Analysts expect Telstra to deliver another round of solid results on Thursday on the back of strong growth in its mobile business, with the telco picking up more subscribers against the backdrop of a slowing market.
The mobile division is the largest money-spinner for Telstra, which earned $4.3 billion in revenue in the second half of last year.
The company's position as the largest mobile carrier in the country and the low operating cost of its 4G network are drivers behind its high margins.
Deutsche Bank analyst Vikas Gour expects Telstra to have picked up 1.2 million new mobile subscribers over the financial year, a strong result against the background of a saturated market with one of the highest mobile penetration rates in the world.
Telstra's strong growth in mobiles has been achieved at the expense of Vodafone, the third-largest carrier in Australia, which is still trying to repair its damaged brand from its well-publicised failures a few years ago.
Vodafone lost 551,000 customers in the first half of this year.
However, analysts doubt whether Telstra can continue to grow at such pace. Mr Gour estimates the telco's mobile revenue growth will have slowed from 7.3 per cent last year to 2.9 per cent.
On the all-important issue of the company's dividend, most analysts expect Telstra to maintain its fully franked payout at 28¢ a share.
The company has been paying a 28¢ fully franked dividend since second half of 2006.
Mr Gour expects Telstra to wait for clarity about the NBN payments after the election before it decides whether to increase its dividend.
The telco is also likely to face twin headwinds from the declining fixed line and Yellow Pages business units.
Revenues from Telstra's copper network have declined at a rate of about 5 per cent a year for the past eight years and that accelerated to about 10 per cent in the first half of this year. Analysts expect this trend to continue .
The Yellow Pages directory business, once a cash cow for the company, is in the midst of a transition to digital .