we remain confident in our -- in achieving guidance for FY '26 and also I think it's a really good first year start that we've set guidance for our Connected Future 30 ambitions. So I think the business, as I said, we've laid a good foundation through T25. And so we're certainly entering our next strategy, feeling confident about what's ahead and continuing to deliver in terms of customers and ultimately in terms of those business results. for shareholders.

Just in terms of international, yes, to touch a little bit more on it. I only briefly commented on it at Investor Day, I think, in Q&A. So like we did with enterprise, as we looked at our international business, we have proactively done a review of the business, and the team leading that business made some very clear recommendations and decisions, which we're in the process of executing on. A big 1 of those was that similar to our enterprise business, -- in international, we see the real advantage in focusing and doubling down on connectivity and our undersea cable business. So we have made the decision to exit the large majority of our NAS services in our wholesale and enterprise business within international.

So that has resulted in impacts on a significant part of our international team as we really refocus that business around really innovating and facing into what we see as good demand for connectivity and capacity in that wholesale and enterprise business. As you said, there are a few things that hit the wholesale and enterprise international business in these reported results. Firstly, there is a restructuring charge because we have made those decisions and communicated those changes of the exit of the large majority of the NAS business and through consultation with our teams on that, that are impacted.

You'll also see there are FX impacts. And I think if you put the restructuring charge and the FX impact, that's about 2/3 of that decline in EBITDA that you see in our international wholesale and enterprise business. I think as we're now into FY '26, those decisions have made bearing train have been implemented. We definitely see the business better positioned for FY '26. And as I said, we -- just like we see in Australia, there's a lot of demand for connectivity. We certainly see that demand across our international business and remembering we are the largest subsea player across intra-Asia. So it's a big part of that portfolio, and we continue to see demand and remain optimistic with the business in a better position for this financial year post having made those changes and implementing them in that business.

I might then hand Michael, to you for the last one or any other comments you want to add?

No, I think you covered the rest really well, Vicki. And so cash EBIT does not include the NBN true up. Our cash EBIT is, I think, as most of you will follow as an accounting metric. And so it follows through the full accounting view and then spectrum amortization and then in the BAU CapEx. So the NBN true-up will be not in the cash EBIT guidance. We will continue to report, of course, as we said, on free cash flow, and the team remain very focused on working capital movements, but we do think that from a management point of view, the cash EBIT metric is a really strong metric to drive accountability across the business for all kinds of cost and is a good analogy for free cash flow. .

Great. Our next question comes from Bob Chen from JPMorgan. Go ahead.

Vicki Michael and team. Just a few questions for me, a little of a follow-up on sort of the mobile business. There was obviously a few one-offs this year. I mean, are there any other one-offs we should be aware of that might impact the CIOs numbers into next year? And then on pricing in mobile, I guess, I think 1 of the earlier comments was you don't really look at the competitive pricing when you're coming up with your own price increases. What seeds into that decision to do a price increase in sort of the size of quantum of those price increases? .

And then just finally as well, on the fixed enterprise business, we've obviously seen a pretty significant lift in the second half in margin of that business following the restructuring. Is that sort of the go-forward margin sort of expectation in that business in the next year? .

Thanks, Bob, for that. Thanks for those 3 questions. On the mobile business, and I'll make some comments and Michael interested in your thoughts as well. I'm not sure there'll be a huge amount on that one. just talk about the mobile market. And then I will get Oliver to come up and join and make some comments, too, on our fixed enterprise business shortly. So on the mobile business, as you said, in terms of CIOs, there were a lot of one-off pieces that have impacted our subscriber numbers for this financial year, particularly second half. Look, sitting here today, .

I would say, well, a 3G closure, when you do a transition of generations in mobile networks that obviously, that's a big deal. We won't have a generational change in mobile networks in FY '26. And I mean, I'm not sitting here today anticipating, but the mobile business is dynamic. Customers make different choices. For example, 1 of the one-offs deactivating some SIMs that were sort of cover era. That's decisions made by customers to do that. So you can't quite anticipate those things. But Michael, I don't think we're anticipating there's not a big closure, but maybe is there anything you...

Well, the only thing I would raise, and you talked about it a little bit and Brad talked about it, is we've still got the remaining small business and consumer migration to go. It's a much, much, much smaller number versus the peak year of this year, but probably some of our most complex and difficult contracts. So I think we'll be keeping an eye out for managing that as we go into next year.

