TLS - Telstra Corporation

[ozbecool]

If that's based soly on what happened with the interim dividend you will most likely be dissapointed.

Pitty I reached this forum today and not on Fri - it would have been more appropriate if my comment was on 21Aug09:

21Aug09 RIVKIN said BUY Telstra - but most of the indicators say : SELL Telstra - additionally TLS goes ex DIV on 24Aug so the down pressure will be even higher.

I would wait long time - until indicators change - with buying this stock (and there are many better stocks than this one anyway)

______________
The above comment should not be considered as a financial advice - it is only author's personal opinion.





:cool:

[The Owls]

If I buy Telstra on Monday, will I still get the dividend? I think it will go down on Monday due to the Dow Futures being down so I'd rather buy it Monday if possible rather than today - if I can still collect the dividend?

Please advise that if Telstra shares are purchased on Monday 24th August the dividend will not be paid to the new owner.

[Buckeroo]

______________
The above comment should not be considered as a financial advice - it is only author's personal opinion.


Well, that's one thing I do agree with you on:)

Its the best thing that could have happened to have the future fund sell out. Its been a noose on Telstra's share price. I'm always wary of government controlled investments - they can turn the screws anytime to get their own way.

So the quicker they can sell out the better. But have no fear people, looks like it will be another 6 months before the next sell.

Cheers

[Glen48]

Good thing we suckers are there to buy these shares for our supper funds with out our permission.
And the brokers pick up a nice earner on the side.

[jennifer.c.thomp]

If I sell Telstra on Monday (ex-dividend day) do I get the dividend or do I have to wait until the day after? [I'm new to all this.]

[ozbecool]

If I sell Telstra on Monday (ex-dividend day) do I get the dividend or do I have to wait until the day after? [I'm new to all this.]

You can sell shares of any company on EX-div day (in this case for Telstra it is Mon, 24Aug09) and you will still be entitled to the dividend.

To make it easier to remember try to use the following paraphrase: "EXpired of the DIVidend".

;)

[ozbecool]

Well, that's one thing I do agree with you on:)
....
Cheers

Your choice of course - people trading shares have two options when they encounter a drastically DIFFERENT point of view then their own:
- stick to their ideas no matter what (sometimes it is until is too late to change them or the change would cost a lot of lost capital / earnings)
- listen to others and consider modifying their own position

My intention was to warn people that a big SELL OFF is not on its own merit alone a good trigger to buy into 'cheaper' stock. One shall consider at least the possible reasons of such a big SALE. The impact of that being the price going down is normal in such circumstances - but does it mean that it is ALWAYS a BUY recommendation. By all means : no.

And in general : buying purely on NEWS carries high level of risk that the news we received might have been interpreted incorrectly (by us)

Cheers

[JAS81]

You can sell shares of any company on EX-div day (in this case for Telstra it is Mon, 24Aug09) and you will still be entitled to the dividend.

To make it easier to remember try to use the following paraphrase: "EXpired of the DIVidend".

;)

According to telstra, the record date for the dividend the 28th of august. Shares go ex-div on the 24th... correct me if i am wrong, but i have always read this to mean that if your holding on the 28th is nil - so will be your dividend... so you need to hold your shares from the 24th to the 28th - and it is those held shares that will attract a dividend...

[skyQuake]

According to telstra, the record date for the dividend the 28th of august. Shares go ex-div on the 24th... correct me if i am wrong, but i have always read this to mean that if your holding on the 28th is nil - so will be your dividend... so you need to hold your shares from the 24th to the 28th - and it is those held shares that will attract a dividend...

T+3 settlement: Shares go onto the register 3 days after trade. Thats why you need to hold as of close of trade 24th Aug.

[JAS81]

T+3 settlement: Shares go onto the register 3 days after trade. Thats why you need to hold as of close of trade 24th Aug.

I see... so the key date is record date, less three days. Assuming that not all stock records dates are T+3 from ex-div date.. or are they all?

[ozbecool]

I see... so the key date is record date, less three days. Assuming that not all stock records dates are T+3 from ex-div date.. or are they all?

Note that it is almost a rule that on EX Div day share price of the stock being considered goes down - and there are often many comments in the press saying "price of XYZ fell N cents today as it today goes Ex Div" - does this provide you with a new light at this issue ?

In my personal opinion it shouldn't be like this - i.e. "as per record date" and then 3T+ rule applied; this is because it creates confusion for many people. It should be stated 100% clearly that : "you must hold shares at the close of the day preceding the EX Div date" - then there would be no questions asked.

The same applies to ever unclear SHARE OFFERS and the RECORD DATE for the entitlements. On one occasion (recent BSL placement) I asked the BSL support line about that patricular placement and ... the guy DID not know the answer !

[ozbecool]

An example of the 'market EX Div price correction' - from today's market: WES is EX Div today (25Aug09) - div is $0.60 and the price fall is $1.70 at the moment.
:o

[Tukker]

I got a Buy triggered on tls today, unfortunately i have no capital to spare. Chart looks like the sell-off has been overdone. hoping for some consolidation today to confirm a buy order tomorrow. What do you guys think?

http://i333.photobucket.com/albums/m377/samuelntaylor/tls.png

This was in the news today also.


Telephone company Telstra Corp (ASX: TLS.ax) may be in focus after Credit Suisse raised its rating to outperform (see [nRCHAU]).
http://au.biz.yahoo.com/090909/19/28ile.html

[Miro]

CANBERRA -- The Australian government said Tuesday it wants Telstra Corp. to the nation's largest telecommunications company, to agree to structurally separate its wholesale and retail arms as Canberra prepares to build a new 43 billion Australian dollar ($37.02 billion) high speed national broadband network.

If the group doesn't agree to structurally separate its businesses, Canberra will impose a "strong functional separation" framework on the company.

"It is the government's clear desire for Telstra to structurally separate, on a voluntary and cooperative basis," Communications Minister Stephen Conroy said in a statement.

"Telstra is one of the most highly integrated telecommunications companies in the world across the fixed-line copper, cable and mobile platforms," Mr. Conroy said.

Competition watchdog the Australian Competition and Consumer Commission, and some of Telstra's rivals, had argued that the government should force a much tougher structural split on Telstra -- requiring a legal separation of Telstra's assets and activities into separate corporate entities with entirely separate owners and shareholders -- to allow the ambitious new open-access network to compete on equal footing.

The plan, contained in telecommunications legislation to be introduced into Parliament later Tuesday, would allow the government to impose a strong functional separation framework on Telstra if the telecommunications firm chooses not to voluntarily separate. That would mean that Telstra has to conduct its network operations and wholesale functions at arm's length from the rest of the group, and provide equivalent price and non-price terms to its rivals.

Continue reading at online.wsj.com/article/SB125297547118110515.html

[freebird54]

[QUOTE=Tukker;486396]I got a Buy triggered on tls today, unfortunately i have no capital to spare. Chart looks like the sell-off has been overdone. hoping for some consolidation today to confirm a buy order tomorrow. What do you guys think?


Nice drop today - I own 28,000 looking for some good Put premiums to get more at a discount

[skc]

The fundamentals of TLS will change so much if it was forced to separate structurally - this uncertainty makes holding this stock a risky prospect imo.

The whole situation is quite absurd with the NBN.

The government sold off Telstra only to build and create the next TLS (i.e. NBN) again. Shouldn't there be at least some non-compete clause that limit the government competing with a business they recently sold off?

If and when the Liberals come back into power, would the NBN be sold off to the public investors again?

[sammy84]

The handling of TLS is a joke and a sad story for mum and dads. First it is sold off, with the government pushing people to invest. Didn’t they realise at the time when TLS was being sold that they were effectively privatising a monopoly? Now the government feels this is unfair and is trying to dissemble the monopoly. There's only one loser set of losers in all this...

[skyQuake]

The fundamentals of TLS will change so much if it was forced to separate structurally - this uncertainty makes holding this stock a risky prospect imo.

The whole situation is quite absurd with the NBN.

The government sold off Telstra only to build and create the next TLS (i.e. NBN) again. Shouldn't there be at least some non-compete clause that limit the government competing with a business they recently sold off?

If and when the Liberals come back into power, would the NBN be sold off to the public investors again?

And not to mention future fund unloaded right before this crap came out :D
Certainly screwed the retail guys

[jonnycage]

well said sammy, im will be out of all my TLS shares over the new
few days if the prices rises a little. no point hanging on to these anymore
with a government hell bent on them failing

[skc]

well said sammy, im will be out of all my TLS shares over the new
few days if the prices rises a little. no point hanging on to these anymore
with a government hell bent on them failing

Sold all mine this morning. Not gonna muck around for a few cents.

For all T3 investors...

Purchased Nov 2006 for $3.6 ($2 + $1.6)
6 x dividends of 14c (Total $0.84)
Today's price $3.11

For a nice return of 9.7% return, or 3% per year...

[sammy84]

And not to mention future fund unloaded right before this crap came out :D

Potential case for insider trading?? :D
I'm sure the ASIC would actively pursue such an issue (typed in sarcasm)

[drsmith]

From Telstra's company announcement today.



Trlstra is currently examining the detail of the reforms and will provide an update to the market as appropriate.

In terms of influence over the overall process it sounds to me like Telstra is still very much outside the tent.

[jonnycage]

Sold all mine this morning. Not gonna muck around for a few cents.

For all T3 investors...

Purchased Nov 2006 for $3.6 ($2 + $1.6)
6 x dividends of 14c (Total $0.84)
Today's price $3.11

For a nice return of 9.7% return, or 3% per year...

fair call to mate, and am T3 subscriber so good maths there

seems a shame this puppy aint being allowed to fly

j c

[drsmith]

T3 investors also got 1 for 25 if they held on and paid the final instalment. That does not add much to the overall return though and if sold at today's levels would still represent a poor return on investment.

[Dark1975]

It makes me sick to see a great auzzie icon can't dominate with a incompetent goverment with different set of rules for monoplies.Take a look at WOW and coles with 80% monopoly in the market.Oh wait sorry i forgot the directors of WOW have bigger pocket handouts and sit on 5 different companies at one time.
Sorry for throwing the topic,But im just upset with this latest announcement.I really thought this telco would take off.Dam this goverment:banghead:

[nikemi]

Is the government going to compensate shareholders for the premium they paid them when they sold TLS initially and paid what they did for what they sold them - a monopoly, now they are concerned and want to fix things but without the cost of the mistake coming out of their pocket.

I forgot they are the government and we are a democracy so they can do what they like and change the regulations if necessary!

[skc]

fair call to mate, and am T3 subscriber so good maths there

seems a shame this puppy aint being allowed to fly

j c

Your sarcasm detector didn't go off there...

~3 ish percent p.a. return over the last 3 years is worse than cash, but slightly better than BNB I guess.

[jonnycage]

Your sarcasm detector didn't go off there...

~3 ish percent p.a. return over the last 3 years is worse than cash, but slightly better than BNB I guess.

dont worry it went off, just dont waste energy on tls any more.

yep unfortunately tis a dog with fleas to boot.

let the good times roll

jc

[ROE]

Is the government going to compensate shareholders for the premium they paid them when they sold TLS initially and paid what they did for what they sold them - a monopoly, now they are concerned and want to fix things but without the cost of the mistake coming out of their pocket.

I forgot they are the government and we are a democracy so they can do what they like and change the regulations if necessary!

government never promise TLS share holders that it will stay a monopoly or wont face regulation...
they spell out the risk in the prospectus...

when you buy a stock there is always an element of risk something goes against it and down
goes the share price...fraud, regulation, more tax, stupid CEO that gamble the company on debt etc...

I like TLS for yield only and that is not really good enough for me to buy...

This is a business that spend more than it earns for many years now and that sort of business doesnt grab
my attention...it doesnt matter how much money you make or earn..if you spend more than you earn sooner or later
something bad may happen to you..

Now its has a pile of debt facing split up battle..could be messy stuff for them.

TLS as a whole debt isnt an issues but now spit the company into 2 that will bring some headaches of debt structure.

[jono_oz]

What I find most interesting about todays events is that no one has commented on the fact that the Goverment (The Futures Fund) Sold a huge chunk of its stake in TLS only a week ago..... wow wasn't that fortunate for them!!!!
Could it be INSIDER TRADING?? :eek: Surely that woudn't happen! :confused:

[supermatt]

couldnt agree more with that, man I really am so fuming right now, words cannot describe my anger at the government and tls.
I am screweddddddddd big time, this is going to take years of getting out of my huge tls share loss now.
Well I feel sorry for all the rest of you that have been shafted too.

all the best

[ROE]

What I find most interesting about todays events is that no one has commented on the fact that the Goverment (The Futures Fund) Sold a huge chunk of its stake in TLS only a week ago..... wow wasn't that fortunate for them!!!!
Could it be INSIDER TRADING?? :eek: Surely that woudn't happen! :confused:

If you read future fund performance and their general direction, they have been telling the market for at least a year now that they want to sell down the TLS stake and diversify...

they acted some weeks ago and carry out what they been telling the market.

I think they did not know this is coming..I mean everyone sort of know TLS will face separation sooner or later it's just a matter of timing and how.

Plus they sold it to institution holders which I'm sure fully aware of the risk
facing TLS.

[jono_oz]

If you read future fund performance and their general direction, they have been telling the market for at least a year now that they want to sell down the TLS stake and diversify...

they acted some weeks ago and carry out what they been telling the market.

I think they did not know this is coming..I mean everyone sort of know TLS will face separation sooner or later it's just a matter of timing and how.

Plus they sold it to institution holders which I'm sure fully aware of the risk
facing TLS.

Let us review: "Futures Fund sells 21/8 Shares were $3.65 - two days later they are $3.36. I am sure the institutions were less aware than the government about what was about to happen. Minister makes announcement 15/09 shares drom from $3.30 to $3.11" If I were an "Institution" I would certainly steer clear of any further selloffs from the Futures Fund.
Perhaps you are right and the left hand knew not what the right was up to?? I would just like to hear them say it on oath.

[QBN_BOY]

Let us review: "Futures Fund sells 21/8 Shares were $3.65 - two days later they are $3.36. I am sure the institutions were less aware than the government about what was about to happen. Minister makes announcement 15/09 shares drom from $3.30 to $3.11" If I were an "Institution" I would certainly steer clear of any further selloffs from the Futures Fund.
Perhaps you are right and the left hand knew not what the right was up to?? I would just like to hear them say it on oath.


Which companies have been toughing for a strategic stake in Foxtel via Consolidated Media Holdings the last couple of weeks. Naive to think no information was out there prior to the TLS announcement.

[skc]

Let us review: "Futures Fund sells 21/8 Shares were $3.65 - two days later they are $3.36. I am sure the institutions were less aware than the government about what was about to happen. Minister makes announcement 15/09 shares drom from $3.30 to $3.11" If I were an "Institution" I would certainly steer clear of any further selloffs from the Futures Fund.
Perhaps you are right and the left hand knew not what the right was up to?? I would just like to hear them say it on oath.

Don't be a silly conspiracy theorist. Future fund sold 684.4 million Telstra shares at a price of $3.47. So they may be $250m better off. Would the government risk that kind of backlash from voters (TLS shareholders) for such amount?

In fact, the government is probably pi$$ed off that the Future fund sold at such time causing these kinds of allegations. Having said that, if Future Fund was to sell right after today's announcement that would be just as damaging to the government. So either way - it was hard for government to make good of this absurd situation.

[ROE]

Let us review: "Futures Fund sells 21/8 Shares were $3.65 - two days later they are $3.36. I am sure the institutions were less aware than the government about what was about to happen. Minister makes announcement 15/09 shares drom from $3.30 to $3.11" If I were an "Institution" I would certainly steer clear of any further selloffs from the Futures Fund.
Perhaps you are right and the left hand knew not what the right was up to?? I would just like to hear them say it on oath.

People find all kind of excuses for their loss but themselves for not knowing enough about the business and the nature of the industry..

I got ripped off by storm, oh its not my fault it's finanical advisor and greedy banks werent you greedy also in the first place beleive you can get easy return in the stock market?

Wespoint I got con
oh getting 12% is easy?

Opes Prime, leverage up to buy small cap and speculative stocks
oh it's not my fault I was con into it and didnt understand the contract

leverage up and buy speculative stocks are nothing more than gambling on steroids.

and there are thousands who never get burn or fall into these traps
and make good return, can we think they are lucky or they do their homework :)

its your money, you make the decision take some responsibility

[Nyden]

People find all kind of excuses for their loss but themselves for not knowing enough about the business and the nature of the industry..

I got ripped off by storm, oh its not my fault it's finanical advisor and greedy banks werent you greedy also in the first place beleive you can get easy return in the stock market?

Wespoint I got con
oh getting 12% is easy?

