Telstra is confident of achieving its full-year growth targets after more than 600,000 new mobile customers signed on in the first half.
But the telco giant conceded that margins at its Sensis business would continue to come under pressure as sales revenue declined in the digital age.
Telstra shares rose more than one per cent on Thursday after the company lifted its first half profit by almost nine per cent to $1.6 billion in the six months to December 31 and said it was on track to achieve its full year growth targets.
The profit rise came on the back of strong growth in customer numbers, with the company adding 607,000 new mobile customers which helped offset falls in its directories and fixed-line phone businesses.
Analysts said Telstra's profit and dividend result was largely as expected, but the Sensis business continued to be a drag on the company.
Telstra expects to pay full year dividends of 28 cents per share, after holding its fully franked interim dividend steady at 14 cents.
Chief executive David Thodey said the company would continue to focus on improving customer satisfaction, growing customer numbers, simplifying the business and taking advantage of new growth opportunities.
But he admitted the Sensis business was undergoing a "different margin structure" as it moved from print to digital.
"We would expect the margins not to be as strong as they used to be but we still see it as a reasonably strong business going forward," Mr Thodey told reporters on Thursday.
Sensis experienced a 12 per cent fall in sales revenue in the half.
Still, Mr Thodey said the company was on track to meet its full-year financial targets of low single-digit growth in total income and earnings.
"We are making good progress but there is more to do," he said.
Mr Thodey added that Telstra was trying to give customers the ability to avoid bill shock.
"Our focus is to put the customer in control of whatever they're using," Mr Thodey said.
Fat Prophets analyst Brian Han said Telstra's profit and dividend result came in largely as expected.
"The encouraging thing is the growth division, mobile, is still posting good numbers," Mr Han said.
However, Sensis operated in a "legacy print world" and continued to be a problem.
Telstra was on a trajectory to improve its customer service and improve mobile growth while competitors played catch up, he said.
"Those factors should ensure the momentum continues for the rest of this fiscal year," Mr Han said.
Meanwhile credit agency Moody's said Telstra's ratings were unaffected by the announcement.
Telstra shares closed six cents, or 1.3 per cent, higher at $4.64.