Yes. Thank you, that's a good point. And as we said, you sort of -- some of the toughest migration comes right towards the end. And -- we obviously work closely with our customers through that migration. But as you do that, we could well see some uplift in churn as we finish consumer and get well underway in getting into some of the more sophisticated services for our business customers through that migration as well.

The second question, in terms of how do we think about our mobile proposition. I'd say, look, first and foremost, for us, -- we have a leading mobile network and proposition, which our customers value to continue delivering on that. That does take ongoing investment, things like capacity into our network. -- further capabilities like the 5G advanced capability we're rolling out. We obviously also provide support to our customers through our stores, through our contact centers through the digital environment. So there's a lot of elements that we think about. Ultimately, what we think about is how do we deliver the best possible value proposition to our customers that sets us apart, but we've got to be able to keep investing on a sustainable basis to be able to deliver rightly to that high expectation they have in terms of the mobile products and services, the experience they have with us.

So they're the factors that really are front of mind for us as we consider any sort of changes in proposition for our mobile customers. It's absolutely around meeting their needs and ensuring we can keep investing to deliver at that high standard they expect from us. And then I'd say I'll come to Oli in just a second, can I just call out for the enterprise business. As you can see in the results, what's been really pleasing is the way Oli has led our enterprise team through the reset. We're not done. There's still more to do, and I'm sure he will touch on that. But I've just got to say the team have absolutely faced in to that real reset of the business. And you can see it now playing through. We've still got more to do, and that will play out through FY '26.

So -- but I've got to say progress on exiting NAS products, hard decisions on cost, which are never straightforward but absolutely have been essential to put the business in a better position and obviously very much focused on the portfolio, getting really focused back on what sets us about our part around core connectivity, and we've had the verse announcement this morning. why don't I hand over to Oli, just to give a little bit more color and detail.

Yes. Thanks, Vicki, for those words, and thank you, Bob, for the question. Yes, I am really pleased with where the business is at. Of course, there's always more work to do ahead. But if I look at where we are now compared to where we were 12 months ago, it does feel like we're in a very different place. We set out to be simpler, sharper and stronger and we're definitely heading in that direction. We took decisive action in a number of areas as Vicki touched on, and we've seen that flow through in the fixed enterprise line. .

The other point that I'd add is just how the customers have responded and they've reacted really positively to the changes that we've made, and we've seen our NPS scores uplift in year 2. So it's great to have that recognition from our customers along the way. We've welcomed some new customers. We've signed some existing -- or resigned some existing customers as well, the likes of Infox, CBA and Aussie Post to name just a few, so really pleased there.

In terms of just providing maybe a little bit of color around the number -- or behind the numbers and the changes that have taken place, Vicki touched on some of these. But we have launched a new operating model in enterprise, which is very much put customer at the heart of everything which has been great. Commercial guardrails is just front and center now. We continue to strengthen those, launch new sales incentive program. On product, and Vicki's touched on this, we set a commitment and a target to exit 2/3 of our NAS products. And we're well on the way there. We're just over 60% exited there. Cost base, we continue to stare at our cost base. We've made a number of changes across the business. We've seen workforce reductions. We made some announcements as well just last month.

And then finally, I've got a little bit of a smile on my face, albeit a bit of a tired one. We did announce as well our strategic partnership with Infosys as well overnight. As you know, we've been running a process there, what is the future of our tech services business. So really thrilled to announce that. So long story short, it's been a really big year. I'm pleased with progress. Michael spoke to it earlier, there are still headwinds in DAC in calling and we are managing those as best we can. But I feel we've taken a number of actions in the last 12 months, we're in a better place than we were.

Excellent. We'll go to our next question from Kane Hannan of Goldman Sachs. .

Guidance. as well just mobile margins, they returned to growth in the second half. You sort of navigate that cost allocation and all hardware revenue. Just as we think about '26 with those pricing benefits coming through, which obviously be accretive. Do you think the starting costs are significant enough to keep margins below 50%? Or are the other things I should be thinking about that sort of put a cap on mobile margins next year? .

Secondly, just with the intercity fiber buildout that went live in June, obviously, some pretty upbeat high-scale CapEx quarterly. Just remind your latest thinking around the buildup of that $200 million in earnings you're talking to whether you've factored anything into FY '26 there?

