Australia's telecommunications giant Telstra (AZX: TLS) today announced a 4.7 per cent decline in full-year net profit and forecast lower earnings in the year ahead.

The company's net profit for the year to June 30 slid to $3.88 billion from $4.07 billion the previous corresponding period.

Revenue decreased by 2.3 per cent to $24.92 billion, and earnings before interest, tax, depreciation and amortisation (EBITDA) edged down 0.9 per cent to $10.85 billion.

The telco paid a final dividend of 14 cents per share, compared with 14 cents last year, to bring the total annual dividend to 28 cents.

Telstra chief executive David Thodey admitted this morning that the telco has been losing customers.

''Today the greatest asset that Telstra has is our customer base and we have been losing too many customers,'' he said.

''I am not going to allow it to continue.''

Mr Thodey said Telstra had decided it was in the best interests of shareholders to concentrate on sustainable growth.

''In the coming year, we must prepare Telstra for the future, invest to take advantage of new revenue streams, and utilise our upgraded IT systems and networks to further improve customer service and satisfaction. These investments will be selective, carefully targeted, and rigorously monitored to ensure they serve the long-term interests of customers and shareholders.''

According to the telco giant, 2011 will be a "transition year" where investment is to be made to prepare Telstra to compete in the future.

Customer base growth and revenue, however, are forecast to be "flattish".

EBITDA is predicted to decline by a high single-digit percentage, and free cashflow is expected to be between $4.5 billion and $5 billion.

On Wednesday, Telstra shares finished at $3.25. The stock has slumped 5.5 per cent so far this year, compared with the market's 8.4 per cent drop.