Opes Prime, leverage up to buy small cap and speculative stocks
oh it's not my fault I was con into it and didnt understand the contract

leverage up and buy speculative stocks are nothing more than gambling on steroids.

and there are thousands who never get burn or fall into these traps
and make good return, can we think they are lucky or they do their homework :)

its your money, you make the decision take some responsibility

Damn straight. If you ask me, anyone caught up in those sorts of schemes deserves to lose everything. May as well send $50K to the Nigerian Prince, you know, to cover the transaction costs in his efforts to send you $10 million.

[Calliope]

Most brokers are optimistic, and see an upward trend with the opportunity to get involved in the National Broadband related deal;


Oversold and misunderstood and $4.55 target is the UBS headline. They have a Buy recommendation share price reaction they say is “overblown” and separating might potentially liberate TLS in a NBN world. “Capital management or media M&A could also be an option post separation.”

Macquarie Equities upped their recommendation to Outperform from Neutral on the view that the reforms will provide “a catalyst for significant progress towards an NBN-related deal by the year-end.” Now that the regulatory risk in known, they think the catalyst for constructive dialogue on NBN outcomes has arrived and a progress towards an NBN-related deal with follow by the year-end. They have a 360c target price.

Citi has a Hold recommendation and 340c target price. They believe TLS is likely to be range bound between $3 and $3.50 depending on how well TLS negotiates. They are also confident of a favourable outcome under the new management team but lots of uncertainty remains.

GSJB Were maintains their Buy recommendation and 445c target price, 43% above the current share price. They believe if TLS corporate, it could vend in its passive infrastructure or entire copper network into the NBN Co. “We reiterate our view that there is limited downside to the share price from here. Our ultimate worst case valuation for TLS is 290c”.

RBS Equities says TLS is a Buy with a 450c target price, which is 12.5x their FY19 EPS of 36.1c. “Regulatory risks are now clearer and may be bargained down.” They say key downside risks to their target price include higher costs or capex, IT projects running over budget through FY10 and further sales or earnings impact depending on the extent of recession.

[Miro]

Most brokers are optimistic, and see an upward trend with the opportunity to get involved in the National Broadband related deal;
Yea, I'm really happy I didn't sell today. I bought quite a bit of TLS just 5 days ago and I was ready to take the losses and move on.

I don't like Telstra but it seems very cheap at the moment, so I'll keep holding.

[YELNATS]

Take a look at WOW and coles with 80% monopoly in the market.

There is no existing parallel between the telco and retail food markets.

Woolies and Coles aren't a monopoly in their market. A monopoly means one seller, many or at least more than one buyer (mono = one). Retail food market is an oligopoly.

[The Owls]

Quote "Telstra shares have rebounded from losses driven by fears its likely structural separation will hurt earnings, with analysts now predicting changes to the business could actually improve shareholder value."

The above quote was in the shares to watch today in thebull.com.au today. As a retired person looking after our own superannuation fund how can we take the advise serious when Tuesday the market for TLS shares was down down down and yesterday was up up up. Today we read that what the Government did could now be good for TLS shareholders. Is the spin, a guess or just hope.

Where were the analysts on Tuesday who are now predicting the changes to the business could actually improve shareholder value. Every analyst is smart after the event.

[Gillie]

Does anyone know what the breakdown of TLS is in terms of Retail, wholesale and the Foxtel is as a percentage?

If you have any articles on this it would be much appreciated.:D

[Kieran]

After the govt announcement I did a bit of research on Telstra after consistently dismissing it as an evil monopoly for the past couple of years. I believe the split will be a great thing for the country in terms of competition but also gives shareholders certainty with regard to how the company can/will proceed into the future.

At a price of $3.10 (about a 4.6% drop from Friday's close of $3.25) and assuming dividends hold at 28c/pa, that is a fully franked dividend of 9%.
Of course there is always the possible upside or downside with regard to the split of the company but I doubt it's the end of the world for Telstra. At $3.10 I'll likely dip my toes in the water, unless there's some bad news in the meantime.

[mikes]

did i hear that canberra is threatening to give all the new generation mobile spectrum to the singapore owned optus and other foreign owned companies and zilch new spectrum to ozzie icon ( with large shareholdings from the ozzie battlers) telstra - surely not.

prev held telstra, not now, though some rellies have small holdings.

[Kieran]

I haven't heard that at all (the optus part)

The Government has said as long as Telstra doesn't split (etc...) then the government will block any attempt by Telstra to acquire further radio spectrum for their mobile network. This is legally allowable since the Government owns the spectrum (or at least the licenses to use it) which makes it a very important bargaining piece.

Whether or not that spectrum is then sold to competitors is, in my opinion, irrelevant as Telstra needs it regardless. Telstra not having it is just as bad as no one having it or a competitor having it - if it's not under Telstra's control they can't make money from it and the Government knows this - hence their "threat"

[TheAbyss]

Thought i would throw in my two cents worth regarding TLS and the NBN.

Any NBN roll out will have to be via existing infrastructure hence why the govt is now talking break up. Reason being they need access to the copper network.

Once the copper network is available they can look to deliver an NBN to deliver video and data to all and sundry (similar to Hong Kong where you can order a single pay TV channel; if you like). The NBN will use a device which allows them to transmit data over a copper cable using an end point similar to an ADSL modem. That will allow delivery without the billions required to lay fibre everywhere.

BTW the hardware is NEC in HK so no real gain for us here.

So the question for TLS holders is will we get a fair price or not? We will however the trade off will be TLS involvement in the NBN roll out is no longer a must once this happens as it becomes an auction to see who can provid ethe hardware and billing once the last mile is resolved.

A bit to think about and thought provoking i hope.

Key points are

1.Do TLS get a fair price for the infrastructure? - If so a positive for holders
2. Without the leverage that the infrastructure provides what do Telstra have to offer that the competitors do not? Price war helps no one.
:2twocents

[shiftyphil]

Any NBN roll out will have to be via existing infrastructure hence why the govt is now talking break up. Reason being they need access to the copper network.

Once the copper network is available they can look to deliver an NBN to deliver video and data to all and sundry (similar to Hong Kong where you can order a single pay TV channel; if you like). The NBN will use a device which allows them to transmit data over a copper cable using an end point similar to an ADSL modem. That will allow delivery without the billions required to lay fibre everywhere.


There's no copper in the NBN. It's been fibre all the way for a while now.

They've already announced it'll be GPON.

[skyQuake]

There's no copper in the NBN. It's been fibre all the way for a while now.

They've already announced it'll be GPON.

No copper? Thats a bummer for shareholders. At least if it was copper wiring it could be cashed in for scrap metal!

[TheAbyss]

There's no copper in the NBN. It's been fibre all the way for a while now.

They've already announced it'll be GPON.

And how many years will that take to realise?

In the interim, by buying the infrastructure arm from Telstra (Valued between 10 and 20 billion dollars by analysts) The govt will allow the successful NBN bidder access to all of the copper infrastructure comprising of the copper itself, ducts, conduits and pipes.

This will allow the bidder to use the ducts and conduits etc to run the fibre which is the end goal.

However in the shorter term they can also offer a copper based solution which will allow them to fulfill the govt mandate of delivering data to every household with the added benefit of generating revenue which they could use to fund the roll out the fibre on an interim basis.

[shiftyphil]

And how many years will that take to realise?

In the interim, by buying the infrastructure arm from Telstra (Valued between 10 and 20 billion dollars by analysts) The govt will allow the successful NBN bidder access to all of the copper infrastructure comprising of the copper itself, ducts, conduits and pipes.

This will allow the bidder to use the ducts and conduits etc to run the fibre which is the end goal.

However in the shorter term they can also offer a copper based solution which will allow them to fulfill the govt mandate of delivering data to every household with the added benefit of generating revenue which they could use to fund the roll out the fibre on an interim basis.

The original NBN proposal was scrapped months ago.
http://www.minister.dbcde.gov.au/media/media_releases/2009/022

There is no 'bidder' anymore. There's a new goverment owned company to build and manage a completely new network.

[TheAbyss]

Sorry. Replace bidder with "The Company". Was that changed because the net value of the NBN as proposed was negative $9 billion?

If Telstra get $8-10 billion for the infrastructure plus costs for restructuring their It systems etc (estimated at approximately 2.5 billion) then it could be good for everyone all round.

No winners if a separate infrastructure is used so whatever happens it must use the existing trenches etc or the project will never get off the ground. Aerial is not an option and the economics say a separate trench to what is there is not viable.

Great to have some constructive comments on where readers feel this will end up.

[johannlo]

I would love for a parallel universe opportunity to call the govt's bluff.

I would not trust a brand new, govt appointed organisation to competently execute a massive and complex engineering project like the proposed NBN. For heaven's sake they're gone all in without even having concrete figures available. Its not viable without getting Telstra's assets/cooperation and everybody who knows anything about telecoms knows this.

For arguments sake, say Telstra sticks to their guns, loss of medium term future revenue (ie 4G frequencies, only an issue in 3-5 years time and even then tech may develop to further utilise existing 3.5G/UTMS better) is easily compensated (in medium term I stress) by existing flows, and Telstra already has a friggin NBN for all intents and purposes (from a big picture economic POV, the single digit % where its uneconomical to roll out doesn't count). They could easily roll out enough infrastructure so the last mile copper is pushing 20Megs plus to vast majority of households (already do actually).

Meanwhile the govt has to build it all from scratch, with zero income stream. And where are they getting their engineers from? Do you expect Optus, AAPT, Soul and all the other bit players to be able to organise a piss-up in a brewery? The only bullet left is further regulatory smackdown.

If nobody blinks then its actually Telstra holding the cards. But the govt is now in a corner (of their own making) and Conroy is a mongrel (a stupid one at that but still a mongrel) and I do not expect him to back down now that he's placed his cards and reputation on the block. The best outcome we can hope for, from both a citizen and a TLS investor POV, is that a compromise is reached whereby TLS participates and assists in NBN whilst being compensated with fair value. Now did that really need the govt to turn around and play Sol, we only just got rid of him lol.

[TheAbyss]

I would love for a parallel universe opportunity to call the govt's bluff.

I would not trust a brand new, govt appointed organisation to competently execute a massive and complex engineering project like the proposed NBN. For heaven's sake they're gone all in without even having concrete figures available. Its not viable without getting Telstra's assets/cooperation and everybody who knows anything about telecoms knows this.

For arguments sake, say Telstra sticks to their guns, loss of medium term future revenue (ie 4G frequencies, only an issue in 3-5 years time and even then tech may develop to further utilise existing 3.5G/UTMS better) is easily compensated (in medium term I stress) by existing flows, and Telstra already has a friggin NBN for all intents and purposes (from a big picture economic POV, the single digit % where its uneconomical to roll out doesn't count). They could easily roll out enough infrastructure so the last mile copper is pushing 20Megs plus to vast majority of households (already do actually).

Meanwhile the govt has to build it all from scratch, with zero income stream. And where are they getting their engineers from? Do you expect Optus, AAPT, Soul and all the other bit players to be able to organise a piss-up in a brewery? The only bullet left is further regulatory smackdown.

If nobody blinks then its actually Telstra holding the cards. But the govt is now in a corner (of their own making) and Conroy is a mongrel (a stupid one at that but still a mongrel) and I do not expect him to back down now that he's placed his cards and reputation on the block. The best outcome we can hope for, from both a citizen and a TLS investor POV, is that a compromise is reached whereby TLS participates and assists in NBN whilst being compensated with fair value. Now did that really need the govt to turn around and play Sol, we only just got rid of him lol.


Great post.

One way to ensure Telstra stays interested (which is a must for this to get some traction) is when (if) the infrastructure is hived out for the NBN, Telstra take a mix of cash and Equity. That way Telstra will have some strong reasons to migrate their base over to the NBN. Cash short term and increasing revenues long term is a popular theme with share holders.

[ROE]

if TLS dont play ball the government can just
fund the whole NBN, force TLS to split.

Sell the NBN as a public float at half price and on the cheap and let the new investors compete with Telstra :D

Competition Solved

Cant remember when was the last time a company fight the government and wins :-)
it's like kids get into an argument with their mum and dad who rules the house, who make the law
and has endless pocket and the kid expect their parents to bend to their will :D

[johannlo]

fund the nbn how?

They already expect 49% funding from private investment - WITHOUT any proper costings or showing how ROI can be achieved. A quick google will get you lots of back of envelope costings that show that its v difficult - if not impossible - to achieve a ROI that will attract private capital, without charging high costs and assuming massive uptake.

Here's just a few links

http://www.crn.com.au/News/155202,nbn-cost-debate-picks-up-steam.aspx

http://www.commsday.com/node/325

http://www.businessspectator.com.au/bs.nsf/Article/The-myth-of-NBN-profits-pd20090731-UG4FD?OpenDocument

You might be right if this was a dictatorship, but the government does not have that luxury of being able to throw away billions without a massive backlash, also blowing a hole in the budget.

lets also not forget the legal issue i.e. if they go too heavy with regulation and destroy shareholder value - the value that they sold off in T1, 2, 3.

Here's a genius idea: NBN is going to cost ~43 billion they say. TLS's market cap is: ~43 billion, with an NBN already effectively in operation and retail arms making good profits. Also govt already has some of the shares so it won't cost 43 billion. See how I am joining the dots..... why is it that this most obvious of approaches (re-nationalise Telstra) has not even been discussed?

[boofhead]

My assumption would be because it would involve buyings lots of copper, ADSL equipment etc. that will be superseded. Add to that it doesn't give people fibre etc. that is starting to be rolled out now.

[johannlo]

Copper is far from superceded, greater and greater speeds are being squeezed out of DSL technologies all the time . Here is a hint:

http://en.wikipedia.org/wiki/Very_high_bitrate_digital_subscriber_line

Far more economical to increase DSLAM coverage (more exchanges, FTTN, whatever) than run expensive fibre to everyone's house when most people don't want to be paying for the privilege. Those who want it, give them an option to pay for the cost themselves.

Either that or give up the backyard and two cars and squeeze everyone into hi rise flats, how do you think Hong Kong and South Korea etc. can deliver 100 megs to the door and make it economically viable? Basically they have FTTN to the basement of the apartment / housing estates then the 'last mile' is still copper (ie up 20 stories instead of 3 kms but the principle and architecture is identical). They don't actually run fibre into each individual household per se.

Its pretty simple really and I am astounded how policymakers want to have their cake and eat it too. If you read any industry publications or articles written by telecoms people / engineers they are all saying the same thing I am saying. Would love to see Conroy ripped to shreds in a public debate with a bunch of real life comms engineers.

From your comment I get the impression that you don't realise how much fibre Telstra has and how its entire backhaul network is pretty much fibre already, its just last mile that is copper.
And Telstra's fibre backbone has far more capacity than most laypeople are aware of and can easily roll out more 'nodes' to reduce the distance covered by last mile copper, its simple economics why they haven't done so (hint: because there is no competitive pressure) because their key driver is to maximise profits.

If we nationalise the Telstra infrastructure then it could act as the NBN effectively at a fraction of the cost and risk (building a new network is an unknown, we know what the current network is, how it works, and what can be done with it). Instead we gamble with the option of building a duplicate, over-specced network using nonexistent costings and with no business plan that anybody can discern. This is what happens when you let pollies make an engineering decision (heck even the accountants wouldn't have been so stupid, and in fact those types are amongst the ones pointing out the clear lack of figures in the government's plan).

[Gamblor]

Greater speeds may be getting squeezed out of DSL but the main problem will always be signal degradation. FTTH is fantastic infrustructure and i can't wait for the NBN to get up and running. Yes the costs will be high but I think it will actually end up being a very good spend in the long run.

As for TLS.... I no longer hold it and don't plan on buying again anytime soon.

[Buster]

G'Day ROE,


if TLS dont play ball the government can just
fund the whole NBN, force TLS to split.

Sell the NBN as a public float at half price and on the cheap and let the new investors compete with Telstra

Ha ha.. Wow, theres an idea.. :)

Lets get all those people who didn't take part in the Telstra float to invest in the NBN float.. Surely there are some shmucks out there that'll buy into the NBN despite the contsant gut kicking we've given Telstra.. We promise we won't flog the NBN the way we have TLS.. Honest.. :banghead:

Only a mug would buy in after witnessing the TLS events unfold over the last few years..

Cheers,

Buster

[ROE]

G'Day ROE,



Ha ha.. Wow, theres an idea.. :)

Lets get all those people who didn't take part in the Telstra float to invest in the NBN float.. Surely there are some shmucks out there that'll buy into the NBN despite the contsant gut kicking we've given Telstra.. We promise we won't flog the NBN the way we have TLS.. Honest.. :banghead:

Only a mug would buy in after witnessing the TLS events unfold over the last few years..

Cheers,

Buster

You probably wont but I would if it's sell below its intrinsic value
I make lot of money out of TLS :-)

Sold T1 for $8, T2 was over value didn't buy, T3 Sold for $4.50 :-)
No longer Hold TLS, there are much better stocks

[ROE]

fund the nbn how?