And then lastly, a lazy on D&A but given there is a range of numbers in the market. just you do have the incity fiber coming online, you do have the CapEx stand pie. Can you be any more specific around what D&A growth looks like next year, whether it's a 5% full year growth you did this year, the 2% second half growth rate, just as over the same page would be helpful. .

Excellent. Thanks, Kane. Thanks for your 3 questions. I'm going to get Brendan up in just a second as well because I know you asked a question on intercity fiber. And I think it would be helpful to have him provide a little bit more color about how we're tracking and what we're seeing. As you said, our first route live and the next route from Canberra to Melbourne Coastal not far off. So I'll get him up in just a second. In terms of mobile margins and second half growth and looking into FY '26, as Michael mentioned, as he spoke, we have launched our satellite to mobile service, which we're excited to have in market and pleased to see actually the way customers are using and adopting that extra layer of connectivity that it's providing for customers, particularly those that are traveling or living out in more remote areas of the country. .

I don't know, Michael, if you want to come back and comment at all on mobile margins and outlook there?

Look, I think the second half it was largely explained by a slower sort of third quarter, I guess, on hardware rather than anything else. And the satellite to mobile will be a headwind on mobile margins as we go into next year, as we explained, and it will really depend on how hardware plays out. I know we've -- we remain confident on selling hardware, and we sell it at a margin, so it's a good business. So we'll be chasing that as well. So yes, I think they are the 2 real swings. It's where hardware lands and a bit of a headwind from satellite to mobile. .

Yes. No, fantastic. And then I know on intercity fiber, you did ask about the earnings on that. We've turned on the first reach. We've got a lot more work to do to switch on more routes over the coming couple of years. So we see -- it's not until we get to FY '27, that we're probably fully complete on intercity fiber. And obviously, as routes come on, there will be a phase up. So that $200 million that we've referenced previously. I think when it comes to FY '26, not large contribution from that yet, that will be further down the track as we get all of the routes live and customer demand on board.

But why don't I hand to Brendan, and then we'll come back to Michael on D&A. So Brendan, intercity fiber.

Yes. Thanks very much, Vicki. -- massive year in FY '26 for intercity fiber. If you think of the build from FY '24 to '25, we had to double it, and we doubled the build again from FY '25 to '26 in terms of the kilometers. So by the end of FY '26, we'll be close to 10,000 kilometers in the ground. We're doing about just over 1 mini edge site upgrade or new site per week to support the new architecture. We will have a lot of new routes go live in FY '26 as well. So it's a very, very big and very significant year. Extremely pleased with the testing results we're seeing. A lot of our customers are very impressed and our first big terabyte orders are flowing. So a very exciting time and big year ahead in FY '26. Thank you.

Thanks, Brandon. Why don't we, Michael D&A, I think, was the last question. .

It was D&A, my favorite topic. So just from an ICF perspective, the great thing about the ICF assets is they're very long lived. So that impact on D&A is pretty immaterial to start with and will build up over time. But as I said, they're quite long-lifed assets, so that D&A impact is much less than, say, the impact of the rest of BAU CapEx. On the rest of BAU CapEx, as we talked about previously, we're investing in extra $800 million over the next few years in continuing to modernize and enhance our mobile capability, particularly around 5G advanced. So that will have an impact in D&A as well.

And I think you've seen the jump this year, and you should expect that some of that short life asset stuff will flow through over the coming years. I think the other 1 probably to keep in mind in modeling is just when the next round of spectrum comes into play and starts to impact amortization there in the outer years. So continued elevated D&A and some further impact of short life assets flowing through, but ICF a much smaller impact in the short term or medium term.

Okay. Next question is from Nicole Penny from Remo. .

FY sit ambition you've outlined the labor force will look markedly different by then a pause due to AI and automation. -- and we've already seen some tangible benefits in FY '25. Could you provide a more detailed update on AI implementation across different areas of the business and the key trends you're seeing and how it's reshaping roles and productivity?

And my second question is, putting mobile aside in the enterprise and government business, what are the competitive advantages that you see will protect Telstra's FY '30 emissions from the rapidly evolving global and nontraditional competitive fleet?

Excellent. Thanks, Nicole. I appreciate those 2 questions. I will get Oli to come back up in just a second, too, because I know this is a top or key loves speaking about is out with our customers a lot. And so I'll get him to make some comments around our competitive advantages in our enterprise business. .

