Typing this while sitting inside a cafe away from the swelter so...

Typing this while sitting inside a cafe away from the swelter so just throwing in some high level comments.

For fixed broadband and fixed line services, telstra's margins = revenue (direct and wholesale) + uso - cost of maintaining network - uso cost.

They are limited as to how much they can charge from a revenue perspective (i.e. ACCC) while segment of their business loses ground while maintenance cost increases.

While they transition across to NBN they are gradually losing the cost of maintaining the network while also losing the USO payments. However, in the mean time, they receive a once off $2-3k per existing customer when they are transitioned across to NBN, plus they get the first shot at signing the customers up post-transition.

For the past ~2 years they have been quite aggressive at retaining fixed line / cable customers and are willing to discount heavily because they get this fee if the connection gets transferred when they are a Telstra customer (applicable to other service provides too). That fee is equivalent to 1-2 years of revenue per customer and they're receiving that as an additional income!

In the NBN world, the margin is largely determined by scale which is where the CVC cost comes into play. The larger the customer pool the lower the average CVC cost per customer, and that is why Telstra should be able to compete significantly better than anyone else. It is a chicken and egg issue as you need the customer base first - acquiring customers post-NBN means they don't get the once-off disconnection fee and will have to spend money on customer acquisition. We all know the old adage that it cost more to acquire new customers than to retain existing ones.

In the midst of all this, being the dominant telco they just want to quietly get on with it and not make any waves to keep media off their backs - until the scale tips towards their favour where they can divert all finger-pointing to NBN and the additional income from NBN becomes the elephant in the room. (e.g. possibly this reporting season).

Fingers crossed we'll have a good update on the 16th and good luck to all holders & non-holders. ;-)
It could well be just as bland as the last couple reporting seasons.

DYOR.