Background: Telstra is Australia’s largest telecommunications provider, servicing 25.5 million retail mobile services nationwide. With nearly one mobile service per Australian, its scale gives it a dominant position in the domestic market.

What happened: Telstra’s share price rose more than 4% after reporting its half-year results. Revenue was largely flat, but its profit really did the heavy lifting. Net profit increased more than 8% to $1.2 billion. The reason? The Big T's labour costs fell 9%, following 650 job cuts.

What else: At the same time, Telstra increased prices on its post-paid mobile plans — without losing customers. In fact, mobile customer numbers continued to grow- a very strong signal of pricing power.

What's the key learning

💡Pricing power is a company’s ability to increase prices without losing customers in large numbers. It is one of the most powerful competitive advantages in business because it allows companies to defend margins even when broader revenue growth is limited.

💡Strong brands and essential services support higher prices. Telstra lifted postpaid prices, grew Average Revenue Per User (ARPU) by 4.8%, and still managed to add more than 580,000 customers. So it seems like Telstra customers are willing to absorb higher costs.

💡A similar strategy has been used globally by Apple with the iPhone. Apple has steadily raised iPhone price each year, while maintaining strong demand because of brand loyalty and ecosystem lock-in.