But just in terms of looking at AI, it is obviously a big topic of conversation. And as we made, I think, super clear in our Connected Future 30 strategy, we see to remain a leader in connectivity. We've absolutely got to be a leader in how we apply AI inside our business. That's to make sure we continue to be efficient and effective to be at the forefront of providing connectivity for our customers. And so like many of, I'm sure the companies you're speaking to, we're pushing hard in terms of how we apply AI and adopt it. And that starts with our people. It absolutely starts with skilling. So we have our data and AI Academy with now more than 20,000 of our team have done at least 1 course in our Data and AI Academy. We're rolling out 21,000 copilot licenses. That's a big investment, but that's an investment in our teams to really gain that experience in how to apply AI in every job across our business. And when I say every job, I mean, every job, that's the expectation that all of us need to be adopting AI and how we operate.

In terms of some of the areas we're seeing it deliver benefits and real change, and we do have hundreds of AI use cases. getting used right across the business. I mean we've always had automation. We've had AI for a long while, but as we now get to generative AI and moving to a genetic AI and how we apply it. Our teams are absolutely pushing to be at the forefront of that. Some really good examples. Of course, like everyone, it's helping our frontline teams. It's helping our teams in terms of supporting and servicing our customers. But for us, 1 of the most fundamental areas where AI is and will continue to play a huge role is right in the heart of our business in the network. And ultimately, our goal is to get to more autonomous networks, why that's important. That's about making sure our networks remain even more resilient for our customers.

So things like the ability to predict to self-heal. We have some really good examples already rolled out, SmartFix is 1 of the applications we have of AI where it uses our network data. It uses the data of our smart modem for our customers who are on our broadband service. In the last year, through that work, about 2.5 million proactive actions were taken, which meant that, that meant customers got a more resilient experience than they previously had on their service. So keeping upping that anti on resilience for our customers. But we're seeing benefits. We're seeing our teams really adopt it and work out the best possible ways they can use it to make doing their jobs better. So it's something we're absolutely focused on. And our Accenture joint ventures stood up. We've been spending a lot of time with them and the team to make sure we're focused on the biggest priorities that can make a difference inside our business.

Oli, why don't I go to you to talk a little bit about our differentiation in our fixed enterprise business.

Yes. Thanks, Vicki. Thanks, Nicole, for the question. Yes. As Ricky said, I have the great pleasure -- we're spending a lot of time out there in the market with some of our amazing customers, both in the corporate sector, but also government agencies. And what I hear from them, what are some of the reasons why they like to really work with us and partner with us. First off, so much of it comes down just to the strength of our network, so whether it be mobile, whether it be fixed, whether it be satellite, which will come online in a not-too-distant future, they really just see that differentiation there.

The second piece where I can't get amazing feedback is just around our people. We have trust that's been built up over many, many years, and they're just so close and really work side-by-side with our customers hand-in-hand. Third up, just our delivery track record. We are there for our customers when they need us most. And again, that just goes back to the trust. Fourth, just our sovereign status. So that's really valued by many, especially at the top end of town. And then the final piece is just some of our plans as part of Connected Future 30 we've really worked through that strategy in partnership with our customers. They really value that and customer -- sorry, Connected Future 30 will very much give our customers what they are looking out for. So some of the functionalities will be bringing online as part of network as a product. It's really what our customers are calling out for. So just that relevance and how we're listening to what they need the most.

Thank you I also invite media on the call if you'd like to ask a question press star 1. We will take your questions after we complete the final 2 analyst questions. And our next question is from Nick Basile from CLSA.

And just have 1 question around the investment in Alio and direct-to-device capability this year. Is that investment still being framed as strategic CapEx? Or should we think about it more of a one-off? I guess, peers out there are also investing in that area at the moment. So just wondering whether that's still how we're thinking about that and also the outlook for further investment, I guess, '26 and beyond?

Thanks, Nick. And just to make sure I've heard the question, investment in LEO satellite services. .

Correct.

Right. Okay. Thank you. I mean, to provide those services on our side, we partner and obviously, SpaceX and StarLink big partners today for us in providing those services, both in terms of the home-based service that we've had in market for a little while, but also, as you said, we launched our satellite to mobile text messaging service. earlier this year. So on our side, the CapEx cost of that is largely around any product enablement to bring those products to market. obviously, SpaceX is the 1 investing the significant amounts of CapEx into launching those satellites and those constellations. But I think, Michael, from our side, that would be the main side for us in terms of that...

