TLS - Telstra Corporation

[So_Cynical]

5G is a whole new service to sell and new network to build, Telstra has the infrastructure, the towers and exchanges and fibre backbone and the customer base, 5G can also be a fixed service - with 5G all the telcos are starting from scratch, its a brave new world.

 

[galumay]

5G is a whole new service to sell and new network to build

Not really, at the end of the day mobile wifi broadband has a limited market, the backhaul on Telstras mobile network cant handle a significant increase in data, 5G is more marketing spin than real world difference for consumers of mobile broadband. 4G is fast enough to comfortably stream 4K video, and almost no mobile users are downloading large files to their devices.

If there was much of a takeup as a substitute for NBN for instance, the network would collapse and to build a separate network that could support that would be too expensive. Also wireless has other limitations that will mean its always inferior to fixed fibre.

I think the customer base is nearly gone, even in the very remote areas where Telstra is the only option as a mobile carrier their name is poison. People are fast moving over to providers like Boost who resell Telstra network. So telstra are moving from retail margins to only wholesale margins.

I really cant see 5G being a panacea for Telstra's problems. The biggest issue remains their disdain for customers, appalling customer support, silos within the support system, CSRs who are completely ignorant of the systems, processes and technology that Telstra uses, and a pricing structure in many parts that is eye watering price gouging.

Admittedly I work with the outcomes of their incompetence every day in my business, so I am probably more negative than most, but the horror stories are relentless. The real indicator for me that they have learnt nothing is the way they treat business customers - that was the last place where they really had a bit of customer stickiness due to switching costs.

 

[nulla nulla]

......This is one of the once in 20 year things, the whole telco sector has fallen like 55% or so, its a cyclical low. The S&P/ASX 200 Telecommunication Services Index - XTJ has fallen 55% top to bottom, back to near post GFC lows = its time to go deep and go long.
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The industry in general? It's pretty hot still.
I'm thinking this was a low. Not expecting sky rockets but people will want the div for a little while longer you'd think.

124 million share were soaked up yesterday around the $2.76 mark. If Telstra maintains their dividend at or near $0.22 this will represent a return of around 10% (including franking) for the buyers. Their investment in 5G and mobile network will position them well for competing with NBN when the no compete handcuffs come off. Problem is you are trying to predict the future in an ever changing technological environment. 2022 is a long way down the track, a lot can change in 4 years.

 

[HelloU]

You could be right, Ive thought along that line, but it is risky. IMO
TLS still own the infrastructure and from my understanding, NBN lease it.
So maybe the wholesale section is worth something, that is unless the NBN are buying the backbone, rather than leasing it.
How you value it, is beyond me.

from the govt document......
"Telstra owns the copper-wire network that connects most of Australia’s homes. This is changing. As the National Broadband Network (NBN) is built across Australia, NBN Co Ltd will take over the lines in most areas. Telstra will still be able to use the lines, but it will be on the same basis as any other business that resells phone and internet services to people".

link https://www.communications.gov.au/w...ition-broadband/telstras-separation-framework

 

[Country Lad]

If Telstra maintains their dividend at or near $0.22 this will represent a return of around 10% (including franking) for the buyers. ....................................Problem is you are trying to predict the future in an ever changing technological environment. 2022 is a long way down the track, a lot can change in 4 years.

My view is the announcement when this year's $0.22 dividend is declared will include a reduction of dividend in the next years. The dividend comprises around an 80% of earnings plus the special from the NBN payments. 22 cents would be unsustainable as the earnings decrease (already a downgrade in the latest release). The saving grace for TLS is the 5G opportunity for which TLS is far better placed than the competition, but that is not a given yet and a few years off.

 

[sptrawler]

from the govt document......
"Telstra owns the copper-wire network that connects most of Australia’s homes. This is changing. As the National Broadband Network (NBN) is built across Australia, NBN Co Ltd will take over the lines in most areas. Telstra will still be able to use the lines, but it will be on the same basis as any other business that resells phone and internet services to people".

link https://www.communications.gov.au/w...ition-broadband/telstras-separation-framework

I'm not 100% sure on it, but I think Telstra still owns the exchanges, the interconnecting fibre cable, ducts and pits, and the overseas interconnecting fibre cable. The NBN, I think rents them off Telstra and it is this backbone, Telstra is talking about seperating, from retail.
The initial payments from the NBN are for access, then payments for poaching customers.
After the NBN is finished, I think they still pay Telstra a rent on the backbone of the system.
Well that's my understanding, someone will correct me, if I'm wrong.
As Country Lad says, I don't know how they will maintain the dividend at its current level, the last .22c was made up of a top up special payment.