They already expect 49% funding from private investment - WITHOUT any proper costings or showing how ROI can be achieved. A quick google will get you lots of back of envelope costings that show that its v difficult - if not impossible - to achieve a ROI that will attract private capital, without charging high costs and assuming massive uptake.

Here's just a few links

http://www.crn.com.au/News/155202,nbn-cost-debate-picks-up-steam.aspx

http://www.commsday.com/node/325

http://www.businessspectator.com.au/bs.nsf/Article/The-myth-of-NBN-profits-pd20090731-UG4FD?OpenDocument

You might be right if this was a dictatorship, but the government does not have that luxury of being able to throw away billions without a massive backlash, also blowing a hole in the budget.

lets also not forget the legal issue i.e. if they go too heavy with regulation and destroy shareholder value - the value that they sold off in T1, 2, 3.

Here's a genius idea: NBN is going to cost ~43 billion they say. TLS's market cap is: ~43 billion, with an NBN already effectively in operation and retail arms making good profits. Also govt already has some of the shares so it won't cost 43 billion. See how I am joining the dots..... why is it that this most obvious of approaches (re-nationalise Telstra) has not even been discussed?

Dont understand estimate the length the government go through to keep their election promise, save face and meet agenda, they borrow extra $25B if they have to :D and they make laws
to damage TLS if they have to....well they already started.....split up or no more wireless spectrum for you....it's like a gun to the head...

Government can build for $50B and flock to Joe Public on the cheap like they did with TLS because after all it's tax payer money...

[boofhead]

johannlo: I understand how much fibre they have. Backhaul network is not to the premises. Telstra basically have fibre to the node in many areas - Telstra messed up assuming FTTN would go ahead.

Read up on the limitations of the DSL variations. Read up on what Telstra has done to reduce cost for copper network expansions. Many cost cutting exercises hurt what would come later - ADSL (and the other DSL variations.) The general pattern is to increase performance the better the line conditions need to be and the shorter the distance. I'm sure many may remember the other cockups - using the gel so waterproof joins that could become an expensive option and did in areas.

Japan and South Korean governments have put some public money in to their networks. They also put in conditions that helped the consumer which eventually help the network operator.

Building more phone exchanges will add a number of costs. The building lease or purchase, fitouts, electrical bills etc.

Telstra has been working with a Canadian based company and managed to get 10 and 40 gigabits per fibre for long haul.

I would love to see fibre grow from being backbone of the network to being the basis of the majority of the network.

[Dreadweave]

Not a good day for TLS,
I see that the ACTU has expressed cncearns about job losses if the split goes ahead but is this the only reason? I cant see how this would be a problem.
can anyone elaborate as to the cause of the drop today?

http://img9.imageshack.us/img9/1430/tls.jpg

[cornnfedd]

does anyone know why my telstra shares dont show up on computershare.com.au?

all of my others do, but not telstra (which i have been holding forever)

[Real1ty]

does anyone know why my telstra shares dont show up on computershare.com.au?

all of my others do, but not telstra (which i have been holding forever)

Because they are managed by Link

http://www.linkmarketservices.com.au/public/home.html

.................................................. .........................

[cornnfedd]

cheers, trust telstra to be different than everyone else. grr :)

any positive news with telstra lately or is this now a dead dog?

[Phantum]

Here was me thinking the call for telecommunications reform legislation was to encourage more competition, according to government and the 'competition'. Now it appears that some of the competition are retreating because is is too hot!!! Maybe some are reading the stories about there being more in the Governments pie than that ...


One of the people said SingTel could raise between $US4 billion to $US5 billion ($4.4bn to ($5.5bn), and that the money could be used to gain a foothold in Vietnam, China or Africa.

"There's not too much money to be made in Australia. It's a mature market and competition is very intense. Right now SingTel is thinking of selling a minority stake, but this can change depending on market conditions," the person said.

Oops I can not post links as have previously only been a reader ... but you can find the article on "The Australian" business section under the title Singapore Telecommunications mulls Optus IPO to raise up to $5.5bn.

Maybe someone else could link ...

[Dreadweave]

Some nice movement in the past week for TLS.

Im happy to hold something conservative in this upcoming predicted correction.

http://img233.imageshack.us/img233/1430/tls.jpg

[kotim]

Telstra is very close to a significant long term low,if it has not allready made it at 2.93. On the attached chart you will see that I have 1-1 equality lines at 2.90. The market has allready made a low at 2.93 which as far as I am concerned would normally be acceptable allowance, however why I think that the 2.90 will occur is that we are currently in very clear wave action down in this leg. You will see I have marked the ABC .382 on the chart and Telstra hit the mark perfectly, as well as that if you look slightly to the lef tyou will see tha the 382 is in line with a wave 4 of smaller degree.

It is the exact .382 retrace ABC correction that makes me think we will see a break below 2.93, but with an immediate turnaround.

anyway only time will tell, but I intend to buy if it gets there

[ROE]

cheers, trust telstra to be different than everyone else. grr :)

any positive news with telstra lately or is this now a dead dog?

Been a dog every since it floated...share price gone no where in 10 years,
Probably one of the worse performing stocks in the ASX..

in those 10 years put your money into JBH, TRS, REH, BKL,CAB
you can now retire :D

[Knobby22]

I don't own any and have long considered Telstra a dog however there is the glimmering of greyhound.

If Testra can wind up with cash and a decent share of the new fibre optic network it could become a very valuable company. The yield is 9.1%, PE ratio a bit over 9. Really starting to get on my radar.

[Paul Ellis]

9% + fully franked at the moment - I am happy just to sit on it for the dividends and wait until everyone realises they have overreacted to the NBN issue.

[McCoy Pauley]

The dividend stream is the only reason why I've held onto my stake in TLS (I hold 2,000 shares, purchased in the T1 float).

The legislation to force a separation of Telstra's businesses will go before the Senate this week. It will either (a) pass the Senate (but only with the support of the independents) unamended (b) it is rejected with or without amendments or (c) debate is deferred until the next sitting of the Senate, in February 2010.

I imagine that this will have a big impact on the share price one way or the other this week.

[McCoy Pauley]

According to the AFR today, the legislation will be debated in the Senate on Thursday but given their full plate with the ETS scheme, it will be highly unlikely that anything will happen on the legislation until next year.

[bloomy88]

According to the AFR today, the legislation will be debated in the Senate on Thursday but given their full plate with the ETS scheme, it will be highly unlikely that anything will happen on the legislation until next year.

Pretty standard move from the politicians, im tipping not until next year as well. It's annoying though because i think that the SP will respond positively to any legislation announcement, i think people just want to know definately what's going to happen...

[McCoy Pauley]

Pretty standard move from the politicians, im tipping not until next year as well. It's annoying though because i think that the SP will respond positively to any legislation announcement, i think people just want to know definately what's going to happen...

On the flipside, it would give the Telstra board time to negotiate with the Government to try to forestall the passage of the legislation and come up with a plan that maximises the shareholders' return.

[condog]

I have been watching Telstra for some time (7 years or so) and believe they are turning the corner. The ROE has stabilised and is beginning to rise, they have stopped paying dividends from borrowed money.

The market over reacted to the split announcment which was priced at approx 6-11c per share cost to split....So I got in at $3.10 for a big parcel....

happy to take the yeild and see.....but on fundamentals its always been a dog until recently.....

My primary concern is its high debt at 128% debt to equity..... One has to wonder why a company with huge free cash flow needs such a huge amount of debt..... There books are toooooooo complex for me to bother investigating, but I do have concerns they may be placing expenses (software etc ) on thier balnce sheet as assets and hence that may justify the debt.....This is not fact , its just one possibility I have come up with....

If thats the case , even though they can depreciate those assets , there will inevitably remain high replacement costs or write downs of assets at some point in time.....None the less their position seems to have hit the bottom 18 months ago and seems to me to be improving each report since.

The fact thats not reflected in the current price due to investor anxiety over a possible split / NBN outcome is a positive for a buy.... on correction of course...

[syang12]

The market was weak recently, while Tls is quite strong. I belive it's safe to have some Tls as XAO is still in the high position. I changed ANZ to TLS last week. Any suggestion?

[McCoy Pauley]

I suggest you do your own research, syang12. No member of ASF can give you financial advice.

I have to confess that I'm bearish on TLS long-term. The NBN has the big ability to really reduce the income earning potential of TLS and unless TLS can negotiate a favourable outcome with NBN Co., there is the potential for NBN Co to wipe billions off the assets sheet of TLS.

I'm not sure about the pedigree of the CEO, either. I do have confidence in the chairperson, having seen her work wonders at COH in a previous role. But the CEO will need to be very adroit at working through the political ramifications of the NBN. In going up against Sen. Conroy, David Thodey will need to be very politically astute.

I'm also concerned about the extremely high debt to equity ratio of TLS.

[Trembling Hand]

I have to confess that I'm bearish on TLS long-term. The NBN has the big ability to really reduce the income earning potential of TLS and unless TLS can negotiate a favourable outcome with NBN Co., there is the potential for NBN Co to wipe billions off the assets sheet of TLS.

I'm not sure about the pedigree of the CEO, either. I do have confidence in the chairperson, having seen her work wonders at COH in a previous role. But the CEO will need to be very adroit at working through the political ramifications of the NBN. In going up against Sen. Conroy, David Thodey will need to be very politically astute.

I'm also concerned about the extremely high debt to equity ratio of TLS.

Yes the management question. After trying a radical and getting burnt and ridiculed they have swung the other way which is a shame as the company seems to have a cultural problem that they just cannot shake. It seems strange of Thodey to state that they need to focus on their appalling customer service or perception of it, yet pretty much go about the same old same old. With the same old mangers that are indoctrinated in the telstra way of doing the same poor job :confused:

The board has a meeting soon. Wonder what great ideas will come of that? Will be a good idea of Thodeys vision/ideas or lack there of.

On the NBN as a long term idea it could be good one. Drop all the old assets into it while taking care of debt/cash injection then ramp up their 3G over the top of the government's NBN as a better, cheaper more convenient system.

[syang12]

I suggest you do your own research, syang12. No member of ASF can give you financial advice.

I have to confess that I'm bearish on TLS long-term. The NBN has the big ability to really reduce the income earning potential of TLS and unless TLS can negotiate a favourable outcome with NBN Co., there is the potential for NBN Co to wipe billions off the assets sheet of TLS.

I'm not sure about the pedigree of the CEO, either. I do have confidence in the chairperson, having seen her work wonders at COH in a previous role. But the CEO will need to be very adroit at working through the political ramifications of the NBN. In going up against Sen. Conroy, David Thodey will need to be very politically astute.

I'm also concerned about the extremely high debt to equity ratio of TLS.

Thanks, McCoy Pauley.

I'm quite new to the market(only 10 months) and very new to this forum. I'd held ANZ for almost 9 months. It gained more than 40%. However, during the same period, Tls remained silent. That's why I switch from ANZ to TLS. Plus the company devidends are coming soon.

And you are right. I need do more research on the company and industry background.

Thanks again:)

[lcl999]

I still think that the best strategy for TLS and its long suffering shareholders is to split the company. Current shareholders get one for one in, say, Telstra Utility(TUT) plus one for one in, say, Telstra Info. Technology (TIT).

TUT runs the NBN and the existing copper network. There should be no incentive to favour any perticular customer. Good boring safe low risk income from a utility.

TIT can get on with the business of selling mobile phone services, internet services, and whatever comes next. And can also look to do the same overseas. Higher risk and volatility, and higher potential for profit.

The current situation will have TLS senior management continually fighting the govt. and the regulator rather than focussing on new revenue.

[McCoy Pauley]

Bill to split Telstra delayed again by the Government.

http://www.theaustralian.com.au/business/bill-to-split-telstra-delayed-by-the-senate-again/story-e6frg8zx-1225825242498

Interesting to see how this plays out. The last TLS said anything official was back in mid-December 2009 when TLS announced that it had agreed the foundations for the negotiations with the Government.

As I noted above, I'm bearish on the long-term future of TLS. Sen. Conroy will like nothing better than to whack the Opposition over TLS and that, IMO, means that TLS will suffer, just so that Sen. Conroy can trumpet to the voters that, unlike Sen. Coonan and the other Liberal telco ministers before her (Alston, I think?), Conroy can control TLS and get TLS to dance to his tune.

[DeCal]

I think a bearish outlook on TLS is a safe outlook. They've minimal growth potential and a lot of regulation risks.

But maybe I am bias as they've done wrong be me too many times!

[McCoy Pauley]

1H10 report out now - see here (http://www.asx.com.au/asxpdf/20100211/pdf/31nmvf8q4wwy9t.pdf).

Revenue and profit both down on the corresponding period from 2008/09. Dividend held at the same level (14c per share fully franked). Operating expenses fell 4.8%, which was a bigger fall than the revenue fall.

Interesting to note TLS' comments on the discussions with the government concerning the NBN. They're very short, as far as I can tell.

[ROE]

I think a bearish outlook on TLS is a safe outlook. They've minimal growth potential and a lot of regulation risks.

But maybe I am bias as they've done wrong be me too many times!

watch that PSTN decline, initially 1-2% then 4.x% now up to nearly 7%
it's a scary trend ..if it decline any faster they are in for a rude awakening

with smaller rival taking their broadband and wireless market how are they going to make up for PSTN lost revenue?

plus broadband market is now is fairly complete and saturate, they have to steal rival customers and with price struture like TLS I doubt many will move over...

PS: this quater they can add me in as 1 more getting rid of LAN line and all mobile and VoIP all with iinet :D

[Boognish]

plus broadband market is now is fairly complete and saturate, they have to steal rival customers and with price struture like TLS I doubt many will move over...

I can confirm this. Just went shopping for ADSL and TLS were the most expensive of all I looked at, even moreso if you don't want to use them for your landline.

[McCoy Pauley]

TLS share price absolutely pounded down today (almost 6.0% drop). Missing market expectations and no update given on the negotiations with the Govt on the NBN really hammered TLS today.

[BrightGreenGlow]

Mmm, last week TLS suffered 2 big DOWN days... interesting to note that the Government FF will be able to sell their shares again soon..... may find TLS to be under the $3 mark?

Surely TLS must make a deal of some sort and be a big player in the NBN.... one can only help this news raises the share price to atleat $3.34 so I can come out even....

Its sad that the Government is constantly ******* TLS in the rear end. :(

[drsmith]

Its sad that the Government is constantly ******* TLS in the rear end. :(
To be fair honours here have been shared somewhat between the Government and TLS's management/board.

There has been a long history of poor decisions by the board of directors itself. These include;

1) Purchasing overpriced assets at the height of the dot-com boom (Who remembers Reach ?).
2) Going to war with the government over FTTN (Sol Trujillo).
3) And more recently not adapting quikly enough to changing market conditions.

[Trembling Hand]

2) Going to war with the government over FTTN (Sol Trujillo).
3) And more recently not adapting quickly enough to changing market conditions.

I'm not so sure about that. it was the war of the wholesale pricing that did the damage yet I'm not so sure they had any other way to go, maybe a tactical change but still they had to fight the battle. And really it was with Samuel & competitors.

And on the adapting to changing market thats just wrong. Telstra is in first position with new tech, note the world first roll out of 3G Dual Carrier just announced. The unavoidable problem is that their highly profitable PTSN business is fading away very fast. They are positioned to cover it but they will not have a monopoly in it. There is nothing they can do about it, Monopoly is gone. That is where their problems lie.


Just on that upgrading of 3G, ever increasing the pressure on Conroy's 50 bil disaster. Thats where their biggest advantage now is, spread of fast 3-4G wireless.

[BrightGreenGlow]

Some good points there.... where do you guys see the TLS price by mid year though? Say if the FFund sell another heap of shares, could we see it in the $2.80s??

[drsmith]

I'm not so sure about that. it was the war of the wholesale pricing that did the damage yet I'm not so sure they had any other way to go, maybe a tactical change but still they had to fight the battle. And really it was with Samuel & competitors.

They could have submitted a valid proposal in relation to FTTN.



And on the adapting to changing market thats just wrong. Telstra is in first position with new tech, note the world first roll out of 3G Dual Carrier just announced. The unavoidable problem is that their highly profitable PTSN business is fading away very fast. They are positioned to cover it but they will not have a monopoly in it. There is nothing they can do about it, Monopoly is gone. That is where their problems lie.

PTSN is fading much faster than the directors anticipated judging by the revenue downgrades.



Just on that upgrading of 3G, ever increasing the pressure on Conroy's 50 bil disaster. Thats where their biggest advantage now is, spread of fast 3-4G wireless.
What's the garantee that the NBN will even go ahead in any substantive form ?

Policy failure seems to be this government's defining characteristic.

[malachii]

Some good points there.... where do you guys see the TLS price by mid year though? Say if the FFund sell another heap of shares, could we see it in the $2.80s??