Yes. No, absolutely. And that's all in our BAU CapEx. It's all -- and so we -- for us, the cost of LEO SATS is effectively at our operating expenses going forward on our direct variable costs is a way to think about it. It does leverage -- obviously leverage our assets like spectrum. But yes, there's no CapEx for that?

Yes. And then the thing I would add, I mean, as we look, obviously, the world is moving fast when it comes to LEO satellites, and it's exciting to see that innovation. Certainly, in Brendan's side of the business in InfraCo, that's an opportunity because those satellite players all need ground infrastructure to support with that. And so Brendan and the team have been supporting many players with the rollout of their satellite ground infrastructure. .

We also have a partnership with ViaSat. That's been an important partnership, particularly for our mobile network with some of our more remote sites, so leveraging that capacity to provide what we call as the backhaul from those sites, so providing more capacity to improve the experience that our mobile customers can benefit from on some of those sites. So there is a lot going on in the LEO satellite side, but the big CapEx investments in those satellites are obviously being invested by those players. And -- but it's exciting. We love being at the forefront of being able to bring new technology to our customers here in Australia and launching the satellite to mobile service was an exciting milestone.

Go ahead, Nick.

Yes, it sounds like -- it's more on the OpEx side going forward. How material might that be over the next couple of years versus what it is in '26.

There's really very, very immaterial in '26. So it really -- in '25, sorry, it's very immaterial amount in '26, and it will ramp up in '26. And yes, and it's included in our guidance in terms of what we've said going forward at this point. .

Okay. And our final investor question comes from Phil Campbell from UBS.

Just a couple of quick ones for me. Just Michael, on the capital management, I was just curious as to when you're kind of writing the board paper and kind of recommending or looking at options in terms of buyback versus dividends, what are the principles involved in that? Because obviously, buyback, I think you said the previous buyback, the average was around [ 443 ]. Obviously, the stock is trading much higher than that now. So just be curious the principles around the around the buyback versus dividends? And then the second 1 was just checking that. I'm assuming the guidance does exclude the Versant sale today? .

Yes, correct. So just on that last question yes, guidance does not include the Versant sale. However, that will take some time. It doesn't happen immediately. We're working through -- obviously, there's a number of approvals -- we've said this morning, we would hope that we have completion on the sale of that 75% interest emphasis by March next year. So that could take a little bit of time. And I think as we've spoken about, that business contributes, I think it's around $400 million in revenue, but obviously, a services business, very different margin dynamics.

So I think, Michael, we're assuming that we'll be able to manage that transition inside our guidance. So we're not expecting at this point any big adjustments. So we're thinking about that transition won't happen for a few months yet. Hopefully, those approvals come through quickly, but we're not expecting that to have any significant impact at this point. And Michael, do you want to touch on capital management.

Sure, I can, yes. And on the versansale, as Vicki said, we would -- completion, I think we said by March. So we'll -- the impact in the year will be fairly small. And I think within our sort of opportunities and risks across our business, we would look to deal with that within our current guidance is our current view.

So just sort of stepping back on how we think about capital management and how we sort of step through that with the Board. So step 1 is that we want to -- we -- the discussion with the Board is about a sustainable and growing dividend. So we think about sustainability of that dividend level and our ability to grow that as a really important input and that has regard to our forecast for cash EPS and our forecast for EPS as well. Our preference is fully franking. And then if we can't grow it at a fully frank level, as we've said, we'll -- obviously, we will consider unfranked dividends as we look at that. But our objective on the dividend is sustainability and predictability and that outlook.

When we think about buybacks, once we've sort of stepped through our liquidity position after we've considered all of the investment opportunities, both in the short term and the medium term that the business is looking to. We assess -- we then come to our buyback as we look at from a liquidity perspective. And we're looking at a few things. We're looking at how do we I think the stock is currently valued versus how we would value it based on our outlook. And then we also look at whether it's accretive which is obviously determined by the price but also in effect, the cost of debt. I mean, this is a capital management play. So you're looking at how do you lower your overall WACC through buybacks.

