Net profit after tax fell 26.2 percent to A$3.18 billion (US$2.42 billion). Last year Telstra's after-tax profit was A$4.44 billion.

Telstra CEO Sol Trujillo said building the 3G network and broadband is key to the future growth of the carrier. Revenue from retail broadband grew 58 percent to A$730 million in FY 2006, up from A$463 million.

The carrier noted a 3 percent market share gain in broadband and postpaid mobile (1 percent). Revenue growth is around 3 percent in total.

However, his comments follow an announcement earlier this week that Telstra has scrapped plans for a A$4 billion national high-speed broadband network after reaching an impasse with regulators over how to charge rivals for access.

A 10,000 to 12,000 headcount reduction by 2010 is also on the cards, as well as a "platform rationalization" project to reduce IT complexity.