If you take out the dividend (14cents - goes ex on Friday) it is already trading below $3 and i'm willing to bet that a lot of people are only holding until it goes ex. I think more blood letting will start monday.

My opinion only and I hold no shares - although I infrequently short term trade it.

malachii

[Taltan]

I don't have much faith in TLS board however at 28c dividend any price under $3.20 is still a bargain. We're talking 8.75% + franking credits return per annum, no need for Capital Growth.

What I have faith in is that if the govt hammers TLS anymore the dividend will drop and then lots of mums and dads (who vote) will not be happy. A lot more voters hold TLS than any other stock, it all very well for Rudd to prop his NBN (knowing that a lot of voters only care about the dividend) but anymore squeezing of TLS and voters will not be happy. Thus I'm tipping that all else being equal TLS will hover around $3-$3.50 for awhile making enough cash to pay the dividend.

8.75% not bad value, especially as there is a small chance of upside. Just my $0.02 worth very interested if other people think I should sell it all.

[Trembling Hand]

I don't have much faith in TLS board however at 28c dividend any price under $3.20 is still a bargain. We're talking 8.75% + franking credits return per annum, no need for Capital Growth.

Thus I'm tipping that all else being equal TLS will hover around $3-$3.50 for awhile making enough cash to pay the dividend.

8.75% not bad value, especially as there is a small chance of upside.


If the PSTN is 30% of their biz and its falling at a rapid rate, in fact falling at an accelerated rate, and their other juicy biz is under pressure from competitors. How long is that 8% div gonna last. There's a fair amount of unknown risk in that div I reckon.

[Taltan]

They still own the last mile of copper to the home and they're in a pretty defensive industry. Also PTSN is surely not news. I agree the 8.75% could drop but I doubt by much.

There's a lot of regulation risk in the current price and I think that if it starts to fall away too much I bet our pollies would rather change some laws than annoy the voters. Profits maybe dropping but if you modify ACCC/NBN rules TLS becomes very profitable.

I view TLS like the banks, if they make too much the govt brings out the sledgehammer (so upside is minimal) however there's definately a floor to keep paying that dividend

[ROE]

Keep holding and hoping TLS will do better and turn around but 10 years of under-performing I cant see much future ahead.

TLS may own the last mile but if people dont use them, how are they going to make money?... People gone wireless, mobile and ditch PSTN all together

and remember PSTN margin is big and fat, for every bucks they lose in PSTN they need to make more than one buck else where to retain the same profit. :eek7:

I see TLS holders in the same basket case as Fosters :-)

hoping each year their share price will increase only to face one disappointment after the other...

TLS do have a moat but they dont know how to defence it that moat is disappearing fast each day as their small rival keep dig in a few percent each year

then you look at a small player like CAB who has iron grip on taxi payment system and it can fence off rival 10 or 100 times its size...Visa got a bloody nose and Mac bank got bloody nose when they try to cut into CAB market.
they all either quit the game or play by CAB rules :D

Have patient if you want TLS you can get them below $3 very soon...as soon as future fund start selling a few more percent :D

[Iggy_Pop]

ROE, I have to agree with you. I am thinking about selling my Telstra shares as there is little chance of upside and many reasons for downside and dividend reduction. The only hope is the NBN outcome does something to boost the SP, but that when I will sell and move on to something else.

[malachii]

Taltan,

The 2 problems I have with your theory are:

- While at first an 8.75% return sounds great, if the price drops (as I believe it will) then you are losing $. It wont take long for you too eat up your whole dividend on capital loss. I don't know what you paid for your shares but if you have bought anytime in the last few months - you may already be sitting on a loss the size of the next div - or maybe more. If you've owned the shares for years you have either made a large capital loss (shares were above $9 i think at one stage) or - if you bought them on the initial float - you have made no capital gains for years. Even if you were astute enough to buy them below the current price - you still will have seen very little capital growth and I suspect more likely a loss.

You say yourself that there is not much hope of capital gain so again - your money is not working that hard and with massive bad news around and a very large shareholder making it known they want to unload large amounts of stock - your downside risk is quite high.

- The other problem I see is with the div itself. The company has for years been borrowing money to pay the dividend. This cannot go on forever. The age old response "we'll pay it with future cashflow growth" is looking less and less plausible as they are now admitting their "cash cow" - the PTSN - is declining at an accelerating rate. Unless they can pull a "non capital intensive" cash cow out of the hat - surely dividends must reduce. This will cause a decrease in share price and now we've been hit with a double loss - a capital loss and less dividend.

This is my opinion only - I dont hold Telstra although I admit I am watching it in case of a short term trade.

Just to finish I'll give you a real world example. My mother bought both TLS and WOW when they first floated. For the first few years she made good money out of both but then the inevitable - "I need some cash for..." came and she decided to sell WOW because TLS was paying a better dividend. The difference in her returns between then and now are such that I refuse to calculate them because I know it will only cause her more grief!

malachii

PS - FWIW the "last mile of copper" is now pure B.S. We moved house 6 months ago and we decided not to get a home phone. We use our mobiles and I use wireless internet. We went from having everything through Telstra to nothing - and the only difference we notice is we dont have any problems. We are not the only ones!

[drsmith]

At a yield of 8.75% fully franked, Mr Market is now factoring in a reduction in expected future dividends.

[bloomy88]

At a yield of 8.75% fully franked, Mr Market is now factoring in a reduction in expected future dividends.

But then again, Mr Buffet doesn't think much of the manic depressive Mr Market...
Still, it looks like TLS will get hammered in the short term as a result of their poor results and the stalled NBN deal

[Taltan]

And so today TLS have sent a letter to shareholders outlining their objection to the NBN legislation. As per my previous posts I suspect this letter is not to shareholders - its to voters. The board's rightfully trying to fight back & next could be a letter advising voters of their reduced dividend around election time.

Its politics from here on in and the market at under $3.20 still favours Conroy to be victorious.

[Mofra]

If the PSTN is 30% of their biz and its falling at a rapid rate, in fact falling at an accelerated rate, and their other juicy biz is under pressure from competitors. How long is that 8% div gonna last. There's a fair amount of unknown risk in that div I reckon.
True - also worth mentioning that much of the growth in their other "juicy biz" will be limited by mobile bandwidth - the bandwidth with a competitor's holding that will now be combined into the largest single holding due to the merger of Hutch & Vodaphone. The upside is limited and the risk is big - growing competitors, outdated business and the dreaded legislation risk from a government that still remembers the combatant Sol years.

*Insert whiny gen Y voice here* "Copper network is sooo last century"

[Trembling Hand]

And so today TLS have sent a letter to shareholders outlining their objection to the NBN legislation. As per my previous posts I suspect this letter is not to shareholders - its to voters. The board's rightfully trying to fight back & next could be a letter advising voters of their reduced dividend around election time.

Its politics from here on in and the market at under $3.20 still favours Conroy to be victorious.

And so they should.


NBN Co Exposure Draft Legislation
On 24 February, the Government also released draft legislation that would govern how NBN Co is operated
and regulated. Although this is only draft legislation, it raises for the first time the prospect of NBN Co becoming
a Government-funded retailer, not just a wholesale network provider. Such an outcome would run counter to the core purpose of the NBN and the Government’s primary policy objective of restructuring the industry to have separate providers for retail and wholesale fixed network services. We are very concerned about this potential change in the Government’s position. If enacted, we would need to factor this into the
http://www.telstra.com.au/abouttelstra/investor/docs/tls724-shareholder-letter.pdf

It beggars belief that they, Conroy, are now trying to add the "option" to also retail. Its just truly stunning. Isn't it??

[UMike]

And so they should.


http://www.telstra.com.au/abouttelstra/investor/docs/tls724-shareholder-letter.pdf

It beggars belief that they, Conroy, are now trying to add the "option" to also retail. Its just truly stunning. Isn't it??

Nothing this government does atm stuns me. :(
Really hope they get voted out at the next election or at least get a masive wake up call.

[McCoy Pauley]

The letter gives nothing of comfort to current investors and it's little wonder that TLS has hit a new all-time low today.

:banghead:

[Frank D]

TLS

Looking at TLS there is a potential move towards the lower levels
@ 2.47-$2.58.

If it gets that low I'd be happy to BUY it.

If it doesn't get that low i'll use a swing pattern in April as support.

[sptrawler]

If NBN Co has all the backbone infrastucture and can also be a retailer and the government funds it all with taxpayers money. If it sells out in 5 years who would buy it when it is just a repeat of Telstra. 10 years down the track the government could do the same again. Sell the publics asset to the public and then shaft them, talk about history repeating,what a scam.:banghead:

[jake]

Last Thursday in the Australian Financial Review it was reported that Telstra (TLS) would soon do an International Road Show.

Surely the roadshow would lead to a rise in the share price.

Also with the NBN letter to shareholder having gone out and leading to panic selling the shares may have already bottomed.

The Labor Party would probably like to have the NBN matter resolved in the next six months prior to the next federal election sometime this year.At that time if the NBN matters are resolved Telstra shares may rise considerably.

Always seek the advice of a sharebroker before buying these or any other shares. I may be right or wrong.

[McCoy Pauley]

I hear what you're saying, Jake, but as a long-term holder of TLS, I still feel that there's more downside on the SP before it turns the corner.

Conroy and the Commonwealth Government are clearly intent on belting TLS around the head with the NBN Co, and there's no doubt that the inclusion of a possible retail side to NBN Co in the draft legislation was intended to send a strong message to TLS management.

In my view (and everyone should do their own research), there's no compelling reason to buy TLS. I'm continuing to hold because I don't feel like selling into such a weak market, but I think the SP could sink further over the next few months.

[SuperGlue]

Any possibility of Telstra being a takeover target by a foreign Telco????????????????????????????????????????????? ?????????????????????????????????????????????????? ???????????????????????

[oldblue]

Any possibility of Telstra being a takeover target by a foreign Telco????????????????????????????????????????????? ?????????????????????????????????????????????????? ???????????????????????

Nothing's impossible but why would anyone else want to step into Telstra's shoes and take on the Commonwealth Government?

Especially a foreign telco?

Telstra's battles are similar to those experienced by British Telecom and Telecom NZ. In both cases, the telcos have come off second best and have had to adapt to govt policy and regulation. And no-one else has wanted to buy into those particular fights.

[Mofra]

Any possibility of Telstra being a takeover target by a foreign Telco????????????????????????????????????????????? ?????????????????????????????????????????????????? ???????????????????????
Some of the big foreign telcos already have a presence here, and they would not want to buy into the shrinking market of copper infrastructure and the associated regulatory dramas that Telstra face.

A major telco wanting to establish a presence here would focus on higher margin product offerings and leech off whichever carrier would sell them bandwidth/exchange space.

[McCoy Pauley]

The Liberals have flagged that they will vote against the bill to break up Telstra in the Senate and Sen. Fielding has indicated that he will also vote against the bill.

There's a possibility of at least one National Senator crossing the floor, as the Nationals apparently believe that the break-up of TLS will lead to improved services in regional and rural areas.

http://www.theaustralian.com.au/business/industry-sectors/telstra-plan-hits-a-wall/story-e6frg9hx-1225838885252

[sptrawler]

At least Nick Minchin is calling it as it is, blackmail by the government to re-nationalise Telstra as the NBN for minimal cost. The joke with it all is then they are going to re-float it again in 4 to 5 years. If the Government want open competition in the Telecommunication industry why don't they build their own infrastructure and then float it in competition with Telstra. This would also force Telstra to update their infrastructure. Lets hope common sense prevails and Conroy stops head butting. Then us share holders may get some peace, that would be nice.:D

[McCoy Pauley]

Yeah, if you can get a hold of hansard for the Senate debates yesterday on the bill, it makes for some interesting reading as a holder of TLS.

It's interesting to note that since the Opposition and Sen. Fielding publicly said they would oppose the passage of the bill, the TLS sp has rebounded a few percent and reached as high as $3.10 this morning (but is now about $3.07-$3.08/share).

[ers_6]

shouldve bought in around the 2.50 mark.
win some you lose some i guess...

anyone see a downturn around the corner considering the speculation at present?

[sammy84]

TLS $1b debt issue:

http://news.theage.com.au/breaking-news-business/telstra-sells-1b-euro-of-10year-bonds-20100316-qarp.html

Apparently used to rollover old debt facilities, nevertheless I can't help but think this is a test of the waters.

Could be building a war chest which would be used to start their own independent NBN. If this was to happen, logically a reduction in dividends would follow as well.

All pure speculation

Dis: I don't hold, but would like to see TLS turn around for all those suffering holders out there.

[trainspotter]

I am going to go "disgruntled postal worker" on Telstra and stop shooting when I run out of bullets. I have NEVER had service as bad as what I have just received from TELSTRA !!!! I moved from one premise to another and asked Telstra to changeover the phone lines. Very straight forward you would think?? Instead they have changed my account from a Home Budgetline to a Business line and have sent the bills to the premises (which is a storage shed and the phoneline is for an alarm system only) which has NO letterbox as it is a commercial storage shed (Did I mention this before?) Therefore they have now cut off my phone and sent me off to CRAA to really p*ss me off .......... *hand me my shotgun* Never mind that I have 3 mobiles and 7 other landlines with this same company ...... at no stage did they try and call me or text me to advise the accounts had not been paid? Nevermind that I have been with Telstra since 1991 and my mobile bill is regulary $500 per month. Don't even consider the fact that every other bill I have had with them has always been paid on time etc. *reload*

GRRRRRRRRRRRRRRRRRRRRRRR @ TELSTRA !!!!!!!!!!!! SREKNAW & SDRATSAB :eek:

[drsmith]

*reload*

Sometimes mistakes get made. When you have holstered the gun, contact Telstra to get the issue resolved.

Their response will be a truer measure of their customer service.

[trainspotter]

*Thanks drsmith* ...... I have been on the phone to Telstra since 9.43am this morning. I was transferred to Adelaide, Brisbane and the Phillipines and finally I think Pakistan (I could not understand a word he was saying). All to no avail. Put on hold then transferred to another department until finally they cut me off. I then went to the Telstra Shop to try and resolve the issue. This took a further 1 hour and 20 minutes of my life that I will never get back. The Telstra Shop were fantastic !!! (feel the sarcasm) and gave me another number to call (Credit management apparently) I have since checked my watch and it is now 1.54pm WST. Guess what ! I am on hold to Telstra AGAIN !!!!!! Credit management put me through to connections but they wont reconnect in the correct name until the bill is paid. SO WHY AM I PAYING FOR A BILL that I did not want in the first place. ??????? *reload*

[trainspotter]

Still on hold ........ *pull* ...... Now been put through to billing ....... *reload* ......... not their fault ......... *pull*

[skyQuake]

Still on hold ........ *pull* ...... Now been put through to billing ....... *reload* ......... not their fault ......... *pull*

I wonder how many people have shorted telstra out of pure hate. (or the basis that service this crap will come bite them later)
And made money from it. Oodles of money apparently, looking at the say the 10 year charts:p:

[trainspotter]

I wonder how many people have shorted telstra out of pure hate. (or the basis that service this crap will come bite them later)
And made money from it. Oodles of money apparently, looking at the say the 10 year charts:p:

Ummmmmmmmm ........ that will be me directly ! I am going to resort to carrier pigeon and beating of drums as my main line of communications in future as it has to better than TELSTRA ! Smoke signals, morse code, french horns ........ anything has got to be better than this !!!!!:mad::mad::mad:

[awg]

*Thanks drsmith* ...... I have been on the phone to Telstra since 9.43am this morning. I was transferred to Adelaide, Brisbane and the Phillipines and finally I think Pakistan (I could not understand a word he was saying). All to no avail. Put on hold then transferred to another department until finally they cut me off. I then went to the Telstra Shop to try and resolve the issue. This took a further 1 hour and 20 minutes of my life that I will never get back. The Telstra Shop were fantastic !!! (feel the sarcasm) and gave me another number to call (Credit management apparently) I have since checked my watch and it is now 1.54pm WST. Guess what ! I am on hold to Telstra AGAIN !!!!!! Credit management put me through to connections but they wont reconnect in the correct name until the bill is paid. SO WHY AM I PAYING FOR A BILL that I did not want in the first place. ??????? *reload*

lol..and your time is probably worth $100+ per hour.

I have just thought of a new business idea.

Establish a service company were low paid lackeys wait on hold for Telstra ( or Optus):p:

Notice if you ever phone Sales, you are put thru immediately to a well trained English-is-my-first language operator here in sunny oz.

All "after sales" enquiries are dealt with by a long wait, then a lottery dip to see if the operator 1) knows what they are talking about,2) has sufficient command of English to understand your issue.

I have just been dragged kicking and screaming to Telstra, cause I am on a tiny sub-exchange and nobody can be bothered installing updated equipment in it..so much for the NB F'N N.

