Telstra has smashed expectations, with its full-year profit surging almost 15 per cent to $4.3 billion.

Australia’s dominant telco also raised its dividend for the first time in seven years, increasing the final dividend to 15 cents per share, taking the full year payout to 29.5 cents per share, an increase of 5.5 per cent.

Telstra also announced further return to shareholders with an off market share buy-back of up to $1 billion.

The market consensus had been for a profit of $4 billion.

The strong result was supported by a strong growth in earnings.

Total income increased 6.1 per cent to $26.3 billion, while earnings (EBITDA) was up 9.6 per cent to $11.1 billion, also well ahead of market expectations.

Telstra gained 937,000 mobile customers during the year, driving up mobile revenue by 5.1 per cent to $9.7 per cent