Telstra Group Limited (ASX:TLS) provides telecommunications and digital infrastructure services across consumer, Business and enterprise markets. FY26 delivered higher earnings, continued mobile customer growth and further Investment in network infrastructure. At the same time, Telstra increased its Dividend and announced another share buy-back, illustrating how the group is balancing infrastructure spending with Shareholder returns.

Reported Earnings Increase

Reported EBITDAaL increased 3% to A$8.2 billion in FY26.

Net profit after tax rose 2.7% to A$2.4 billion, while reported Earnings Per Share increased 5.3% to 19.9 cents.

Underlying EBITDAaL increased 4% to A$8.3 billion.

Cash EPS rose 14% to 25.5 cents, while underlying return on invested Capital increased 0.5 percentage points to 9.0%.

Mobile Remains the Core Growth Driver

Mobile service Revenue increased across Postpaid, Prepaid, Wholesale handheld, mobile broadband and Internet of Things services.

Telstra also recorded average revenue per user growth across its mobile categories, brands and customer segments.

Mobile users increased by more than 270,000 during FY26, representing growth of 1.9%.

Continued mobile growth remains important because the division is a major contributor to Telstra’s group earnings and cash generation.

Network Investment Supports Mobile Position

Telstra continued upgrading its mobile network during FY26.

Nearly 1,200 mobile sites received 5G Advanced capability.

More than 150 new mobile sites were built, while over 1,800 network sites were upgraded with back-up power.

The investment forms part of Telstra’s Connected Future 30 strategy, which places connectivity and network resilience at the centre of its longer-term operating plan.

Customer Measures Improve

Telstra also reported improvements in customer-experience measures.

Strategic Net Promoter Score increased to +20, while Episode Net Promoter Score reached +49.

The company said these were its highest year-end results since it began measuring the indicators.

Customer retention and service experience remain relevant to Telstra’s ability to sustain subscriber growth and mobile revenue per user.

Aura Network Passes Halfway Point

Telstra continued construction of its Aura long-haul fibre network during FY26.

More than 8,500 kilometres of fibre had been installed by August 2026, with six routes ready for service.

The project was more than halfway through construction.

Aura is designed to provide high-capacity connectivity for data centres, cloud providers and other customers requiring large volumes of data transmission.

Long-Term Infrastructure Contracts Support Aura

Telstra has signed long-term digital infrastructure agreements involving its Aura Network, subsea cables and long-haul fibre assets.

Customers disclosed by the company include Google, AWS and Firmus, with Microsoft described as Aura’s foundational partner.

The agreements support Telstra’s expectation that Demand for digital infrastructure will rise alongside cloud computing, artificial intelligence and data-centre expansion.

Contract values have not been disclosed.

Aura Targets Mid-Teens Returns

Telstra continues to target a mid-teens internal rate of return from Aura.

The company expects a cash payback period of around nine years.

These are management expectations rather than realised returns and depend on customer demand, construction execution, operating costs and future contracted revenue.

Aura therefore represents a long-duration infrastructure investment rather than an immediate earnings contribution.

Strategic Investment Estimate Increases

Total strategic investment between FY23 and FY28, including Aura and the Viasat projects, is now expected to be approximately A$1.8 billion.

This compares with the previous estimate of around A$1.6 billion.

Telstra attributed the increase to inflationary pressures and project-specific factors.

For FY27, strategic investment is expected to decline to between A$200 million and A$300 million.

Dividend Rises to 21 Cents

Telstra declared a final dividend of 10.5 cents per share.

This took total FY26 dividends to 21 cents per share, representing a 10.5% increase on FY25 on a cash basis.

The final dividend comprised 9.5 cents franked and 1 cent unfranked, making it 90.5% franked.

The final payment was made on 24 September 2026.

Another Buy-Back Is Underway

Telstra completed its A$1.25 billion on-market share buy-back in June 2026.

The company subsequently announced a further on-market buy-back of up to A$1 billion.

Telstra said the program is intended to shift its Capital Structure toward more Debt and less Equity while improving funding efficiency.

The buy-back is proceeding alongside higher network Capital Expenditure rather than replacing infrastructure investment.

FY27 Network Spending Is Set to Increase

Telstra expects FY27 underlying EBITDAaL of A$8.5 billion to A$8.8 billion.

Business-as-usual capital expenditure is forecast at A$3.35 billion to A$3.65 billion, reflecting increased network investment.

Cash EBIT is expected to range from A$4.75 billion to A$4.95 billion.

These targets depend on continued earnings growth, cost discipline and execution of the Connected Future 30 strategy.

Fixed and Infrastructure Businesses Continue to Evolve

Telstra reported higher EBITDA in Fixed Consumer and Small Business, supported by cost management.

The Fixed Enterprise business continues to be reshaped around core connectivity services.

International Wholesale and Enterprise is also increasing its focus on digital infrastructure.

These changes are intended to simplify the portfolio and direct investment toward areas where Telstra sees greater long-term demand.

Key Risks and Areas to Watch

Competitive pressure can affect mobile subscriber growth and revenue per user.

Aura carries construction, customer-demand and return risks, particularly after the strategic investment estimate increased.

Higher network spending also requires continued cash generation to support dividends and buy-backs.

Network resilience, regulation and execution across fixed enterprise remain additional considerations.

FY27 mobile growth, Aura construction, capital spending and progress on the new buy-back will therefore remain important indicators.