Did you end up screaming filth into the reciever, when for the umpteenth time the voice recognition said " sorry I did not understand your selection"

I especially enjoy having the call terminated after a long fruitless wait in the queue:mad:

We have bad phone lines at my wifes business. An ex-Telstra employee mate has done extensive tests and the problem is in the Telstra cabling, but they are not interested because it is "within specs" (just)

[trainspotter]

I actually asked the automated recording "Put me through to a human that understands english" .. the response was "All of our operators are busy, you have been placed in a queue and your call will be attended to as soon as possible" followed by a large *CLICK* then a beep beep beep at the end of the phone .......... Aaahhhhhhhhhh TELSTRA !

On a brighter note I actually got through to a lady called AMY in NSW and she fixed the whole ctatsrophe for me in less than 10 minutes, stayed online whilst I was shoved from department to department getting sorted (credit management and reconnection) and actually credited back the incorrect amount that I was billed for. I asked for her direct number. She was not allowed to give it to me !!!!! PFFFFFFFFFFFFFFFFFFFTTTTTTTT !

As for the business idea to pay low paid lackies to listen whilst on hold is pure genius ! I like it !

[drsmith]

On a brighter note I actually got through to a lady called AMY in NSW and she fixed the whole ctatsrophe for me in less than 10 minutes, stayed online whilst I was shoved from department to department getting sorted (credit management and reconnection) and actually credited back the incorrect amount that I was billed for.
How did you manage that after all the drama earlier ?

Was it as a consequence of your earlier requests for assistance or did you start afresh ?

[sptrawler]

trainspotter join Optus. 3, Vodaphone, Virgin or Dodo and give us feedback on customer service. I look forward to the comments.:D

[BrightGreenGlow]

Telstra really arn't that bad. :( I say they own the infrastructure so they can charge the 3rd Party Operators as much as they want. Feels like FMG in WA with the whole train line thing. :(

[knightofsx33]

right now telstra is trading at a very cheap price. It is also a very strong company with a strong stance in its sector. There is always going to be minor faults with its service but it is only minimal and so we shouldnt focus on those small bad things. The big picture is that its a great company and its very cheap. Im buying right now and with just a 15 times earnings which is normal for this sort of blue chips the price target is at $6

[oldblue]

The market, on the other hand is wary about what effect increasing govt regulation might have on TLS. Every right to be concerned, IMO, considering recent past and similar heavy handed interference of telcos in Britain and NZ, just to mention a couple.

[Trembling Hand]

Yep oldblue and there is lots to add to that.

Clearly the break up looks bad for Telstra but I reckon there is more to it. Have a look at the price since new management came in. DOWN. Because its basically the same management. Same old people doing the same old crap.

The recent management "shake up" by Thodey did nothing to bring in new people to give a very tired old company a lift. All it did was set up structures to ease any break up. Hardly forward thinking in terms of profits.

Its not a turn around story.

[malachii]

When you take a good look at this company the only suprising thing is that it is still above $3. Lousy management, history of terrible results, no sign of doing anything different, I've not met anyone that is a happy cusomer and a government that is hell bent on destroying it. Even the dividend is starting to look a bit iffy. Why would you buy it?

malachii

[knightofsx33]

the management has done their job in my opinion the earnings has being steady and growing, what are u on about that its crap? the price is very low right now and if they get through this small rock in the way the future looks very bright.

knight

[Trembling Hand]

the management has done their job in my opinion The previous one created enemies with everyone. All they left behind was a supper wireless network that will/could be of value.

The current one has done nothing except say they are going to focus on customer service which back fired spectacularly as everyone knows their service is a disgrace and a mess. End result was that they have done nothing about it except realise that if they talk about it their customers just complain more. So now Thodey doesn't mention it. As far as management its the same old same old. Thodey had a chance to shake it up when he came in but his left the same people there to not fix the same old problems.


the earnings has being steady and growing, BS. Their meaty PTSN is accelerating downwards. Their Mobile voice is under pressure from optus etc. There wireless data is losing its premium price faster than they can add extra traffic. They will probably loss Foxtel. And there wholesale section.

Just what bits have been "steady and growing"?

"small rock" "very bright" :biglaugh: Too funny!!

[malachii]

the management has done their job in my opinion the earnings has being steady and growing, what are u on about that its crap? the price is very low right now and if they get through this small rock in the way the future looks very bright.

knight

I love it - I have a cheap bridge to sell you in Sydney!!!!

At the start of 2000 the share price of TLS was over $9.00. It has been on a steady decline over the last 10 years and is now $3.00. Shareholders have lost 67% of their capital in 10 years. On what planet or in what way does this show that managment is doing it's job???????

This small rock is about the same size as the small iceberg that took out the Titanic. They were probably saying the same as TLS - "If only we can get through this small iceberg in the way the future looks bright".

I'm sorry for being sarcastic but you touched a raw spot. No - I havent lost money in TLS - it is not a company I would buy. However it gets my goat when people (including professionals!) that should know better - come out with comments that are just complete rubbish and "hope" that others will react accordingly.

Before you jump down my throat - lets look at your statements:

"right now telstra is trading at a very cheap price. " Define cheap - with the current loss of market share, customer dissatisfaction and ageing technology the price may not be cheap. And has been proven many times - just because something is cheap doesn't mean it wont get cheaper.

"It is also a very strong company with a strong stance in its sector." It is a strong company - but so was Bear Sterns, HIH and many others that people will be able to list off around the world. The question you need to ask is - is it a company that is using it's strength to grow it's market or just abuse it's market. I think if you look at it's past record - you wouldn't be able to say that it was growing it's market share.

"There is always going to be minor faults with its service but it is only minimal and so we shouldnt focus on those small bad things." I'm sorry - but this statement takes the cake. I cannot think of anyone who can say this company has minor faults with it's service. Just listen to call back radio/read a paper/look on the internet and that will give you a bit of a picture of what is happening. Or better still - try and phone up and sort out a problem with them. If this doesn't put your blood pressure up into the danger area - I'd say you're already dead!

"The big picture is that its a great company"(on what measure - give me one - just one!) "and its very cheap."(again - huh??) Im buying right now"(good on you - a person with conviction and prepared to put his/her money where their mouth is) "and with just a 15 times earnings which is normal for this sort of blue chips the price target is at $6" Show me any professional in the world that has a target price of $6 for TLS.

Apologies in advance for any anger issues I have just caused.

malachii

PS -I HOLD NO SHARES IN THIS COMPANY. MAYBE THIS GIVES ME A NEGATIVE BIASED OPINION. YOU'LL HAVE TO DECIDE FOR YOURSELF. DO YOUR OWN RESEARCH.

[wecanallinvest]

I agree with malachii that $6 is a bit rich for TLS to go to, however I also agree with knightofsx33 that it is a buy right now for the following reasons:

- P/E of less than 10
- Dividends at around 9-10%
- Predictable, steady earnings
- Very low downside risk at current price compared to rest of the market

A lot of other stocks on the market are starting to look fully priced righ now, so I can only assume that investors will turn their eyes on to TLS in the near future because of the undeniable value to be had.

[oldblue]

It's stark disagreements on stocks such as above that makes a market!

For my part, I wouldn't touch TLS for the reasons already articulated. If I was buying, I'd be waiting until the SP showed a bit of strength. As Charlie Munger has said "The market can remain irrational longer than you can remain solvent " or words to that effect.

;)

[Taltan]

A p/e of under 10 for such a defensive stock is very attractive. You cannot compare a telco with a Bear Stearns or HIH.

Malachii a lot of your arguments may be correct but there are historical. Its the next 10 years we are concerned about and the current mnmngt team were not around in 2000.

I expect telecommunications to be an ongoing profitable sector whilst even regarding the NBN there is at least a $8b sale price on the table already. This is apart from the fact that only TLS currently has the ability to build the NBN. There are regulatory risks but if they weren't there the p/e under 10 would not exist.

What I do agree with is Do Your own Research.

[malachii]

Taltan,

The comparison was not between a telco but rather a company that is considered "strong".

As for TLS being considered "defensive" - I struggle with any company that has lost 67% of shareholders' value being called "defensive".

I would agree the things I have used to back up my opinions are historical - but all factual company analysis is based on history - your opening comment is value based on P/E ratio - a pure historical fact. We dont know the future. We can make best guess but usually this is based on the past, and the past shows this company sux.

Could you also expand on the comment about about the current managment team. Most of them were around in 2000 in senior managment roles. Stanhope has been there since 1967 and as CFO since 2003 even Thodey started in 2001/2002. Surely you cant argue that they are now going to "change" the company completely. They sure haven't made any remarkable changes yet. I'll admit they are taking a more concilitary role with the government - but this doesn't seem to have made any difference yet to either the NBN or their customer service generally.

TLS has as near to a monopoly as you can get. This (and as far as I can tell - only this) is it's one redeeming feature. And even this seems to be slipping through it's fingers.

If this stock can get back to $9 in the next decade - I'll be astounded (but there again - I have been wrong many times before!). Even if it does though - it will only be back to where it was in 2000. That is not a great return on investment. If the biggest shareholder (government through the future fund) thought it was a good buy - do you really think they would be offloading large chunks?

malachii

[Taltan]

Dont get me wrong $6 is a long strech and $9 is fanciful. But you have to weigh it up for the price you can get it - approx $3. My only argument is that due to its monopoly, large voter base and being in a defensive industry (the industry is defensive not the particular stock) it can't go to $0 either. In fact if it stays at $3 and maintains 9.3% fully franked dividends your doing well.

Historically there have been a lot of mistakes most notably bringing in an American to act out what is essentially a political role, basically akin to appointing a foreigner to run for PM. Thodey is more aware of our tall poppy syndromes and is taking a smarter approach.

Of course only time will tell

[vincent191]

In fact if it stays at $3 and maintains 9.3% fully franked dividends your doing well.



Telstra is a GREAT investment. It is the only Company in the world that can maintain a very high dividend whilst profits and cash are going south.

[snowking]

Was this the news that gave Telstra's sp a bit of a spark today


Australia's proposed A$43 billion national high-speed broadband network could be built cheaper and faster with the involvement of Telstra Corp. (TLS.AU), Australian Communications Minister Stephen Conroy said Monday.


http://online.wsj.com/article/BT-CO-20100412-702937.html?mod=WSJ_World_MIDDLEHeadlinesAsia

[snabbu]

The previous one created enemies with everyone. All they left behind was a supper wireless network that will/could be of value.

The current one has done nothing except say they are going to focus on customer service which back fired spectacularly as everyone knows their service is a disgrace and a mess. End result was that they have done nothing about it except realise that if they talk about it their customers just complain more. So now Thodey doesn't mention it. As far as management its the same old same old. Thodey had a chance to shake it up when he came in but his left the same people there to not fix the same old problems.

BS. Their meaty PTSN is accelerating downwards. Their Mobile voice is under pressure from optus etc. There wireless data is losing its premium price faster than they can add extra traffic. They will probably loss Foxtel. And there wholesale section.

Just what bits have been "steady and growing"?

"small rock" "very bright" :biglaugh: Too funny!!

I would make a couple of comments
1: Fiscal matters
(a) Bond issue oversubscribed I think 6 times 1.5 B euro 20 years at 4.25%
About half the going rate for Greece.

(b) We are in the box seat we can use our copper until it becomes uneconomical, then and only then we can become the NBN's customer. We don't need to do this all at once we can do it area by area.

2 Political matters
What is it about share analysts that makes them ignore the political aspects of the TLS price. Whether you like it or not if you have super you own TLS
I think there are also 1.5 million Ma and pa Telstra investors, I think they all probably vote. Have you heard of vote buying?

The NBN has to give the board something to put to me, that I might accept, I am currently so pissed of with the labor party that there is a premium on my acquiescence. perhaps just perhaps we may say " give us something that doubles the share price or go **** yourself Kevin" Who knows what we may say. But this has little to do with value. A bloke that will spend 900K on a shade house will surely give me $6 or $7 for my tls. Ok Maybe $4.50 would be sweet. For get the value feel the politics.:-)





Cheers

Gary the Good

[drsmith]

While this government likes to splash the cash I can't see it offering $4.50.

If it was to offer $3.60 it could gloat an 11% pre tax return through the dividends for investors who participated in T3. Not bad when comparing to how investment markets have fared over the same period.

In any case I suspect most Ma and Pa direct shareholders would be Coalition supporters regardless of the fate of Telstra.

[snabbu]

While this government likes to splash the cash I can't see it offering $4.50.

If it was to offer $3.60 it could gloat an 11% pre tax return through the dividends for investors who participated in T3. Not bad when comparing to how investment markets have fared over the same period.

In any case I suspect most Ma and Pa direct shareholders would be Coalition supporters regardless of the fate of Telstra.

I suspect you are correct in regards to politics however you have to understand that Krud like all politicians is delusional.

I'd be happy with anything over $3.20 as I was dividend stripping, the price just dropped a bit more than I expected, although I think we are only at about 45 days plus 2 and the price has almost recovered to pre dividend levels, so 6.25% after tax in under 60 days is not to be sneezed at.

Today will be interesting

Cheers

Gary

[drsmith]

I suspect you are correct in regards to politics however you have to understand that Krud like all politicians is delusional.

Politicians are not delusional, they just concentrate a little too much on their short term political well being.

If the government purchased Telstra back at $3.60 per share it would cost about as much as the BB network. They could then use it'as cashflow/sell off parts of the business over time to roll out the BB network.

Sounds good in principal but I suspect in practice it would be political suicide. The opposition would (should ?) have a field day if the government did that. It would be low on the government's list of options.

[sptrawler]

Maybe I am missing something, but can some one explain to me how Telstras maket capitalisation is less than Singtel's(Optus). When Telstra owns the infrastructure, makes a massive amount more profit than Singtel(Optus) and pays a much bigger dividend. Maybe people are over reacting and the sum of Telstras parts are worth more than people are factoring in. If Telstra sells it's infrastucture and gives a return of capital to share holders of say $1-2. Then it becomes a carrier the same as Optus but with a much broader wireless network and also has its national service obligation lifted and the punitive regulation that stops it offering equivalent products as other carriers cancelled out. It would be a much stronger carrier than Optus and one would think it's share price would reflect that. One can only hope or maybe I am missing something.:eek:

[ChilliBlue]

Let us not forget that TLS also owns a substantial chunk of Foxtel which other players are desperate to get their hands on.

[malachii]

Singtel own much more than just Optus so the comparison is unfair. They are a massive international telecommunications company and Optus is only a small chunk. You cant take the whole value of Singtel and value Optus at that amount and compare it to the whole of TLS.

malachii

[shinobi346]

I have to agree there. Here in Australia telstra is massive, but overseas, singtel, virgin group, vodaphone and three are massive corporations.

[sptrawler]

So therefore Malachi and shinobi346 why is the Government try to stuff the little aussie battler instead of making these massive multinationals put some money up to put in infrastructure. No instead they will use taxpayers money and then the multinationals can use that. What a winner.:banghead:

[oldblue]

Intervention/regulation by the govt isn't just an Australian phenomenon. A very similar thing has happened in other countries, Britain and NZ included, as governments try to encourage more competition in telecoms.

As for competing against giants, it just so happens that they are the ones who happen to be interested. For example, in NZ, Telecom is up against the likes of Vodafone and Telstra, both many times NZ Telecom's size.

I don't invest in telecom companies. Too much govt interference.

:rolleyes:

[malachii]

Sorry sptrawler - are you saying that TLS is a good investment, pays great dividends, makes massive profits and is a bargain or that it is stuffed? You cant have it both ways.

malachii

[BrightGreenGlow]

I see the price lately has been hovering around 3.15 - 3.20 so this is decent and whoever bought them at 2.9 would have to be very happy at the moment. With the election creeping up surely a deal with be made and a favourable one at that for Telstra.

PS: Does Krudd realise Telstra is an Australian company yet Optus, Voda, 3 and Virgin are not? Does this not mean anything or is he yet again on his knees ready to accept with his mouth wide open? .... :banghead: :confused:

[oldblue]

I see the price lately has been hovering around 3.15 - 3.20 so this is decent and whoever bought them at 2.9 would have to be very happy at the moment. With the election creeping up surely a deal with be made and a favourable one at that for Telstra.

PS: Does Krudd realise Telstra is an Australian company yet Optus, Voda, 3 and Virgin are not? Does this not mean anything or is he yet again on his knees ready to accept with his mouth wide open? .... :banghead: :confused:

We need to remember that there are more voters than there are TLS shareholders.

Govts throughout the world have courted favour by appearing to deliver better telco services to their electorates by encouraging competition, usually at the expense of the dominant incumbent. eg BT in Britain, Telecom in NZ, TLS in Australia.

;)

[Mofra]

PS: Does Krudd realise Telstra is an Australian company yet Optus, Voda, 3 and Virgin are not? Does this not mean anything or is he yet again on his knees ready to accept with his mouth wide open? .... :banghead: :confused:
Virgin is just a CSP though - all traffic flows through the troika of major carriers through interconnect agreements so isn't a huge player in the local telco industry.

