Updated February 14, 2019 12:11:12

Photo: Telstra CEO Andy Penn says the company's circumstances are very different from before the NBN. (News Video)

Telstra's half-year profit has tumbled 27 per cent as the telco feels the full force of the NBN taking away its wholesale fixed-line customers.

Australia's biggest telco reported a 4.1 per cent slide in pre-tax revenue to $13.8 billion, interest profit was off 16.4 per cent to $4.3 billion, while the legal measure of net profit after tax dropped to $1.2 billion.

Telstra has further slashed its interim dividend to just 5 cents per share, with an additional 3 cents of special dividend, taking the total to 8 cents.

That is 27 per cent lower than the half-year dividends paid last year, and well down on a peak half-year dividend of 15.5 cents.

Despite this, the company's chief executive, Andy Penn, said he was, "very positive about Telstra's prospects for the future".

"Demand for telco products and services continues to grow and telecommunications infrastructure is only going to increase in importance over the next decade," he said.

"Telstra's circumstances today are very different from what they were before the NBN.

"We are no longer the national wholesale provider. That part of our business — the revenue and value — is being transferred to the NBN and that is reflected in our income, profit, and dividends."

Telstra and other telcos are planning a massive rollout of their latest 5G mobile networks, but analysts say they won't make broadband obsolete.

Mr Penn said the company was seeking to address the loss in revenue through its "T22 strategy to cut costs", "digitise the business" and invest in future networks, such as 5G mobile.

"Thanks to our new partnership arrangements with a series of leading manufacturers, 5G devices will be available exclusively through Telstra before any other Australian mobile operator when they are released in the first half of calendar year 2019," Mr Penn said.

"Telstra's global leadership on 5G will help ensure mobile is the engine room of our business into the future."

Telstra cuts 3,200 out of a planned 8,000 jobs to go

Telstra last year announced an aggressive cost-cutting strategy to help offset the loss of revenue to the NBN.

Telstra will have shed about half its workforce in just over a decade, but can it shrink its way to greatness?

The company said its underlying fixed costs were down 4.2 per cent, or $162 million, in the first-half of this financial year, with nearly $900 million a year in cost savings achieved over the past three years.

Mr Penn said 3,200 people have now left Telstra out of a targeted staff reduction of 8,000 full-time positions by financial year 2022.

"This for me is by far the hardest aspect of the changes we have to make," he said.

"I feel deeply when people are impacted personally and I am committed to both be transparent with our teams on what this means and to provide all the support we possibly can for people affected."

Telstra noted more than 1,500 of the positions cut were management or executive roles.

Elysse Morgan speaks with Telstra CEO Andy Penn one-on-one for The Business, tonight on ABC News Channel at 9:45pm (AEDT).

Topics: telecommunications, company-news, australia

First posted February 14, 2019 09:49:06