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#Industry/competitors
Last edited a month ago

Telstra Plan offerings comparison

Table 1. - Cost per GB for mobile data

Table 2. - Cost per speed range for NBN plans

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#To delist from NZX 26/3/21
Added 2 months ago

Telstra Corporation Limited – Delisting from the Main Board of NZX Limited and letter to Shareholders

The Telstra Board has resolved to delist from the Main Board of NZX Limited (“NZX”), and move to a sole listing on the Australian Securities Exchange (“ASX”). NZ RegCo has approved the delisting, subject to Telstra meeting certain conditions. The trading of Telstra shares on NZX will cease at the close of business on Wednesday 16 June 2021.

NZX shares will be transferred to the ASX, and there will be no NZX trading, on Thursday 17 June and Friday 18 June 2021. Telstra will be delisted from NZX from the close of business on Friday 18 June 2021. The sole listing on the ASX will commence at the opening of the next trading day on Monday 21 June 2021.

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#Bear Case
Last edited 6 months ago

The ship is out of control. But where is the captain?

Has the largest telecommunications infrastructure in Australia but tends to waste money big time. Remember Trading Post?

Poor re-investment/dividend management - paying almost all that it earns.

Poor customer service year on year. Nowdays you can't even talk to them. You have to "chat" to them. What used to be a 1-2h phone conversation now becomes a 3-4h "chat".

The last straw "no pun intended" that the company is facing a $50m fine for 'exploiting' Indigenous consumers.

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#Fundie/Analyst Views
Last edited 8 months ago

25-Sep-2020:  https://www.livewiremarkets.com/wires/buy-hold-sell-6-sustainable-dividend-stocks

In this "Buy Hold Sell" segment from LivewireMarkets.com, Jessica Amir of Bell Direct sits down with Neil Margolis of Merlon Capital and Michael O'Neill from Investors Mutual to discuss six income candidates and whether they can be trusted for sustainable dividends.

They include 1) Fortescue Metals Group - Which is facing questions around how long elevated iron ore prices can last; 2) Telstra - Whose current dividend is under doubt due to earnings and margin pressures; 3) Medibank Private - A business swimming in cash but contending structural issues impacting insurance affordability; and 4) AMP - A company that's been in the news for all the wrong reasons.

Neil and Michael also each bring their one top stock idea for sustainable dividends, trading at an attractive valuation right now (Aurizon & IOOF).  This episode was filmed on Wednesday (23 September 2020).

Here's the transcript of the Telstra section where Neil (Sell TLS) and Michael (Buy TLS) have opposite views:

Telstra (ASX:TLS)

Jessica Amir: Okay. Staying on you, Neil, Telstra. Their shares are not doing so well of late. Buy, hold or sell?

Neil Margolis (Sell): Telstra's a sell still. We wrote an article last September about this on our website. The cash flow of the company is not that strong. By their own measure, the underlying earnings are around 10 cents a share when you exclude the NBN disconnection payments. That still includes a little bit of a contribution from the fixed-line business, which we ultimately think is going to be a break-even proposition that's re-selling the government NBN. It's going to be hard to make money on that. So you're left with a mobile business, which is a good business, but the margins and prices are high. So we think underlying earnings of say 10 cents, maybe a dividend of 7 cents, the market is still pricing it as if the dividend is 10 to 16 cents, so we think it's a sell.

Jessica Amir: Thanks. Neil. Michael, what do you think? Telstra, pretty tightly held. Buy, hold or sell?

Michael O'Neill (Buy): Telstra is a buy for us. It's on a 5.5% yield. It does have 50% market share in fixed-line and mobile, and fair to say they've been through a very tough period of competition from Optus and Vodafone at unsustainably low returns, and something's got to give. And we see their 5G leadership is underpinning some return to improvement in market share and also margin over time.

--- click on link above for more ---

[I do not hold TLS shares.  I prefer TPG amongst the larger Telcos, and I also hold MAQ and UWL.]

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