TLS - Telstra Corporation

[Boggo]

@sptrawler TLS looking good so far.

 

[sptrawler]

@sptrawler TLS looking good so far.

It certainly looks as though you were right on the money Boggo, still in the range, well called.

 

[Boggo]

It's finally come back to life. My TLSIOO warrants were looking like heading towards decay for a while there.
Next question... is there another 40 cents in it ?

(Weekly at Wed 27th - click to expand)

 

[sptrawler]

It's finally come back to life. My TLSIOO warrants were looking like heading towards decay for a while there.
Next question... is there another 40 cents in it ?

(Weekly at Wed 27th - click to expand)
View attachment 98776

Well as usual Boggo, you have called it right, just back of holidays and TLS is bouncing.
Well done.
My guess some are moving from Banks to TLS, for dividend growth?
How has the volume been?

 

[Boggo]

...

My guess some are moving from Banks to TLS, for dividend growth?
How has the volume been?

Yes, it's slowly plodding in the right direction @sptrawler.
The more reliable patterns tend to move slowly, hopefully it will continue and if it does it could take til mid Feb to continue to the potential target area.

Nothing significant on the volume that I can see on the weekly anyway, tech/a may see some clues in there.

Cheers @sptrawler.

 

[sptrawler]

Yes, it's slowly plodding in the right direction @sptrawler.
The more reliable patterns tend to move slowly, hopefully it will continue and if it does it could take til mid Feb to continue to the potential target area.

Nothing significant on the volume that I can see on the weekly anyway, tech/a may see some clues in there.

Cheers @sptrawler.

The share price is still holding well Boggo, I suppose the next step one way or the other, will be when it gives a market update on earnings?
ATM though there is obviously a positive sentiment.

 

[Boggo]

...
ATM though there is obviously a positive sentiment.

@sptrawler agree. It's having a bit of an issue getting past the constant sellers around the $3.90 area and this will probably repeat around the $4 area.

I'm tending to think that a bit of positive news will kick it on but in the meantime sit back and watch

 

[sptrawler]

Obviously the call from the regulators, for large companies to expedite their payments to service providers has hit a chord.
https://www.smh.com.au/business/com...-of-decade-telstra-chief-20200206-p53ye2.html
From the article:
The fairness of the telco's payment arrangements for small business suppliers has been in the spotlight over the fortnight. Telstra recently dumped its controversial supply chain finance arrangement with US company Taulia,which allowed suppliers to be paid in a shorter payment window but for a fee.

Telstra has since also committed to 20 day payment terms for 85 per cent of its supplier base.

Mr Penn said Telstra was now working to stop its supply chain finance arrangements in a way that did not disadvantage suppliers who had been using it.
It certainly is about time, Government Departments and large Companies, paid their bills quickly. They sure are quick to jump on customers when they fall behind.
I remember in the 1980's being assaulted in a country town, because I was wearing a power company uniform and the disgruntled person had had his power cut off.
Yet the power company owed him money for services provided, but they didn't pay invoices for 90 days, after the punch up we had a beer. Christ it had nothing to do with me, I was installing a diesel gen set.

 

[sptrawler]

Telstra's results, it will be interesting to watch market reaction, we should be starting to get an idea of future earning potential IMO.
https://www.smh.com.au/business/com...3-p540c6.html?js-chunk-not-found-refresh=true
From the article:
Fixed revenue declined by 10.9 per cent to $2.38 million, hit by migration to the NBN and competition in market. Mobile revenue increased slightly by 0.3 per cent to $5.31 million. The company added 137,000 retail postpaid mobile services, including 91,000 from Belong.

Media revenue was hit by the performance of Foxtel from Telstra. Foxtel from Telstra declined by 5 per cent to $323 million and had 52,000 subscriber exits in the half. Telstra said it now has 1.625 million Telstra TV devices in market, while Sports Live Pass users increased by 602,000 to 3.194 million across AFL, NRL, netball and FFA.

The telco giant re-confirmed guidance with full year total income - excluding financial income - between $25.3 to $27.3 billion, and underlying EBITDA to be between $7.4 and $7.9 billion.

 

[Knobby22]

Interesting stat.
If you bought Telstra and CSL 5 years ago, the dividend for CSL would now be equal to Telstras.

 

[sptrawler]

Big volume being traded today, I wonder if the market is reacting to perceived handset supply problems, that Telstra could face if the coronavirus issue worsens?

 

[sptrawler]

Another interesting move by Telstra in these uncertain times, they are making a big commitment to carbon zero, very honourable gesture just a funny time to announce it. Maybe with the volatility, it may hide any market reaction, possibly a clever move?

https://www.theage.com.au/business/...us-plan-to-cut-emissions-20200304-p546u2.html

 

[UMike]

I'd rather they concentrate on costs, service and profitability.