 

[Smurf1976]

If there was much of a takeup as a substitute for NBN for instance, the network would collapse and to build a separate network that could support that would be too expensive. Also wireless has other limitations that will mean its always inferior to fixed fibre.

Agreed in a technical sense but I'm hearing of rather a lot of people ditching fixed comms altogether once the NBN comes through and going from ADSL to 4G.

If you aren't streaming much video then it's the rational thing to do given that NBN plans are all really only targeted at high volume users. If you're not streaming a lot of video then using your mobile phone's data is a sure fire winner on cost over being connected to the NBN and likely less hassle too (since that way you've only got to deal with Telstra etc for one thing not two).

 

[galumay]

Agreed in a technical sense but I'm hearing of rather a lot of people ditching fixed comms altogether once the NBN comes through and going from ADSL to 4G.

I dont see that in the real world, running a business that does the NBN installs, the takeup is nearly 100%, Netflix and Playstation are the 2 drivers I hear about over and over again. The teenage kids are all on Playstation and mum & dad are watching Netflix. Mobile broadband wont cut it for that, especially if more people start trying to do it. The backhaul is completely inadequate.

Even if you are right it isnt going to help Telstra much, nearly everywhere in Australia you get a better mobile deal with one of the other service providers. People have already voted with their feet with their mobiles.

 

[Klogg]

The backhaul is completely inadequate.

This.

The way things are playing out, NBN will provide infrastructure for home internet, mobile will head more and more to TPG (lowest cost operator) and business internet between a number of fibre providers.

Telstra really need to cut costs and become competitive, because their copper monopoly is dying away quickly. The NBN won't be a flop forever

 

[galumay]

I have been thinking about it some more today and I think the single biggest problem for TLS remains its corporate cultural attitude to customers. As I said earlier, with ADSL the unwinding of the monopoly removed the only competitive advatage they had. There was a residual of customer stickiness, especially in business, but the abject failure for 30 years to make any attempt to change the corporate culture towards customers has wrecked the business and leaves it with absolutely no meaningful competitive advantage. They are now price takers on a slow race to the bottom

Oddly the only thing that has delayed the inevitible has been the consistently poor management across the sector. I still remember David Teoh's clarifying his attitude to customers, cant be posted here as its a family friendly site! Floptus, Vocus....

 

[HelloU]

what happens in 3 years time if Huawei was the only expression of interest in the NBN?

 

[sptrawler]

I dont see that in the real world, running a business that does the NBN installs, the takeup is nearly 100%, Netflix and Playstation are the 2 drivers I hear about over and over again. The teenage kids are all on Playstation and mum & dad are watching Netflix. Mobile broadband wont cut it for that, especially if more people start trying to do it. The backhaul is completely inadequate.

Even if you are right it isnt going to help Telstra much, nearly everywhere in Australia you get a better mobile deal with one of the other service providers. People have already voted with their feet with their mobiles.

If 5G has the bandwidth capability they are saying it has, it may be the case that a lot of homes may decide to go full wireless.
From what I've read there is a suggestion that 5G transmitters could be installed in the node, then the house can be connected without the requirement for either copper or fibre.
If this proves correct, it would give a seamless connection from your mobile to domestic applications.
This then wouldn't require, all the different providers each person uses, and could really streamline packages and flatten data costs.
At the moment, I use Iprimus for home internet/phone, Woolies mobile and Telstra mobile pre paid broadband.
If the phone, the house and the mobile broadband was all 5G, the provider may say the cost of all the data, calls etc are in the bundle and a uniform price.
If this happens, then Telstra has a bit of a coverage, tech advantage, but it wouldn't encourage me to buy back in at this point.
5G if it comes up to expectations, is a real game changer, due to its bandwidth from memory 600Mhz to 6Ghz.
Which will equate to a huge data handling capability, and may lead to even higher data speed, which they are know talking about on 6G.
This is the problem with technology, it moves so bloody fast.

Here is a bit of technical blurb on 5G:
The flexibility in Frequency for 5G goes from 3 to 300 GHz, and it can also switch between multiplexing and access technologies CDMA and BDMA. The standards it’s compatible with include IP broadband LAN/W AN/PAN & WWWW, and its ultra high speed, with gigabit data rates, high quality coverage and multi spectrum use for near real-time performance.

