Australian telecommunications giant Telstra Corp. on Friday launched a third-generation network it says will reach 98 percent of the country and cover the largest geographical area of any such network in the world.
The announcement comes ahead of the government's sale of its remaining 51.8 percent stake in Telstra, which has seen its share price plunge nearly 50 percent over the past five years.
The A$1 billionr (US$746,000; euro586,000) network was built in 10 months, and offers high-speed wireless mobile and Internet access to many areas of the country not currently served by other broadband networks, Telstra Chief Executive Sol Trujillo told an investors forum on Friday.
Trujillo said the rollout, called NEXT G, will allow the embattled telecommunications company to claim leadership in the third generation, or 3G, market by May 2007.
The company also announced that its earnings forecast before interest and tax was expected to grow by 2-4 percent.
Telstra said Telstra expects earnings before interest, tax, depreciation and amortization to grow by 2-2.5 percent per year through the next four fiscal years to June 30, 2010. That's down from its previous guidance of 3-5 percent per year through fiscal year 2009-10.
Analysts said the data do not bode well for the government's sale of its third and final stake, dubbed T3.
"You can use all the smoke and mirrors you like, but they're operating in a highly competitive space, with shrinking margins," said David Halliday, associate director of Macquarie Equities.
The company's stock last traded at A$3.77 (US$2.81; euro2.21), around half the A$7.40 (US$5.52; euro4.34) price at which the government sold its last packet of Telstra shares in 1999.