Telstra chairman John Mullen said the telco’s performance has been a disappointment to investors but the board wants to ensure investors’ payout is not cut.

Speaking at the company’s annual general meeting, Mr Mullen did not shy away from Telstra’s below-par results in recent years which stem from losing its wholesale role to the National Broadband Network.

“The board of Telstra is acutely aware that the level of earnings being delivered by Telstra, the dividend and share price are a disappointment to many investors, as indeed they are to us as well,” he said.

Net profit fell 14.4 per cent to $1.84 billion for 2019/20, while the full-year dividend remained steady at 16 cents per share. Shares have fallen from about $6 in 2015 to about half that this year.

Yet the NBN’s damaging effect was “finally almost behind us”, according to Mr Mullen, and the huge takeup in internet use during the pandemic showed opportunities.

One opportunity was telehealth. Mr Mullen believed Telstra Health, which caters to the healthcare industry, would become a significant contributor to the telco.

Mr Mullen also addressed concern the full-year dividend may be cut due to the costs of coronavirus restrictions.

In the same meeting, chief executive Andy Penn said a $400 million impact was expected from COVID-19.

Telstra as a rule pays a dividend of 70 to 90 per cent of underlying earnings, yet Mr Mullen said the board was prepared to pay more in order to maintain the 16 cents payout.

This was not a guarantee, he said.

Meanwhile three management figures including Mr Penn had their pay cut by 10 per cent ($758,000 collectively) due to the dodgy selling of mobile phones to indigenous customers.

Staff at partner stores sold phones and plans to about 100 customers, which they could not afford.

Mr Mullen said there was some serious misconduct, and all debts had been waived.

The Australian Competition and Consumer Commission is investigating.

Shares were higher by 3.06 per cent to $2.86 at 1424 AEDT.