So as long as they're accretive, if they're no longer EPS accretive, i.e., the cost of debt to fund that buyback on a counterfactual is more than the upside of removing shares on issue, then we'll trade it off. So it's really -- we start with that growing dividend and the sustainability of that. We work through all of the investment opportunities that the business has and then we look at our liquidity position, then we assess effectively whether the buyback would be accretive and at what prices it would be accretive.

Thank you. That's our last investor and analyst question. I'll hand over to my colleague, Steve Carey, who will moderate the media Q&A. Steve?

Thank you, Nathan, and thank you to all the analysts for those questions. We will now move to the media Q&A for our results in this session. We have CEO, Vicki Brady and CFO, Michael Ackland. who will address the questions for the media. [Operator Instructions] And the first question today comes from Jared Lynch from the Australian.

Just looking at the paid subscriber numbers, the 106,000 looks like that's all come from a wholesale level rather than Telstra Retail. So I was just wondering, what is Telstra's strategy to mitigate the impact of this increased competition on subscriber numbers and market share beyond relying on network preference, are there any specific pricing product or bundled offerings being considered to get more people back into the Telstra brand?

Thanks, Gerard, for your question. And I'd say, as we've talked a little bit about this morning, there's quite a few moving parts in terms of our customer numbers in our postpaid business that we've reported today. When you dig through that, we've seen strong growth, yes, in our wholesale business, but also strong growth in our consumer business as well, and that's across our branded and belong business. So we have seen good growth there as well in our postpaid business.

And as we look at how do we show up for our customers, what do they value, when it comes to our mobile proposition, absolutely, the strength of our network is a big part of the equation as we step into Connected Future 30 we're very much focused on network as a product. So how do we keep innovating in terms of the connectivity and the needs of our customers. And so -- we're excited by what's ahead of us. Our mobile business is in a good position. We never take that for granted, and that's why we continue to invest like our $800 million extra investment into our mobile network to deliver 5G advanced. Our customers will start feeling the impact of that as we switch on some of that capability towards the later part of this year where customers will feel better speeds again. I feel a greater experience and more resilience in our 5G offering market.

So we're never complacent on it, Jared. We know we've got to keep delivering and innovating for our customers in our mobile business.

And I just had a follow-up question on AI. When you said the expectation is for all staff to AI and their workflows. How do you go about that getting people to use every day? And what are sort of the tip that you get them to sort of start to augment their workflows with this new technology? .

Yes. Thanks, Jared. I mean, our approach has been very much through investment in our Data and AI Academy. So providing the learning tools there. And we've seen more than 20,000 of our people do at least 1 course in our Data and AI Academy, which is fantastic. We've also rolled out copilot licenses, so 21,000 copilot licenses because 1 of our early lessons here was you can learn the theory of it that you've got to have that practical hands-on ability to try it, to use it, to figure out how it can deliver benefits for you.

So -- and 1 of the best ways I've certainly found in many of the conversations I'm in our teams actually sharing their tips and tricks of how they use it makes a great difference for me, 1 of the tips I heard recently, which was fantastic. One of our enterprise team had a very deep report that they sourced from an analyst on the market and what was going on and they used copilot to produce a podcast. So being able to listen to a 30-minute podcast rather than troll through hundreds of pages of a report. So some of those tier are definitely the things that we're finding is working. And we're absolutely finding our teams really curious and eager to learn, and I think that's represented in the amount of our team members that are doing courses in our Data and AI Academy and also in the activity levels of our copilot usage. So yes, everyone is learning and definitely tips and tricks help.

Jared, can I just -- sorry, Vicki, can I add something just on the your point around the mobile services. The 106,000 is just prepaid and it is retail. There's an additional 217,000 of ads in wholesale. So that the wholesale and is in addition to the 106,000 after the one-offs in postpaid. In postpaid yes. Now in our retail prepaid yes, -- just to clarify. .

Yes, because I think you said prepaid, I think you make it postpaid.

Postpaid. I apologize is -- that was super helpful, Jared, for me there. Yes. That was really clarifying..

How do you go Jared, is that...

Postpaid retail 106,000 wholesale, largely prepaid 317,000

Yes. Thank you.

Thanks, Jared, and thank you for clearing that up, Michael. Next up, we have David Swan from 9 Metro publishing The Age and The SMH. Please go ahead, Dave. .