Given Sol's fractuous relationship with the Government, it's no surprise the government is going to look at ways to reduce Telstra's dominance of the marketplace (approx 2/3 of the market according to the ACMA's eligible telco revenue figures). Thodey has more than a few bridges to mend in Canberra, and in an election year one has to question how much time he has to do it.

[sptrawler]

Actually malachi what i am inferring is the Government is playing with fire. They will have to either give Telstra a fair and equitable price for its infrastructure or the shareholders won't accept it. Then the Government has a real problem, build its own infrastructure which it can't afford to do or scrap the NBN which it should do but is politically another back flip. If it decides to build it,who is going to jump onto a fibre fixed line when it will cost more and when people are leaving fixed line connections in droves. If the take up is low how will it be funded? Maybe the Government will treat it like sewage and water and force owners to pay for it when it goes past the house, political suicide. So malachi it is just a punt on who will blink first. One thing for sure is Telstra owns it and is making money from it, the Liberals if they get in will reduce spending and Telstra should be off the radar. If Labor keep going the way they are, another potential $43billion stuff up will see them out in the wilderness for another 20years.
It is a dead set loser for Rudd and I think that makes Tls a potentially good buy at around $3. But as with all shares it is just a punt on outcomes. I have taken the plunge on Tls again hope I don't get burnt again. :rolleyes:

[boofhead]

sptrawler: Any references to say using FTTH will be more expensive for the consumer? So far it is mostly only opinions.

Reason why I ask is Internode's heavy plans for fibre are cheaper than resold TW plans. So as a consumer it would be cheaper for me to ditch copper and switch to fibre. I'm not sure about plans for phone calls using typical phone devices though. Internode may not be the best example as they often have a premium but their site does list FTTH and ADSL plans. You could probably do the same exercise with iiNet.

[sptrawler]

boofhead, I don't have any references but I am making an assumption that there will be some kind of cost associated with a multiplexing device required at the home and also some form of labor and materials cost to pull out the copper and pull in the fibre. Also one would assume for a $43 billion outlay there would be some form return on capital required, maybe the taxpayer will wear it. But from information available on the net, places that have the superfast broadband have not seen a corresponding superfast take up of the services. At the end of the day it will depend on the cost, most people just browse and that speed is governed by the site you are viewing.

[boofhead]

Copper is Telstra's asset. It is up to Telstra how it manages it. That is not an expense for FTTH.

Some FTTH deployments are exclusive to some fibre wholesalers which limits ISP choice. Also not many ISPs in the FTTH resale game. The Tasmanian stage 1 is in areas of lower population and generally lower socio-economic regions where there is a lower proportion of broadband users in general too.

Multiplexing etc. shouldn't be too bad as the depoyment is based off already deployed technologies and uses a lot of passive devices.

[Boggo]

From a charting viewpoint TLS looks like a good short at the moment.
Overall it does seem to be the direction of the trend.

(click to expand)

[drsmith]

Watching Stephen Conroy on ABC's Inside Business, one gets the impression he would like to grind Telstra into the dirt and would have no hesitation at using any amount of taxpayer's money and/or Legislative power to achieve that (either personally and/or as part of a broader ALP socialist agenda).

Political reality however suggests they need a successful negotiation with Telstra as they have failed in so many other policy areas but with this government you never know.

[Sainter]

I know I resent the government choosing to spend MY money on a very risky proposition that only pays a 7% return assuming all the positive assumptions come to fruition. In some cases, that is what is needed from a government, but when they are replicating a portion of what is already available or do-able by a listed company, and kneecap that company at the same time-absolute thuggery. And when you look at their record of achievement with 'big ticket' items (insulation/schools) I wouldn't trust them to do a competent job. The sooner the next election is held the better. I only hope the swinging voters appraise what has happened over the last 3 years and vote accordingly.

I hold TLS, and a few miners/energy companies for that matter, too. And I vote.

[Julia]

I know I resent the government choosing to spend MY money on a very risky proposition that only pays a 7% return assuming all the positive assumptions come to fruition.
Me too. But, as drsmith says above, this battle has become personal for Conroy now (as has the internet filter), and doesn't give a damn if he wastes taxpayer funds as long as he gets to kick TLS in the head.

[McCoy Pauley]

Looks like Alan Kohler shares the sentiments of a few posters.

http://www.businessspectator.com.au/bs.nsf/Article/Telstras-goose-is-cooked-pd20100507-57S9U?OpenDocument

[sptrawler]

As I stated in an earlier post the Government is between a rock and a hard place. This is even more highlighted when you read in the Australian that they are contemplating legislation to stop Telstra competing with them, legislation to stop Telstra getting access to 4 G wireless, legislation to make them sell Foxtel. It certainly doesn't sound as though they think they can do it without Telstra and it knows Telstra can cream them in the market place. The reason little Kev has put Conroy on the case is because he is a bully like Kev the only problem is everybody can see through them. Telstra is pulling offf a blinder and i for one think Conroy is a hiding to nothing. This government is on top of the ski slope Australia isn't ready for communism or a dictatorship yet. COME ON THE NEXT ELECTION BRING IT ON.

[sptrawler]

There was another thread how can you make Telstra profitable, I can't find it. However I have the answer at last, go into competition against the N.B.N, all the other carriers will jump on board with the N.B.N because they will supply discounted access at the taxpayers expense. Then Telstra will be allowed to supply a service on a level playing field because it doesn't have a supposed monopoly. Then the Government will screw all the other carriers to pay for the blown out cost of unwanted infrastructure i.e more landlines, that the taxpayer has funded but is now a huge millstone on the Government. Meanwhile Telstra has a company that supplies everything and it is payed for. Like I said before it is a hiding to nothing for the Government. Even now the legislation being proposed must be bordering on restrictive practice and from a Governments point unconstitutional and I am no lawyer. If it keeps trying to push a political ajenda by making laws to disadvantage a publicly listed company(that it floated) it must be leaving itself open to constitutional chalenge. ;)

[sptrawler]

This all sounds good for NBN, I think not.

http://www.theaustralian.com.au/australian-it/nbn-cos-zero-monthly-access-pitch/story-e6frgakx-1225871171154

[Boggo]

From a charting viewpoint TLS looks like a good short at the moment.
Overall it does seem to be the direction of the trend.


Nearly to the target, one more day should do it, and I got stopped out by 1 cent on the 6th.

http://www.aussiestockforums.com/forums/showpost.php?p=551600&postcount=663

You get that :D

(click to expand)

[sptrawler]

Well that was a good call BOGGO $3.20 down to $2.85 ,approx 12% fall nearly got it with an all ords fall of 5000 to 4200 approx 18% fall. Maybe Mincor $2.20 down to $1.30 or Panoramic or BHP would have been better calls.
Actually maybe it would be easier to show shares that only fell 12%, there wasn't many in my portfolio.

[Boggo]

Maybe Mincor $2.20 down to $1.30 or Panoramic or BHP would have been better calls.


Maybe I am misunderstanding what you are saying above.

Are you saying that you did pick or could have picked and did/could have posted your entry, stop and target for any or all of those three on the day after they peaked and they all went to your assigned target or are you just making a general hindsight comment after the event ?

http://www.aussiestockforums.com/forums/showpost.php?p=551600&postcount=663

[sptrawler]

Hi Boggo, It appeared from your post that the fall in the Telstra price was predicted in your previously posted chart. When in actual fact the fall was due to an overall fall in the market. I don't mind people taking credit where credit is due. It would be really creative charting to predict when Telstra is going to go up instead of down.LOL

[sptrawler]

Maybe I am missing something, but can some one explain to me how Telstras maket capitalisation is less than Singtel's(Optus). When Telstra owns the infrastructure, makes a massive amount more profit than Singtel(Optus) and pays a much bigger dividend. Maybe people are over reacting and the sum of Telstras parts are worth more than people are factoring in. If Telstra sells it's infrastucture and gives a return of capital to share holders of say $1-2. Then it becomes a carrier the same as Optus but with a much broader wireless network and also has its national service obligation lifted and the punitive regulation that stops it offering equivalent products as other carriers cancelled out. It would be a much stronger carrier than Optus and one would think it's share price would reflect that. One can only hope or maybe I am missing something.:eek:

Well Boggo I am not a chartist, but Telstra seems to be going against the market. If a deal is struck with N.B.N it could mean a decent return of capital and all the punitive, restrictive rules that apply to Telstra being lifted. At last there may be a light at the end of the tunnel.:banghead: What do you think Julia and Dr Smith?

[chb]

Telstra is the scum of the earth as far as i'm concerned

Yes I hold telstra shares, but not enough for me not to want the government to pummel them to the ground.

*hides from everyone* :o

Here's an example. Try to keep an open mind and pretend you don't hold shares and pretend you aren't blessed with decent internet. With decent i'm talking ~$70 a month around 8mb with maybe 30+gb

I'm currently living in an apartment serviceable only by a Telstra DSLAM. ADSL2+ is unnecessarily ridiculously expensive. So i'm on ADSL1 8mb and I pay for a phone line which has no phone connected to it. I know how much cheaper it can be as i've had ADSL2+ before in a different home.

Fast forward 2 months and i'm moving to a new estate.. yes NEW estate(<5 yrs). This estate is plagued by RIMS which are limited in available ports with some residents waiting for YEARS to get ADSL.. not ADSL2.. but ADSL in general.

Now to connect a phone line just to get an OPTION to apply for internet, I will have to dig a trench from the house to the box on the side of the house which with telstra's contractors is about $280. Then I have to pay a first time connection fee of $299. Then I have to pay a monthly fee of at least $20 just to get an option to apply. But what's the point of having a phone If i can't even get internet? I don't require a physical phone at all.

I'd have no hesitation paying that fee if I'd get a guarantee of an internet port which most suburbs have and you would expect new suburbs to have. But Telstra has gone on the cheap and installed RIMS to save their cost.

It's fked me over and it has fked over plenty of other people too. You may have been lucky but there are other people out there that have been screwed over.

I still hold the shares because I believe an agreement will be struck.

[sptrawler]

I understand your frustration and the Government is tying to pummel them into the ground, therein lies the problem.
Why would Telstra put in all the conduits and trenches in these new suburbs? What is the upside at the moment. The Government is wanting to buy the infrastructure on the cheap(written down cost base) so why put in more infrastructure. Even if Telstra puts it in for themselves the Government wants to legislate to stop them using it (cherry picking) legislation. So really get on to your local MP and get NBN on the job, maybe yours could be the first suburb(after Tassie). Meanwhile I for one think it is in the shareholders interest, not to be installing equipment for the Government at the shareholders expense.:D
On a final note can't wait to see what it costs you with the NBN $43B someone pays one way or another.:eek:

[sptrawler]

By the way chb I forgot to respond to the other part of your post, the one that mentions the apartment block serviced by Telstra. If the apartment block was easily serviced at a good return on investment one of the other service providers would be supplying a competing service i.e Optus, Iprimus etc. But obviously they don't want to.
This is the funny thing with the N.B.N, they don't want anybody cherry picking the high volume areas, but have been forcing Telstra to allow all the other carriers to cherry pick for years.
Like I have said on numerous occasions Telstra can take on the N.B.N on a level playing field and it will take a lot of draconian legislation to make the N.B.N a viable alternative. With the Governments socialist record this sort of legislation would put us in a real tailspin. Chairman Rudd isn't that stupid, well I don't think he is.:(

[chb]

Hi sptrawler, thanks for your meaningful response.

Here in lies the problem, I would have no beef with telstra and the NBN would not have existed or even have been required if telstra in the first place did things with quality and costed their items at reasonable prices. When you say with the apartment block that other ISPs can install their own equipment that is possibly true(i'm not sure if it is full or just not profit worthy). But what ideally would happen is that since telstra is such a large communications organisation they could have priced competitively but they've chosen not to do this to maintain maximum profits. They're paying for this now via the NBN.

Hopefully an agreement gets sorted out for all parties involved, telstra, the government and the people of Australia.

[Julia]

: What do you think Julia and Dr Smith?
Sorry, sptrawler, I haven't been following what's happening with Telstra.
Maybe consider that on the outside chance the Libs win the election, Mr Abbott has said he will not proceed with the NBN project. Has the government ever actually got round to doing a feasibility study on all the costings, including the take up rate from the public?

[sptrawler]

hi Julia,
From what I have read they have taken all their costings and business plan from KPMG. The take up in Tasmanian trail project has been low and the N.B.N has given access to suppliers (ISP's ) at a one of cost of approx $300 no ongoing monthly access charge.
As for KPMG in a report I read today they were reported as saying 3 weeks ago that the resources tax would have zero economic cost and in todays Aust Financial Review KPMG said it would be hard for miners to raise financing because of the tax. The report went on to say that KPMG will basically come up with the outcome you want if you pay the money. Sounds a bit like C.D.O investment ratings.
I am a Telstra shareholder for the #$%%time and this time I can see the monkey coming off Telstras back. Just hope Kev stays in long enough to pick it up and then all Australians can have the monkey instead of Telstra shareholders.

[sptrawler]

Hi sptrawler, thanks for your meaningful response.

Here in lies the problem, I would have no beef with telstra and the NBN would not have existed or even have been required if telstra in the first place did things with quality and costed their items at reasonable prices. When you say with the apartment block that other ISPs can install their own equipment that is possibly true(i'm not sure if it is full or just not profit worthy). But what ideally would happen is that since telstra is such a large communications organisation they could have priced competitively but they've chosen not to do this to maintain maximum profits. They're paying for this now via the NBN.

Hopefully an agreement gets sorted out for all parties involved, telstra, the government and the people of Australia.
Well cbh If you read back a few posts you would see that I was told Telstra is not such a large Communications orginisation. In actual fact Singtel(optus), Hutchinson(3), Vodaphone, Virgin are all bigger on a global scale, it is just they want to cherry pick and be parasites on your telecom system. Also the Government legislated to stop Telstra offering deals the same as the competition. Haven't you been noticing the loss of market share to Optus. If they were allowed to offer the same or better they would be creaming Optus. There is only one saving grace with the N.B.N. one would think Telstra will then not have to service all the country areas(how many Optus trucks have you seen in the bush) and will also be able to offer the same deals as the opposition. The difference will be Telstra have full national coverage the parasites don,t and won't untill the roll out of the N.B.N at taxpayers expense. Yeah lets support the freeloader!!!:banghead:

[sptrawler]

Actually malachi what i am inferring is the Government is playing with fire. They will have to either give Telstra a fair and equitable price for its infrastructure or the shareholders won't accept it. Then the Government has a real problem, build its own infrastructure which it can't afford to do or scrap the NBN which it should do but is politically another back flip. If it decides to build it,who is going to jump onto a fibre fixed line when it will cost more and when people are leaving fixed line connections in droves. If the take up is low how will it be funded? Maybe the Government will treat it like sewage and water and force owners to pay for it when it goes past the house, political suicide. So malachi it is just a punt on who will blink first. One thing for sure is Telstra owns it and is making money from it, the Liberals if they get in will reduce spending and Telstra should be off the radar. If Labor keep going the way they are, another potential $43billion stuff up will see them out in the wilderness for another 20years.
It is a dead set loser for Rudd and I think that makes Tls a potentially good buy at around $3. But as with all shares it is just a punt on outcomes. I have taken the plunge on Tls again hope I don't get burnt again. :rolleyes:

Well a few months on and at last someone is starting to call it as it should be. John Stanhope said in the Australian today that it may be better for Telstra to accept functional seperation. Does that mean Telstra shareholders get a share in the carriers infrastructure and a share in the biggest carrier with the largest footprint and all the restrictive legislation is lifted( YIPPEE). Then the government can either roll out its fibre to the home and compete with all the carriers including Telstra on a level footing. Or replicate Telstras backbone infrastructure around Australia(best of luck) and go into competition against Telstra at the wholesale level. Well lets see how many people want to pick up the fibre connection :D Then the tax payer has to start paying for the huge loss on lack of take up. But not to worry business and government got their high speed connections at taxpayers expense. Like i said, I think applying logics, Telstra are a bargain around $3 However when talking about this government logics can go out the window.

[boofhead]

The federal government has done a deal with Telstra giving NBNCo access to infrastructure. http://www.abc.net.au/news/stories/2010/06/20/2931852.htm has 9 billion for pit/duct access. Is that good or bad for Telstra? It is money but signs away a part of their earnings.

[Trembling Hand]

The federal government has done a deal with Telstra giving NBNCo access to infrastructure. http://www.abc.net.au/news/stories/2010/06/20/2931852.htm has 9 billion for pit/duct access. Is that good or bad for Telstra? It is money but signs away a part of their earnings.

The removal of the USO into a new company is a huge plus for Telstra. It cost them many many many millions per year. That alone from my understanding is a goodie. The price I think is pretty good also considering the decline in revenue from the fixed line.

