Telstra said on Thursday that it expects to deliver mid-single digit income growth and low-single digit underlying earnings growth for the year ending June 30.

Free cashflow is expected to be between $4.6 billion and $5.1 billion and capital expenditure to be around 15 per cent of sales to fund increased mobile network investment.

Capital expenditure as a percentage of sales was 15.2 per cent in the first-half of fiscal 2016.

Telstra booked a net profit of $2.09 million for the six months ended December 31, after a 7.6 per cent rise in revenue was offset by rising operating expenses.

That compares with a net profit of $2.09 billion for the same period a year earlier, which was aided by a drop in finance costs.

Still, total income excluding finance income jumped 9.1 per cent to $14.2 billion in the first half.

Mobile revenue rose 3.7 per cent to $5.5 billion, but declined 1.5 per cent to $3.6 billion for the telco’s fixed line business

Chief executive Andrew Penn said the results were achieved against increased mobile competition and acceleration in the NBN roll out.

“We have continued to innovate and develop products and services to meet changing customer preferences and expectations in our fixed and mobile businesses,” Penn said.

“We are actively working to simplify our business, drive down costs and help our customers experience what technology can do for their lives and businesses,” he added.

Revenue rose 7.6 per cent to $13.68 billion from $12.72 billion a year ago.

Telstra declared an interim dividend of 15.5 cents, up 3.3 per cent from a year ago.

AAP