In the Internet of things (IoT) or Machine to Machine (M2M) space, 5G will be able to support 100 times more connected devices, achieve deep indoor coverage and have improved signaling efficiency, all at a 90% reduction in network energy usage, which also makes it cheaper to operate.
End of Quote.

The problem for Telstra is, they are just another seller of the technology, with a better coverage, that doesn't help if all the extra coverage only gives you 10% more customers.

 

[HelloU]

(i do not get where the telstra pre-paid thing fits spt, but anyway)

5G will give a real choice for most between.....5G or NBN. 4G does everything for me right now. No home phone for many years. To each to their own.......

 

[galumay]

If 5G has the bandwidth capability they are saying it has, it may be the case that a lot of homes may decide to go full wireless.

Trust me, it doesnt and they wont. It will work fine for the odd household that just browses a bit and posts a few emails. It wont work for the sort of usage we are seeing across most households, long periods of HD video streaming, increasingly moving to 4K & in the future 5K.

5G is not the panacea for TLS's woes.

 

[sptrawler]

(i do not get where the telstra pre-paid thing fits spt, but anyway)
..

The Telstra pre paid dongle, works great, when on the road.

 

[sptrawler]

Trust me, it doesnt and they wont. It will work fine for the odd household that just browses a bit and posts a few emails. It wont work for the sort of usage we are seeing across most households, long periods of HD video streaming, increasingly moving to 4K & in the future 5K.

Well I'm no expert and I'm only going off what is on the internet, but it does sound like 5G is going to open up a lot of new boundaries, if it lives up to its hype.

5G is not the panacea for TLS's woes.

Yes, like I said, I won't be diving in on the back of 5G.

But I don't want to be completely negative, because as I've said I'm no expert, and don't want to make statements I've developed because of my own beliefs.
That isn't fair on the suffering shareholders, if I had some technical knowledge to give them hope and or desperation, I would.
But because I have no real in depth knowledge, of where the technology can lead, I just post what I have gleaned off the internet.
I'm not making a judgement on Telstra, just trying to add to the conversation.

 

[galumay]

I get the intent sptrawler, and I am probably more negative because its my field of specialty and what my business does.

The suffereing shareholders need to work it out for themselves, what they do should never be influenced by what you, I or any other random on the internet says!

 

[Smurf1976]

I dont see that in the real world, running a business that does the NBN installs, the takeup is nearly 100%, Netflix and Playstation are the 2 drivers I hear about over and over again.

It probably reflects demographics etc. Nobody I know owns a Playstation.....

$49 per month for all my comms on a mobile network (Telstra) that actually works. NBN and the others can't beat that for me so I don't use them.

NBN the problem is they only want higher volume users and that's it.

Optus and Vodafone the problem is their networks are built to "cherry pick" profitable areas and in too many places just don't work where Telstra does.

That said I do agree that Telstra have a very major problem with customer service. Tried to sign up with them for internet back in 1996 and they never did get it sorted. Went with a local company instead who ended up being bought out twice over and becoming part of iiNet. That was fine until TPG took over iiNet and promptly turned it into a cheap, low quality operation.

There's no way I'll say Telstra is good but thus far I haven't found anyone who is actually better.

 

[sptrawler]

We have to decide which way we go with the internet, the node has arrived at a street near us. lol

We have Iprimus, the daughter, who lives with us has Telstra.
To reduce overheads we will go with Telstra, at this point in time, I think they are probably better situated to provide a better outcome.

 

[HelloU]

.... It will work fine for the odd household that just browses a bit and posts a few emails. ..........

that is me......no movies, no pr0n, no games. I do understand I am out of the normal demographic. I do not have demanding bandwith, latency or volume requirements. I do love having all my comms with me all the time though, no matter where I am, for little cost. Again, to each their own.

I get the intent sptrawler, and I am probably more negative because its my field of specialty and what my business does.
The suffereing shareholders need to work it out for themselves, what they do should never be influenced by what you, I or any other random on the internet says!

DYOR as usual, plenty of time to bail already, and new holders are betting on the future. I am keen to hear any views on both telstra and very much the broader comms things (cos they will change future directions and do so pretty fast imo)....so galumay your comments are very very welcome as you are closer to network frustrations and technicals than most. (and thanks to the the rest of you)