Would think the plan being out would also be a short term plus.

[sptrawler]

Sounds good, even though it is early days and the finer details still to come out. Could be a great return of capital and dividends shouldn't be affected for some time. Like Trembling Hand said the service obligation monkey will be off Telstras back and the draconian legislation not allowing Telstra to compete with the other carriers should be lifted. Also from the sounds of the press release, compensation for structural seperation would indicate Telstra keeps its wholesale division for now. :D . Well Boggo it might have been your lucky day when you were stopped out by 1 cent, time will tell, my guess is they will fly on Monday. :D

[sptrawler]

By the way great pick up on the news bulletin Boofhead.:eek: Talk about hot off the press WELL DONE.

[ROE]

I like it :-) I bag out Telstra a bit but a couple weeks ago I sit down and work out fundamentals rather than emotion and I cant see a scenario where TLS share can goes much lower than $2.90 regardless of any out come
so I load it up at $2.92 :D

Upside is just too good for any down side...

Tomorrow will be a good day...

[ROE]

The federal government has done a deal with Telstra giving NBNCo access to infrastructure. http://www.abc.net.au/news/stories/2010/06/20/2931852.htm has 9 billion for pit/duct access. Is that good or bad for Telstra? It is money but signs away a part of their earnings.

any outcome is good for TLS :-) market like certainty
this is a good deal for Tesltra, I will read the fine prints when it available and see
but doesnt look too bad so far with that announcement ...

[Trembling Hand]

So it has to be asked whats the story if the libs win the election?? they have already said they will stop the NBN. Then what of this. I would say it would be long Rudd then you would be long TLS as well. Long Libs short tls??:confused:

[lemontree]

So it has to be asked whats the story if the libs win the election?? they have already said they will stop the NBN. Then what of this. I would say it would be long Rudd then you would be long TLS as well. Long Libs short tls??:confused:

It'd be quite a conflict in interest for those who hold shares in the big cap miners and telstra haha.

[ROE]

So it has to be asked whats the story if the libs win the election?? they have already said they will stop the NBN. Then what of this. I would say it would be long Rudd then you would be long TLS as well. Long Libs short tls??:confused:

Liberal wins and they throw out NBN ...TLS goes back to the old way and use its monopoly power to milk more money and every now and then ACCC write them angry letter and said stop it :D

[Trembling Hand]

It'd be quite a conflict in interest for those who hold shares in the big cap miners and telstra haha.

Yes I have no doubt at all that this is why we have this announcement. Rudd and his merry fools desperately need something to go their way. What better way to scour a win for the next 2 weeks than spending 11 billion of tax payers money to sure up your image :(:mad:

I'm sure TLS have got a better deal out of this because of the heat Krudd is taking due to the Super stupid mining tax.

[sptrawler]

If the Libs win one would think they will still roll out the N.B.N to business, government and new developments (which makes sense). They may decide to be selective about replacing existing residential, unless there is serious demand. Which is the way it should have been done anyway.
Rudd just has to get a WIN at the moment and he was a hiding to nothing with the CHAIRMAN KEV and hit man Conroy approach. The way the mining tax was floated and the Telstra shafting was being percieved, it was starting to add up to pure arrogance. Aussies hate nothing more than arrogant $#!!!ts telling them this is how it is so suck it up. OH and by the way it is your jobs and your money, I forgot.:banghead:

[Boggo]

Well Boggo it might have been your lucky day when you were stopped out by 1 cent, time will tell, my guess is they will fly on Monday. :D

Actually no, I would have been stopped out on the 2/06 at $3.02 on its way back up for $947 gross if I hadn't been stopped by that 1 cent.

You get that eh !

[sptrawler]

Actually no, I haven't a clue, i am obviously just another dumb punter trying to find intrinsic value. Don't have a clue how to read the trends, to me they are just showing what has happened they don't show what is going to happen. Trends don't take into account anything other than history, to be ahead of the game takes information and intuition.

[BrightGreenGlow]

Excellent news friends, well for people who hold TLS shares and most importantly the ones who bought a heap under the $3 bracket. :) ;) Oh yeah oh yeah. Take thats TLS doubters. ;)

[TheAbyss]

And how many years will that take to realise?

In the interim, by buying the infrastructure arm from Telstra (Valued between 10 and 20 billion dollars by analysts) The govt will allow the successful NBN bidder access to all of the copper infrastructure comprising of the copper itself, ducts, conduits and pipes.

This will allow the bidder to use the ducts and conduits etc to run the fibre which is the end goal.

However in the shorter term they can also offer a copper based solution which will allow them to fulfill the govt mandate of delivering data to every household with the added benefit of generating revenue which they could use to fund the roll out the fibre on an interim basis.






If Telstra get $8-10 billion for the infrastructure plus costs for restructuring their It systems etc (estimated at approximately 2.5 billion) then it could be good for everyone all round.

No winners if a separate infrastructure is used so whatever happens it must use the existing trenches etc or the project will never get off the ground. Aerial is not an option and the economics say a separate trench to what is there is not viable.

Great to have some constructive comments on where readers feel this will end up.


Great post.

One way to ensure Telstra stays interested (which is a must for this to get some traction) is when (if) the infrastructure is hived out for the NBN, Telstra take a mix of cash and Equity. That way Telstra will have some strong reasons to migrate their base over to the NBN. Cash short term and increasing revenues long term is a popular theme with share holders.

Well market likes the $11 billion offer which is pretty close to expectations so good that there is something on the table now.

Long way to go yet though.

Watch for the future fund selling hard into this rally imo.

[Stabilo]

So do you think TLS would be a good buy at this stage? (ie, in your opinion, would it head North? or South?)

[skc]

So do you think TLS would be a good buy at this stage? (ie, in your opinion, would it head North? or South?)

I moved recently and just called Telstra to sign up for new phone connection.

I wanted to get naked DSL so just wanted a cheap phone plan and ditch it later.

They have a homeline budget for $20.95 per month, but the consultant told me that you are not allowed to connect ADSL with another supplier with that service. So I had to go with the next plan at $27.95.

Then you can't disconnect for 3 months or it will cost $100. And that creates a huge problem - I can't live with no internet for 3 months, so I will have to sign up for an internet plan that's not naked, yet many ISPs have contracts of 6-18 months and charges an initial setup fee depending on the contract duration. Also if I sign up for a normal plan, I will need to retain the land line for a long time as well...

Then she asked me if I wanted to be listed in the White Pages. I said No. And she said that will cost an extra $3 per month to be NOT listed.

Telstra sure is doing all sorts of tricks to hold on to customers and the traditional phone service income...

[Boggo]

Last month we moved from the Adelaide hills to a place we recently bought near the beach (sea change).
Went through the usual stuff with organising phone disconnect and reconnect at new location etc.
About a week prior to the move I got a call from Telstra confirming the move etc, I asked about the number and was told I could keep the number that was at the property now.
Two days before the move I got a text asking if someone would be at the property on the Thursday as they needed to connect and check the line. I rang them and eventually got hold of someone who told me the line would be connected on Thursday as requested (the day prior to move) and did I want to know the new number. When I told him I already had it we compared numbers and he had a different number, I couldn't keep the one at the property because it was a silent number (even though they gave it to me a week before).
In the meantime I had organised my internet to be connected to the number I was originally given so I had to ring them and tell them of the new number.

I couldn't meet the Telstra guy on Thursday so I organised it for Friday, he turned up just as I did, did his check of the phone connections and left.
Ten minutes later he came back and asked how many connections I wanted as there was already a phone line connected yesterday (Thur) and he had just connected another.
We compared the phone numbers and I told him that the one connected yesterday was the amended number and that was the one I wanted to keep.

He then got on his mobile to ring Gupta (his words) to disconnect and remove any details associated with the new Friday number, a few minutes later after he explained everything about three times he hung up, advised that it was all sorted and left.

About an hour later I tried to make a call, no dial tone, tried the other socket, dead too. On the mobile phone to Telstra and 20 minutes later I find out that they disconnected the line that they had connected on Thursday as well as the one connected today.

The following Tuesday we got the phone back on, meanwhile the ADSL had also been disconnected with the phone line so I had to get that reconnected too.

I cannot understand why anyone would not want to hold shares in a company that runs so efficiently, absolutely amazing. :rolleyes:

[glenn_r]

It makes you wonder how Optus makes a living....

I have their Fusion plans here at my business and at home, here at work for $99.00 per month I get phone rental, free calls to local, STD, any mobile and 20gig of DSL, not bad hey and at home for $129.00 per month phone rental, free calls to local, STD, any mobile and 30gig of ADSL.

With every customer now leaving their mobile phone number as a contact and 3 teenagers at home I'm getting value for money.

Why can't Telstra offer this as they own the copper wire I'm using?

[BrightGreenGlow]

I thought the reason TLS costs more was due to their excellent coverage for mobile devices. You pay for what you get. My iPhone plan with vodafone might be cheaper and my mate's plan with Optus is just as cheap but however don't travel too far west or in certain areas and there will be no coverage.

I believe TLS get a hard deal when it comes it the 3rd party operators.

I cashed in a whole heap of TLS shares today for a very nice profit. I also believe they will continue to grow in share price as the year goes on and as the final deal comes closer. :)

[ROE]

I cannot understand why anyone would not want to hold shares in a company that runs so efficiently, absolutely amazing. :rolleyes:

Not sure a few stuff up and a few disgruntle customers qualify as a matrix for buying and selling a business :D

No large organization is perfect, hell people hate banks guts and they still making decent profit ...

and dominos is cheap and nasty pizza and the youtube video about some guy wipe his ass with dominos pizza but they still racking in.

if investment decision are based on personal experience and internet sensation not sure if you can make much money out of it :D

PS: I hear Vodafone is an excellent company and provide good customer services but I wouldn't put a cent into that business.. I rather put alot more in Telstra..

also Nokia executives are nice and friendly and got great market shares
with their phone but I rather buy Ass holes Steve Jobs apple business and not even put 1 cent into Nokia :-)

[Boggo]

and dominos is cheap and nasty pizza and the youtube video about some guy wipe his ass with dominos pizza but they still racking in.

if investment decision are based on personal experience and internet sensation not sure if you can make much money out of it :D


There's nothing else to go on really is there other than personal experience etc.

You could always inject a dose of reality I suppose. Then again reality is just an illusion created by alcohol deficiency.

Some people use that charting (pictures with squiggly lines) type stuff but I would rather trust a Mexican than use any of that.

.

[sptrawler]

Well at last a decent outcome for telstra shareholders. From the news articles it would appear that Telstra will be compensated as subscribers are transfered to the N.B.N. Also one would think they will require Telstra to play a major part in rolling out the infrastructure as they are probably the only ones with the expertise and skilled labour pool to expedite the roll out. From the newspapers they say some of the money is for access to Telstras exchanges, which would indicate Telstra will still own them. It should be great for the shareholder because the government payments should enable Telstra to maintain the dividend as it migrates its dying landline customers over to the N.B.N(taxpayer). What a winner as the universal service agreement monkey is off Telstras back and the regulation forbidding Telstra from offering the same deals as the other carriers should now be lifted.
If you could get the same deal from Telstra as Optus, Vodaphone etc, but have much better coverage, I know who I would be using. Bring it on a level playing field, just look how the overseas banks went, can't wait to see what Optus has to say when they can't sic the ACCC onto Telstra.
UPWARD AND ONWARD, I SAY YEH.:D

[sptrawler]

Hi Boggo, I was writing the post so never noticed your chart.
As I stated before charts show historic trends and don,t have the ability to factor in changes, they only show in the future what effect those changes had, be it good or bad. The reason I thought Telstra were a reasonable punt was because when they were floated in the 90,s at $3 the opposition government at the time stated they were a give away price to help the fat cats make money.
Subsequently the next tranche was floated at $7.40 since then Telstra has installed a wireless network far in excess of the competitors. Because the opposition tele providers promise to install infrastructure but don't bother because it's easier to cherry pick high density areas. If the restrictive legislation is lifted Telstra will cream Optus because Optus have sat on their **** and cherry picked for years.:D

[Boggo]

Hi Boggo, I was writing the post so never noticed your chart.


I was a holder of TLS in the early days, it had (and still should have) enormous potential but through idiots and mexicans they ruined it.
I have probably made more by shorting it than what I made on its way up, it shouldn't be like that.
Telstra are not doing themselves any favours with the level of bungling of what should be simple routine daily tasks that constitute most of the gripes on here.

They need to have a big clean out from the top down and they need to approach their business in a competitive manner.
Some of the staff they have in their newly branded stores need to spend six months in McDonalds to learn some of the most basic of skills, how they actually get employed to be the public face of a company is beyond me.

One day I hope to be able to have TLS in my SMSF and and also feel confident that I don't have to set aside half a day to sort out minor problems.

The one area I do have an issue with is why anyone would have hung on to their shares while they dropped over 60% in ten years and then get excited when they turn up by 5%, maybe its just me.

Lets hope that this NBN etc is a new start for them.

Rant over ;)

[sptrawler]

Hi Boggo, I agree with you completely, I had them in the early days and luckily I had some T1's that offset my losses on T2. It just shows what a stuff up Governments do when they get involved in the market. Just have a look at the R&I i.e Bankwest fiasco with bank of Scotland. I just think that now the government is getting out or should that be getting in and taking the monkey, or is that the ACC, off telstras back they may be able to compete on a level playing field. If they give a return of capital or a big dividend it is well worth being in at $3 especially in the SMSF.

[nulla nulla]

Interesting column in todays Sydney Morning Herald Business Day. They suggest that the tls price is unlikely to go above $3.47 as that was the price the future fund dumped their large parcel previously.
Even though the brokers value it arround $4, now that it's involvement with NBN has been given some positive direction, it is considered unlikely for the institutions to buy in while the overhang of the future funds holding persists.

[Tatts]

I moved recently and just called Telstra to sign up for new phone connection.

I wanted to get naked DSL so just wanted a cheap phone plan and ditch it later.

They have a homeline budget for $20.95 per month, but the consultant told me that you are not allowed to connect ADSL with another supplier with that service. So I had to go with the next plan at $27.95.


Not sure if that is a new policy they brought out but i have the budget homeline connection set up with ADSL from another supplier. It was connected about March last year.
If you are getting naked DSL why don't you just use VOIP instead of paying that much for a phone line?

[skc]

Not sure if that is a new policy they brought out but i have the budget homeline connection set up with ADSL from another supplier. It was connected about March last year.
If you are getting naked DSL why don't you just use VOIP instead of paying that much for a phone line?

It's a catch 22 - you actually need a phone line first before they can get you naked...

With the NBN essentially paying TLS to shut down the copper wire, TLS become essentially a retail operation - will they be a better performing company compared to an integrated monopoly?? hmm...

[malachii]

Not sure a few stuff up and a few disgruntle customers qualify as a matrix for buying and selling a business :D

I agree - except for the fact that is not a few. I have yet to meet a satisfied customer of TLS. A mate of mine works for TLS and when I asked about hooking up our phone (we have just moved) he recommended several companies - none of which were TLS!! When I queried him he said that he would never recommend them. Even though he gets a staff discount off his phone bill if he is with TLS he has his phone with another company.

I thought I would give them another chance and went into the local TLS shop to enquire about home and mobile phones. The sales girl told me that I would be better off with Optus as TLS was too expensive!!!!

With that kind of service and reputation - what hope do they have?

malachii

[Boggo]

Add to that the fact that they cannot do an announcement properly, quite a few would have been buying on Monday from the people who got on last week.

http://media.theage.com.au/national/selections/tesltra-insider-trading-suspicion-1628170.html

[Dunger]

Is Telstra the beast that it is because it's a "private" organisation owned by the government with the appropriate legislation to secure it in the market?

Would Telstra behave more efficiently if they were a totally private business competing against other telcos with no legislation to make it a monopoly?

I deal with HP regularly and they are much bigger than TLS but they don't have monumental stuff ups like TLS.

[sptrawler]

Well Dunger, the whole stuff up was the Government, as usual. They wanted maximum money from the float, so they sold it to the mums and dads as a verticaly intergrated company( and lets be honest the mums and dads i.e taxpayers payed for building it originally). That way the mums and dads thought they were going to get a good return.
Then came the problem, all the overseas multinationals eg Optus, Hutchinson, Vodaphone, said we can't compete and since then it has been downhill for Telstra. After getting maximum dollars for it the Government have then constantly legislated to cripple it, Telstra can't offer the same price as the competitors, they must sell access to the network cheaper than they sell it( so the multinationals can make a margin). They have to supply a service to outback areas where the service runs at a huge loss, funny the multinationals don't want to service these low margin areas.
Telstra shareholders have had to carry the social conscience of the Government. Really the only fair thing to do would have been to have nationalised Telstra and payed out the shareholders at the same price the Government recieved for it( but that money has been spent).