And congrats on the results. So if that's the chart pre quick ones if you'll indulge me. Vicki, you said this morning, we needed a national spectrum strategy to unlock investment I guess what's wrong with the current status quo? And how is that impacting Telstra's ability to invest. Secondly, I wanted to ask about similar to Jared, I get the mobile numbers they might have disappointed the market this morning given the share price movement so far. I want to ask, I guess, to what degrade the network sharing agreement between CPG and Optus might have impacted the mobile numbers and what your expectations are of I guess, just the success or otherwise of that going forward. And I wanted to ask, if I can, about Vicki, particular, if you have any thoughts on a 4-day work week, that's been a bit of a point of discussion this week .

Thanks, Dave. Three questions. So let's work through those. So thank you for that. Firstly, yes, I did mention this morning, I think having a national spectrum strategy is critically important. When you look at the country today, and how people rely on mobile services, whether it's for work, for business, whether it's education, personal connections, accessing government services, it's such a fundamental element of enabling how people access technology and operate their daily lives. So from our point of view, certainty on spectrum renewal is absolutely critical. .

If you think about the 3 mobile networks in the country today, about 80% of the spectrum that those networks rely on will come up for renewal through 2028 to 2032. So they are long-term investments. So certainty of spectrum renewal is absolutely critical to unlock and make sure we're making the most of those mobile networks.

And the second thing I'd say is I think there is an opportunity to look at spectrum across the country and potentially the next digital dividend in terms of how we might be able to unlock more spectrum into mobile to help really provide that foundational mobile network capability that the country is going to need to rely on to play a part in really unlocking productivity and making the most of technologies. So Yes, I do think a national spectrum strategy could make a real difference in delivering the best possible anomic and social outcomes for the country.

The second one you asked about was the mobile numbers. And there is a little bit of noise in the mobile numbers that we've reported today. It has been a really dynamic period. in mobile. So we had 3G closure. We have also had some things inside our postpaid numbers that have impacted. We've had some reclassification of postpaid services largely out of mid-market and enterprise into IoT, and we have had some deactivation of SIMs in our enterprise business that relates sort of to back to the COVID era. So when we step back, and look at our postpaid business, in particular, our consumer postpaid business, we've actually seen strong growth in the year in our postpaid business. The second half has been a very competitive and dynamic period. There is no doubt the network sharing deal switching on is a change in the market. But we're pleased with how we've competed and traded through that period, and we're also pleased with how the trading momentum is looking for the early part of this financial year.

So a very dynamic period. inside our mobile business. We've also been very busy migraine customers to our new digital stack in our consumer business. So we migrated more than 3 million customers over FY '25 with only now 150,000 of our 7.7 million consumer customers due to be migrated. So lots of noise in terms of some of those things, but overall, we're really pleased in terms of how our mobile business performed in FY '25.

And then the final point, I know there is a lot of ideas getting put on the table ahead of next week's economic reform round table. I think it's great. Firstly, I think it's great. There's a national conversation going on. on what is it going to tap to lift productivity in the country. I think it's excellent that there's lots of ideas being put on the table. From our perspective at Telstra, we've had a strong support for flexible work as part of our employee proposition for a long period now, even predating COVID. So for us, we have a very diverse workforce. We have teams out constructing network. We have teams out in the field, maintaining and supporting customers and our network. We obviously have teams in stores, in retail. We have contact centers, we have office staff. I could go on and on. We've got a very diverse workforce.

And so for us, flexibility is key, and it does look different by different teams. We do have teams that regularly work 9-day fortnights. We have people that will adjust rosters to be able to best fit with their needs, and we have hybrid working for our office-based staff as well. So I'm a firm believer that this is something that you absolutely have to work through for it as a business and for us, flexibility and hybrid working core parts of how we operate.

Our next questions are from Jenny Wiggins from the AFR. Go ahead, Jenny. We can hear you, Jenny, please go ahead.

I just follow up to David's question. The 2 executive of AT&T in the United States. -- when he made his comments a week or so ago talking about getting staff back to the office side days a week, you also made reference to needing to develop a more market-based culture. We've also seen that the Westpac talk about management needing to be more aggressive, scheduling meetings on the weekends and so on. So I take your point about Telstra being committed to a flexible and hybrid working environment. But as Telstar does try to become more efficient. I mean, are you also trying to, I guess, create a more, I don't know how you describe it aggressive or dynamic culture among management? Do you think people actually need to work harder, even if it is still flexible to be more productive?

