TelstraClear has seen a turnaround, making a small profit on the back of an increase in broadband sales and lower costs.
It made $7.5 million in the year to June, compared to a $23 million loss the pervious year.
Revenue fell to $656 million due to the loss of a mobile phone contract it had with Vodafone.
If that's excluded, Telstraclear says the ongoing business remains strong, helped by broadband sales, though calling revenues continue to decline.
The company slashed labour, network and other operating costs by 8% to $531 million.
Chief executive of the Australian parent Telstra, Sol Trujillo, says TelstraClear is still a "little bit soft" on the business side, but he expects improvements.
Telstra has made a profit of $A3.7 billion, an increase of 13%.