[ROE]

Well Dunger, the whole stuff up was the Government, as usual. They wanted maximum money from the float, so they sold it to the mums and dads as a verticaly intergrated company( and lets be honest the mums and dads i.e taxpayers payed for building it originally). That way the mums and dads thought they were going to get a good return.
Then came the problem, all the overseas multinationals eg Optus, Hutchinson, Vodaphone, said we can't compete and since then it has been downhill for Telstra. After getting maximum dollars for it the Government have then constantly legislated to cripple it, Telstra can't offer the same price as the competitors, they must sell access to the network cheaper than they sell it( so the multinationals can make a margin). They have to supply a service to outback areas where the service runs at a huge loss, funny the multinationals don't want to service these low margin areas.
Telstra shareholders have had to carry the social conscience of the Government. Really the only fair thing to do would have been to have nationalised Telstra and payed out the shareholders at the same price the Government recieved for it( but that money has been spent).

Don't blame anyone, when you make an investment decision you have to factor in some risks....whether it's regulation, **** management, or change in landscape of the business or change of government..

No one put a gun to anyone head and say buy Telstra...

mum and dad or whoever they are smart enough to make that call when you put the money on the line to buy something....if they cant then it's their problem and they need to understand the risk before they buy into a business.

when you drive on the road people assume you know the rules, if you don't
you get into accident, same with investing in the sharemarket...if you play ignorant and don't know the rules you can get burned and who to blame but yourself..

[ROE]

Is Telstra the beast that it is because it's a "private" organisation owned by the government with the appropriate legislation to secure it in the market?

Would Telstra behave more efficiently if they were a totally private business competing against other telcos with no legislation to make it a monopoly?

I deal with HP regularly and they are much bigger than TLS but they don't have monumental stuff ups like TLS.

you don't get regulate because you are big, you get regulated because you are in the business that has regulation surrounding it..

Regulations usually exist in business that provide vital services and infrastructure to the people...Electricity, Gas pipe line etc..

HP can stop selling computers and printers and it wont effect people life
but if Telstra decided that they turn off the phone services in regional area
then farmers and people in those area will be up in arm :-)

or someone decided to turn off the Gas pipe line or rack up price 100%
you don't have much choice but pay up...

HP can rack up their computer and printers by 100% and people don't care
as they just ignore them and buy from someone cheaper...

[sptrawler]

Hey ROE I am not blaming anyone for an investment decision, what I was saying was the`same people that sold it(the Government) then systematically destroyed its value. They should have done that before they sold it.

[sptrawler]

Actually what is really ironic is the Government is going to replace tax payer infrastructure it sold to the tax payers. With tax payer infrastructure it is going to put in and then in 5 - 10 years sell it to the taxpayer. I WON"T BE CAUGHT NEXT TIME.:eek: I must remember.:banghead:

[ROE]

I agree - except for the fact that is not a few. I have yet to meet a satisfied customer of TLS. A mate of mine works for TLS and when I asked about hooking up our phone (we have just moved) he recommended several companies - none of which were TLS!! When I queried him he said that he would never recommend them. Even though he gets a staff discount off his phone bill if he is with TLS he has his phone with another company.

I thought I would give them another chance and went into the local TLS shop to enquire about home and mobile phones. The sales girl told me that I would be better off with Optus as TLS was too expensive!!!!

With that kind of service and reputation - what hope do they have?

malachii

You may be on to something there but I usually looks at financial books to determine if customers abandon the company or they don't make enough in certain area......This will tell me whether the customers shout loudly but they couldn't be bother switch carrier because they know they get the same treatment in Optus and Vodafone.....

very much like the banks :D lot of shouting and bitching about banks not many people do anything about it....

Right now the book tell me they are losing fix line but this is a problem
they have to address at some stage this is a problem management has to tackle head on.....

if they decline in fix line and other division then it worry me
but decline in old ancient asset only to be replaced by growth in Wireless, Data and Foxtel then it's a good thing for Telstra...

TLS do have their fair share of problems but what they lose in one area they make money in other area and their return on asset is the best
of its class..

at a certain price TLS become compelling value despite all their problems.

TLS has many unique assets other Telco in the world would dream of having
all it need is decent management to get a high return for these assets
by changing the way they offer their services (bundle is the key here) and I think Thodey already started this journey not too long ago...

[AngusSmart]

This was sent to my email, and i am not a member of fat..

http://www.fatprophets.com.au/Member%20Area/Product%20Landing/Report%20List/Report%20Page/Article%20Page.aspx?id={D3F08BBF-3724-4BFB-A309-B62450C9701E}&product=Australasian%20Equities&pt=paid

[sptrawler]

I tend to think the issue with Telstra now that they have a general agreement with the NBN. Is how they offer competing plans with the other telcos and don't bring the wroth of the ACCC down on them. The Government has to give Telstra a fair go which should allow them to protect their consumer base while giving away their fixed line consumers to the NBN. That would indicate the Government would have to lift the restrictive legislation that stops Telstra from offering competitive plans similar to the other carriers. If this happens (as it should) Telstra would stop bleeding customers and start to build up its customer base again.

[boofhead]

Does the legislation cover NBN? I don't think Telstra paying for access to NBN will be an excuse for anything except lower profits. Optus is large and often not competitive with other telcos. Telstra also has interests in international fibre.

[BrightGreenGlow]

So guys when will the deal with the NBN become iron clad? I could imagine a price around $3.60 on that day? Since this should happen soon especially with the election coming very soon is TLS a strong buy? I have $20k waiting to put into something soonish and I feel TLS would be a good bet. Thoughts?

[drsmith]

When ??

More like if. The current ALP government has to be re-elected first.

Everybody likes to imagine higher prices for their investments.

[BrightGreenGlow]

If the Libs get in there will be no NBN or a forced separation by the ALP so its win.win isn't it????

[drsmith]

If it is a win win for Telstra regardless of who is in power, then why would that not be factored into the current share price ?

[ROE]

So guys when will the deal with the NBN become iron clad? I could imagine a price around $3.60 on that day? Since this should happen soon especially with the election coming very soon is TLS a strong buy? I have $20k waiting to put into something soonish and I feel TLS would be a good bet. Thoughts?

Factor in some cut for yield say 24 cents I think the yield can be maintained at current level or 24 cents for a while yet

I would buy at price closer to $3 to factor in margin of safety to have high yield with some risk to capital decline but not hell of a lot at price closer to 3

I put more than your amount at 2.92 some times ago when all the negatives news going against telstra. I soon figure out at that price and yield it is as good as it get for any stock :D

Still holding for yield

[BrightGreenGlow]

If it is a win win for Telstra regardless of who is in power, then why would that not be factored into the current share price ?

Maybe everyone is taking into account when the FF will offload another lot of shares?

I'm very tempted to buy a few thousand more TLS soon. Hoping the SP will drop a few more cents though. When does TLS report their next profit?

[snowking]

Maybe everyone is taking into account when the FF will offload another lot of shares?

I'm very tempted to buy a few thousand more TLS soon. Hoping the SP will drop a few more cents though. When does TLS report their next profit?

TLS reports on the 12th of August, only a couple of weeks away now.

Business Spectator has a full list of company reporting dates, http://www.businessspectator.com.au/bs.nsf/Article/EARNINGS-CALENDAR-pd20100727-7RA52?OpenDocument

[BrightGreenGlow]

TLS reports on the 12th of August, only a couple of weeks away now.

Business Spectator has a full list of company reporting dates, http://www.businessspectator.com.au/bs.nsf/Article/EARNINGS-CALENDAR-pd20100727-7RA52?OpenDocument

Thank you :)
.

[sptrawler]

I tend to think the issue with Telstra now that they have a general agreement with the NBN. Is how they offer competing plans with the other telcos and don't bring the wroth of the ACCC down on them. The Government has to give Telstra a fair go which should allow them to protect their consumer base while giving away their fixed line consumers to the NBN. That would indicate the Government would have to lift the restrictive legislation that stops Telstra from offering competitive plans similar to the other carriers. If this happens (as it should) Telstra would stop bleeding customers and start to build up its customer base again..

The terrain seems to have changed and what I mentioned above seems to be coming to fruition. http://www.smh.com.au/business/mobile-price-war-looms-for-telcos-20100729-10wvq.html .
Well if you take the latest ACCC fine into account $18M (not enough, says the competition) there seems to be a bit of panic coming into the competitors. Well I for one, think they know they are like the people crying wolf for the last 10 years. Now they have the real wolf on their doorstep and they are $#!T!#&. A level playing field, AT LAST A FAIR GO FOR TELSTRA SHAREHOLDERS. :D

[sptrawler]

I forgot to mention, Congratulations ROE, picking them at $2.92 was a winner.
Even if Liberal win the election my guess is they will continue on with the NBN. Business and government require a secure network, wireless doesn't provide it and Telstra was being shafted to have to provide it(with the copper network)at the shareholders expense.
With the NBN the Government will be supplying the secure infrastructure that is required(as it should be) not the Telstra shareholder.
Telstra will be leasing out it's exchanges and infrastructure to the government to provide the secure service. Telstra will then be able to compete with the other users eg Optus, to supply retail services at competitive prices with a much better and far reaching wireless network.
I can only see upside for Telstra with the burden of the Universal Service Obligation being lifted and the dying copper network being taken over by the Government, leaving Telstra with the best wireless network and leasing it's infrastructure for ongoing income. $h!t it has been a long time coming but maybe the outcome will have been a torturous but excellent result.:eek:

[sptrawler]

boofhead, I don't have any references but I am making an assumption that there will be some kind of cost associated with a multiplexing device required at the home and also some form of labor and materials cost to pull out the copper and pull in the fibre. Also one would assume for a $43 billion outlay there would be some form return on capital required, maybe the taxpayer will wear it. But from information available on the net, places that have the superfast broadband have not seen a corresponding superfast take up of the services. At the end of the day it will depend on the cost, most people just browse and that speed is governed by the site you are viewing.

Well boofhead, the quote in April is proving correct. The take up in Tassie has just been reported on the news as low(hot off the 5 PM news WA time). I think this will put more pressure on the Government, whichever party, to continue on with the NBN because it is the responsibility of the Government not the Telstra shareholders to supply the secure network.:D

[sptrawler]

If it is a win win for Telstra regardless of who is in power, then why would that not be factored into the current share price ?

I hate to keep hijacking the thread but I just love seeing Aussie companies standing up to the multinationals.
Dr Smith i accept your comments with high respect. but how would the fund managers make money if all shares were fair value, eg why is WBC at such a discount to CBA if is a reflection of fair value. Chart them both against each other and taking into consideration their take overs and their shares on issue to earnings potential. One would have to think WBC is a bargain.
Again these are personal beliefs and I did sell CBA to buy WBC

[drsmith]

There's not much scope for variation in the assessment of fair value if it's only based on who is in government and it's a win win either way.

[Garpal Gumnut]

If the ALP get re-elected they will go gang busters.

They will probably trade sideways or fall a bit if the Libs get over the line.

The Rollout is in their favour.

I must have a close look at their chart on the weekend.

gg

[Boggo]

I may be wrong but I suspect that the end result of people like me trying to call the Telstra Tshop in the Marion shopping centre from Brighton (just over 1 km away) and getting put through to a call centre in the Philippines to be re-directed may have an impact on the financial results just published.

Then again I could be wrong :rolleyes:

[ROE]

I forgot to mention, Congratulations ROE, picking them at $2.92 was a winner.
Even if Liberal win the election my guess is they will continue on with the NBN. Business and government require a secure network, wireless doesn't provide it and Telstra was being shafted to have to provide it(with the copper network)at the shareholders expense.
With the NBN the Government will be supplying the secure infrastructure that is required(as it should be) not the Telstra shareholder.
Telstra will be leasing out it's exchanges and infrastructure to the government to provide the secure service. Telstra will then be able to compete with the other users eg Optus, to supply retail services at competitive prices with a much better and far reaching wireless network.
I can only see upside for Telstra with the burden of the Universal Service Obligation being lifted and the dying copper network being taken over by the Government, leaving Telstra with the best wireless network and leasing it's infrastructure for ongoing income. $h!t it has been a long time coming but maybe the outcome will have been a torturous but excellent result.:eek:

Nothing to be congratulated just trying to get a decent return for my money over the cycle of my working life before I retire

on that note I bought another 6500 shares today at $2.95 :D

[jonnycage]

dipped in at 2.85, pretty happy with that. hope for a quick return but as
they say stranger things have happend lol

j c

[Huitzii]

dipped in at 2.85, pretty happy with that. hope for a quick return but as
they say stranger things have happend lol

j c

I was having a close look at TLS last night and thought the same thing but there are much better opportunities out there atm so ive passed for now
DYOR

[trainspotter]

Hands up who shorted them on the way down? If the revenue is dropping form their land lines what is it being replaced with? More mobile phones? Or do people just don't have a phone hanging on the wall anymore? :confused:

[BrightGreenGlow]

Whats the latest with TLS guys? I see they are back below the $3 mark again due to the reporting season. Surely they are worth more than $3? How will the election affect them?

[Boggo]

Whats the latest with TLS guys? I see they are back below the $3 mark again...

Probably another analyst or broker recommendation, always a good time to exit or short.

Interesting read
http://www.smh.com.au/business/telstras-dividend-under-siege-20100816-1266j.html
.

[pixel]

Whats the latest with TLS guys? I see they are back below the $3 mark again due to the reporting season. Surely they are worth more than $3? How will the election affect them?

It's probably less a case of the election, but Monday's going ex-dividend. The last couple of days may have been influenced by dividend strippers. In the end, I sold, netting an immediate profit, rather than having to wait for the 14c to be paid in September and Franking Credits a year later - if I'd get them.

Regardless of the election outcome, I find it quite conceivable that Telstra may drop below $2.80 next week. And if they lose control of "their" copper network, and are coerced to add and support bandwidth in the bush, profitability will be further reduced. Our pollies fly the economy by the seat of their pants - and with short-sighted targets in 3-year election rhythms. That's never going to turn a utility like Telstra into a future-proof, profitable enterprise.

[malachii]

Whats the latest with TLS guys? I see they are back below the $3 mark again due to the reporting season. Surely they are worth more than $3? How will the election affect them?

I struggle to see how TLS can be valued above $3. It is a declining political football that is kicked from pillar to post. Nothing gets votes and ratings like bagging TLS. No matter when you bought this company, if you still hold it you have made a loss. We can argue about the great dividends (which they have to borrow money to pay for????!!!! How can this be a great long term strategy for shareholders?) but at the end of the day it has been on a downward slope for years and shows no sign of slowing. Every time they come out with a report it shows how they are losing more customers and money. We can blame changes in technology, political parties, managment, customer service...... the list goes on and on but at the end of the day - as an investment this company is one of the worst.

My opinion only - do your own research. Even better - try to find someone that has had a good experience with this company in ANY form - customer, employee, shareholder, regulator. I'm sure there is one out there - I just haven't met them yet.

malachii

PS - I do not own shares in this company so maybe my opinion is biased.

[jancha]

I struggle to see how TLS can be valued above $3. It is a declining political football that is kicked from pillar to post. Nothing gets votes and ratings like bagging TLS. No matter when you bought this company, if you still hold it you have made a loss. We can argue about the great dividends (which they have to borrow money to pay for????!!!! How can this be a great long term strategy for shareholders?) but at the end of the day it has been on a downward slope for years and shows no sign of slowing. Every time they come out with a report it shows how they are losing more customers and money. We can blame changes in technology, political parties, managment, customer service...... the list goes on and on but at the end of the day - as an investment this company is one of the worst.

My opinion only - do your own research. Even better - try to find someone that has had a good experience with this company in ANY form - customer, employee, shareholder, regulator. I'm sure there is one out there - I just haven't met them yet.

malachii

PS - I do not own shares in this company so maybe my opinion is biased.

You may struggle to see tls fair value above $3 so at what price would you put on them?
Huntleys have them at a buy with a fair value @ $3.60.
True that Telstra over the years has declined in value and long term holders would be very dissappointed but at some point as in most shares there's a bottom.
How much lower can it go before there's a correction?
It's not as if Tls earnings are going to disappear in a hurry, they are a low risked share and are leaders in the field. They just have to get their act together & win back customers. I would have thought that they're in the drivers seat to do this.
Imo they are a good buy. If there's a hiccup in the world market, a double dip it would be one of the least of companies to be effected by it as shown in the past.
I personally think it's a buying opportunity especially next week when they'll more than likely fall after the ex div date.

[Julia]

I read an article last week suggesting that the dividend on TLS is vulnerable, giving how much difficulty they are in.
Sorry, I can't now recall where it was.

[Boggo]

I read an article last week suggesting that the dividend on TLS is vulnerable, giving how much difficulty they are in.
Sorry, I can't now recall where it was.

There is info about it in the link in my post 745 above Julia, probably similiar summary.