 

[matty77]

Strong dividend player, more people working from home and Business "tends" to go TLS for safety reasons so I would expect some growth from TLS in this area.

The merger that was TPM might get TLS to get their act together a bit more OR could damage them?

 

[sptrawler]

Telstra to issue 500m Euro 10 year bonds, they seem to be building a bit of a war chest ATM, I wonder if it for impending problems or a buying spree.

 

[Dona Ferentes]

Telstra to issue 500m Euro 10 year bonds, they seem to be building a bit of a war chest ATM, I wonder if it for impending problems or a buying spree.

Probably just rolling debt. But a good idea to lock it in for a while. (as long as currency is hedged?)

Impending problems could be more likely to do with changing habits. I posted this in ST1

A view is, as we go longer in lockdown, that this has "driven business and entertainment online, but left telcos spending to service surging demand, and, with fixed pricing structures, no quick way to monetise the investment." "At the same time, roaming revenue has dried up as people travel less, and telcos are bracing for a slump in new contracts accompanying a wave of unemployment as businesses shut."

Although other reports, from Andy Penn, no less, are less pessimistic

"The fact that actually we can even contemplate large sectors of the economy and the population working and studying from home is in of itself a pretty impressive fact, given the technology and the capacity that’s had to be created and invested in to get us to that point.”
“We are seeing an increase in mobile traffic, we’re seeing a shift in the peak time of mobile traffic, which was typically around 5:00 pm, it’s now trending more towards 2:00 pm in the afternoon. We’re seeing, obviously, volumes on the network more generally increase.”- Andy Penn, CEO

 

[sptrawler]

The drop in roaming revenue is an interesting one, I wonder how much revenue that generates.
Good articles Donna

 

[Dona Ferentes]

TLS has picked up a bit over the last week or so.... $3.20 -> $3.50.

Probably in anticipation of an August report that is less bad, plus of course the bait of a dividend, no matter how scrawny.

Also, seems to have moved to raise postpaid mobile pricing across the board by $5 to $15 a month. (which is bold)

 

[Dona Ferentes]

from earlier this month:

Telstra ... entered an agreement to sell its data centre complex in Clayton, Victoria, to Centuria Industrial REIT for $416.7 million. The sale includes a triple-net lease-back arrangement which means Telstra will retain ownership of all IT & telecommunications equipment, as well as ongoing operations and responsibility for building upgrades and repairs, future capex requirements and security. The sale has no impact for Telstra customers.

The lease is for an initial period of 30 years with two 10-year options for Telstra to extend the lease. Telstra CEO Andrew Penn said the sale was another marker of progress on the company’s T22 strategy. “As part of T22, we have an ambition to monetise up to $2 billion worth of assets to strengthen our balance sheet. This deal means we have now reached over $1.5 billion. “Data centres are an incredibly important part of the digital ecosystem and we continue to own and operate world-leading facilities in Australia and overseas."

The 3.2 hectare complex is 25km from the Melbourne CBD, and incorporates 10 buildings, including Telstra's newest 6.1MW data centre and its adjacent 6.6MW data centre and associated energy centre. The transaction is expected to be completed by the end of August. The transaction will generate $416.7 million in proceeds. Due to the long tenure of the lease-back, the transaction will not be treated as a sale under accounting standards, therefore no accounting gain will arise.

 

[Dona Ferentes]

in these days of climate change, it would be unfair (to glaciers) to compare TLS to them.

But, within the organisation, what have we got... declining fixed line, expanding mobile, 5G (the great hope for IoT) and the NBN. Plus infrastructure. One analyst, with the eye for a deal, came out with this:

Infrastructure is probably the most attractive on the assumption that it can be successfully separated from the retail assets. Telecommunications infrastructure provides a long-term steady cash flow, which is highly valued by the market. Unfortunately, in Australia, there are no pure play communication tower investments. Telstra's communications infrastructure is part of the overall business and has not yet been demerged as a separate business; similarly with TPGs cable infrastructure.

That may be about to change after a restructure announced last year, which resulted in Telstra splitting its infrastructure assets into a separate business segment called InfraCo. InfraCo consists of exchanges, ducts, data centres, subsea cables, fibre and 8000 towers that host networking equipment. We have just seen a data centre at Clayton leased to a REIT (#2379).

Towers and other parts of InfraCo generate revenue from servicing Telstra alone. If this division was separated from Telstra, these assets could increase revenue by servicing other telcos. A tower that now services only Telstra could service all three mobile networks. Competitors would have to supply their own networking gear, but the infrastructure owner could earn three times as much revenue. Mobile network towers are a natural monopoly and it makes little sense to duplicate a network once it has been constructed. There is no duplication of water pipes or electricity wires and the same can apply to mobile towers. This is an important opportunity for investors to grasp.

Expect an Infrastructure entity to emerge; high yield, low growth, geared? .... especially in this 'low interest' era.