Telstra has posted a $3.9bn net profit for the year ending June 2013 – up from $3.4bn last year.

Australia’s biggest telco beat analysts’ expectations of $3.76bn.

The company has reported that it added 1.2 million new mobile customers in the past year. It now has more than 15 million retail mobile customers on its network.

David Thodey (pictured), Telstra’s CEO, said: “We have been able to deliver the third consecutive year of significant customer growth as a result of our focus on improving customer service as well as continued investment in the network.”

He said Telstra will extend its 4G coverage to 85% of the country by the end of 2013.

Telstra’s fixed telephone line business, however, continued its decline as more people choose mobile instead. The telco lost more than 300,000 fixed line customers in the past 12 months.

The decline in revenues from Telstra’s fixed line business was offset by stronger demand for fixed broadband.

Telstra’s $11bn NBN agreement with the government is also starting to pay dividends for the company – it received about $400m in NBN payment from the government in the past year.