Facing slowdowns in both its Australian and Hong Kong markets, Telstra reduced its outlook for 2010. Coming on the heels of a challenging 2009, Telstra expects that FY 2010 revenues will remain "flattish" versus its previous forecast of "low single digit" growth.
What's contributing to Telstra's lower-than-expected growth are four factors: the strength of the Australian dollar, challenging operating conditions in Hong Kong, increased domestic wireline competition driven by Unbundled Local Loop (ULL) growth and consumer wireless substitution. However, the service provider said it will reach its $5.27 billion free cash flow target this year.
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