Telstra shareholders hoping for another $1 billion windfall from the company this year could be disappointed as the telco funnels cash towards new acquisitions and its mobile network.
The telecommunications giant is expected to post a steady-as-she-goes full year profit result, somewhere around last year's $4.3 billion, with underlying earnings up by a few percentage points.
Analysts also expect the company to keep its final dividend flat at 15 cents per share.
But the more pressing question for Telstra's retail shareholders is what new chief executive Andy Penn plans to do with the company's multi-billion dollar cash pile.
More specifically, will he do what his predecessor David Thodey did last year and reward shareholders with a share-buyback?
At its 2014 results, Telstra announced a $1 billion share buy-back, which helped lift the company's share price by reducing the number of shares on issue.
But Morningstar analyst Daniel Mueller says Mr Penn is likely to want to keep his powder dry to fund new acquisitions and invest in the company's mobile network.
"I think Telstra is going to be fairly cash-hungry over the next few years," he said.
"I can see the need to use cash flow for reasons outside of a buy-back. I think they are going to need that cash for Capex and acquisitions."
Mr Penn has already announced Telstra will spend an extra $500 million on its mobile network, taking the total spend to $5 billion over three years, in an effort to stay ahead of rival Optus.
Optus has announced it will spend $1.7 billion on its network in the next year as it looks to chip away at Telstra's dominance of the mobile market.
That dominance also means Telstra has relatively little space to grow in Australia and is one reason the telco is on the hunt for acquisitions in Asia and at home in areas like e-health.
But, Mr Mueller said, further share-buybacks are likely over the next decade as the telco passes on some of the billions of dollars in payments it is receiving from the national broadband network for its copper network.
Investment bank Credit Suisse expects Telstra to spend around $5.5 billion on buybacks between 2017 and 2022.
"Over the longer term, I'd say it's definitely on the cards," Mr Mueller said.
Telstra shares were down seven cents at $6.24, having climbed 16 per cent in the past year.
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