And then I had 2 other questions. Just with regards to the changes on postpaid. I didn't quite understand what you meant when you talked about the end of COVID era, if you could just explain that, please. And then with regard to satellite to text messaging, can you tell us how much that is actually costing Telstra? And also how many people have actually used those satellites to take message services today.

Thank you. Thanks, Jenny, for that. Quite a few questions to cover off there. So just when I think about Telstra's culture, -- and obviously, having a culture that is going to set the organization up for success is absolutely critical. So in our case, flexible working is absolutely part of how we operate and bringing the best out in our teams. As we've stepped into our next strategy, Connected Future 30, one of the things we're absolutely focused on is you want to make sure you've got a high performance culture. And what does that mean? That means that we're delivering on the outcomes for our customers. We're delivering on the outcomes to support our teams. We're delivering on the overall business outcomes as a business.

So that's something that runs very much through Telstra. We've been focused on that for some time. But as we step into connected Future 30, we've got to keep innovating. We've got to really radically innovate in the core of our business. So -- there are some of the things we're focused on. So for us, flexibility is a core part of how we operate and hybrid working, I would say, for me, it's 1 of those things I think people say, "Oh, have you got the balance right? You're constantly looking to be brilliant at hybrid working. And that looks different for different teams across our business, but absolutely, some time together face-to-face is part of that in bringing, I think, the best out of teams and working across our organization, but absolutely flexible working. We want to be high-performing. That's what we aim to be. And with that, you've got to be competitive in market. And so yes, we focus on making sure we can deliver for customers, we can drive efficiency and do it in a way that brings out the best in our teams by providing flexible options in terms of working.

Just on our postpaid numbers, Jenny, yes, there are a few moving pieces in it. And we spoke about this morning, 1 of those areas was some of our enterprise customers had SIMs in place that they put in place through COVID. And as they've gone through work to simplify their portfolio or their fleet of services. We have seen some deactivations in the half for those SIMs. I think from recollection, it was around 64,000 and is largely in our enterprise business where we saw those. Jennie said, that's what they relate to. They were services put on through COVID that now subsequently, customers have been through and have deactivated them out of their fleet of services with us.

Then finally, on satellite to mobile, it's been exciting to have the satellite to mobile text message service launched. Any costs associated with that, as you would appreciate, our commercial and confidence. In terms of what we're seeing, what is exciting, on average, every day, we see about 90,000 devices connect to our satellite to mobile service. So -- we've been really pleased and feedback from customers on the service has also been very pleasing that ability to have that extra layer of connectivity when you're outside our mobile network. So exciting to have that in market.

Our last caller for the day is Rohan Pearce from CommsDay.

Lucky last. Just a quick one. Do you kind of see opportunities to grow SIOs in the consumer and small business mix space again. I think Brad made a comment along the lines that you had a kind of ambition to increase your NBN subscribers. And I guess the other thing is just -- what do you see in terms of potential for more ambient churn around the lot accelerate rate?

Okay. So first off, as Brad spoke to this morning, we've had a very big focus, obviously, in our fixed consumer and small business side of our business to make sure we can run that business on really sustainable margins. And the teams have done an excellent job over the last few years of continuing to drive improvements there. As you call out, we have been losing, however, customers. And ultimately, that's to have a business operating sustainably over the long run. Of course, we'd like to see that stop so that we're back to a position of holding customers or growing customers to some extent. .

But right now, we still have work to do in that business, as Brad spoke about this morning and the team are working hard on many propositions to appeal to our customers. We do have a new smart modem coming very, very soon, I believe, and that will take customers to WiFi 7. So a core part of our proposition is particularly with the nbn changes coming up in September where we will see those significant step-up in speeds for many customers. It really reinforces how important it is to have a high-quality modem to be able to access and enjoy those step up in speed that will be delivered through those NBN changes. And look, I think the NBN market is a dynamic and competitive market. And we would expect with these next round of changes, I'm sure that will continue to be the case.

And I know Brad and the team working very hard on making sure we shop and compete in that environment. And delivering for existing customers and looking to attract more customers to our broadband business as well over time.

Thank you, Ryan, and thank you to all the media and the analysts that joined our call today and invested time in their questions. Thank you to Vicki and Michael and our executive team for addressing the call. This now wraps our call for our full year results presentation. Thank you all for joining us.