Australia’s largest telecom operator Telstra announced today it will buy back shares of up to AUD1 billion (US$930 million) and increase its dividend for a second time this year after its net profit for fiscal 2014 jumped 14 per cent to AUD4.3 billion and revenue rose 3.5 per cent to AUD25.3 billion.

The share buyback will be funded from the sale of its stakes in CSL in Hong Kong and local directories business Sensis, as well as its improved financial results over the past three years.

The company increased its dividend for the second half of the year to 15 cents per share, for a total dividend for FY14 of 29.5 cents.

The company’s EBITDA increased 9.5 per cent to AUD11.1 billion and earnings per share rose by 14.3 per cent to 34.4 cents.

Telstra added 937,000 mobile customers over the last year and now has 16 million retail subscribers, while mobile revenue grew 5.1 per cent to AUD9.7 billion. The operator now has 5.2 million mobile devices on its 4G network – 3.8 million handsets and1.4 million mobile broadband services.

Over the past four years its market share has grown from 41 per cent to 53 per cent – taking share (based on GSMA Intelligence figures) from Vodafone Hutchison (13 percentage points) and SingTel’s Optus unit (3 percentage points). Optus lost 126,000 mobile customers over the last 12 months and how has 9.4 million subscribers.

Revenue from its fixed business fell 0.8 per cent overall; fixed voice revenues fell 7.5 per cent while fixed data revenue grew 6.3 per cent.

CEO David Thodey (pictured) said the company is investing AUD1.3 billion next month to secure the largest holding of 700MHz and 2.5GHz spectrum to improve the speed and capacity of its 4G network. “Our mobile network already offers four times the 4G geographical coverage area of any other 4G mobile network, providing coverage to 87 per cent of the population.”

Telstra plans to invest about AUD1 billion in its mobile network in fiscal 2015.

Thodey expects continued low single-digit revenue and earning growth to offset the loss of revenue from CSL. As a result, he said Telstra’s earning and revenue guidance for 2015 is broadly flat. “Telstra expects 2015 free cashflow of between AUD4.6 billion and AUD5.1 billion and capital expenditure to be around 14 per cent of sales.”

Telstra’s stock rose to a 12-year high earlier today, hitting AUD$5.56 per share.