TLS - Telstra Corporation

[prawn_86]

Cold, level-headed facts should win the day - long term.

Am I missing something? Illuminate me.......please.

Cheers

What you are missing is that the facts can change dramatically, even on a long term fundamental outlook. What the market is essentially doing is pricing in a sum of all the probabilities of things happening.

Yes there is fear and greed, but that fear and greed is what determines peoples probabilities of outcomes.

So in theory, your analysis should have at least considered a couple different scenarios and you should keep evaluating with every news item to see if the company fundamentals change.

Just my opinion. Hope that helps a bit

 

[drsmith]

It will be interesting to see how the SP responds to the upcoming NBN tender announcement and whether there's too much negativity currently factored in.

 

[oremo]

It will be interesting to see how the SP responds to the upcoming NBN tender announcement and whether there's too much negativity currently factored in.

Read the report I previuosly posted. Long term, will it matter? TLS is a healthy standalone business. It's plugged into every building in Australia.

It's globally focussed as well. Looking to China. I don't know about you but if I want to plant vegies, I'll look for some fertile land to plant in. I'm looking for good yields for my crops.

 

[Trembling Hand]

KRUDD is building the network.

No one won it!!

Telstra back in the build if they want. to be up to 49% private owned

 

[jancha]

Hi,
Anyones thoughts on the Goverment building their own NBN? How will this effect TLS sp down the track?

 

[Trembling Hand]

Hi,
Anyones thoughts on the Goverment building their own NBN? How will this effect TLS sp down the track?

I would say the bigger effect will be this ann from the gov,

"comprehensive review of Telecoms Regulations"

 

[bloomy88]

Wow, what a turn of events.

Krudd must be joking if he thinks that the government will make the NBN cheaper than a private company though, all those lazy government beaurocrats must be rubbing their hands together at the moment.

A good result for Telstra though i beleive, means their competitors cant dominate the market and the government will probably sell it to Telstra in the end anyway...

 

[Jackob]

http://www.australianit.news.com.au/story/0,25197,25331701-15306,00.html

Telstra open to break-up

Michael Sainsbury and Jennifer Hewett
April 14, 2009

TELSTRA will consider a voluntary separation of its wholesale and retail arms as well as the sale of some assets to the federal Government's proposed $43 billion broadband network in a spectacular about-face that effectively dumps the aggressive four-year strategy championed by chairman Donald McGauchie and chief executive Sol Trujillo.

The radically different and more conciliatory approach is part of an attempt to ward off the threat of much greater government intervention in Telstra's business. The company's board has set up a special committee of directors and executives to come up with a new approach and to negotiate with the Government.

The committee, headed by Mr McGauchie, will focus on how best to respond to the Government's twin announcements that it will build a $43 billion high-speed fibre-to-the-home broadband network and will pursue a comprehensive review of regulation that includes the prospect of forcing Telstra to sell a range of valuable assets.

Although company sources say it is too early to tell which options Telstra will pursue, the move signals the company's acceptance that its long-running war with two consecutive governments has backfired, and it must find a way to adapt to the new reality.

News of Telstra's plan comes as Malcolm Turnbull argues in The Australian today that the new broadband network will be able to operate only with a massive government subsidy - probably for most of the $43 billion. "Unless we (completely unrealistically) assume that the vast majority of potential customers take up the Rudd net services and that they will pay very high monthly fees in the order of $150 to $200 per month, there is no way that Rudd net can deliver a commercial return on $43 billion of investment," the Opposition Leader writes in an opinion piece.

He likens the proposed spending to the failed business case for Sydney's cross-city tunnel, which cost nearly $1 billion to build but went broke, with shareholders losing their investment.

Telstra's new committee does not include Mr Trujillo, who is due to leave the company on June 30 but is spending even more time than usual travelling overseas. As well as Mr McGauchie, its members are directors John Stocker and Peter Wilcox, with chief financial officer John Stanhope, business head David Thodey and new head of marketing Kate McKenzie.

The options under consideration would include Telstra selling some of its existing fibre assets into the new network in exchange for a minority stake in the new majority government-owned broadband company.

Canberra wants this to reduce the likely cost to taxpayers of the proposed network, as well as the complexity of building it over eight years.

The Government is arguing that the current regulatory system of limited operational separation of Telstra's wholesale, or network, operations has failed to encourage viable competition to the dominant player, and quick action needs to be taken.

That makes the potential splitting of Telstra's wholesale and retail businesses likely to be the most immediately sensitive issue to be considered.

A government discussion paper on regulatory reform, released last week to coincide with the national broadband network announcement, asks for submissions on a range of options to reduce Telstra's dominance and ensure the success of the network. These include "functional separation", under which network operations would be ring-fenced as a separate entity but still owned by Telstra.

The network arm would have its own management and accounts, and would treat everyone who uses the network, including Telstra, equally in terms of information access and pricing.

Under pressure from the regulator, Britain's former monopoly carrier BT Group agreed to a separation of functions in September 2005. Telecom New Zealand went down the same path early last year.

Last week's discussion paper, which also canvassed the option of forcing Telstra to sell part of its fibre cable network, suggested the British and New Zealand experience had been positive for customers and not necessarily bad for shareholders.

Mr McGauchie had railed against the prospect of even a mild form of further separation. Telstra insisted it would continue to fight any such proposal because the impact on the telco would be disastrous.

But the Government's decision to fund the national broadband network, and the implicit threat it would consider dismembering Telstra, have led to a big shift in attitude at the top.

The new mood is that the best way to protect shareholder interests is to co-operate in negotiations with the Government to restrict potentially damaging government actions.

The special Telstra committee was formed a few days before the Government's announcement last week, reflecting the understanding that a drastic change in its approach to government relations was required.

"It is clear that the discussions and negotiations with the Government on the national broadband network will occur over an extended period of time and will continue well beyond my tenure as the company's CEO," Mr Trujillo wrote to all staff on the day of the announcement.

"Accordingly, we have put in place arrangements that will provide continuity in our NBN engagement with the Government. We have established a joint board-management committee, which is capable of conducting these negotiations and discussions over the extended period during which they will occur, over coming months and perhaps years."

Mr Trujillo said that knowing more about the Government's long-term broadband plans would enable Telstra to deal better with any strategic options that must be considered. But it is clear Mr Trujillo will have virtually no role in developing the new strategy and rolling back the formerly aggressively unco-operative Telstra approach.

Mr McGauchie and Mr Stanhope held a long-planned meeting with the Prime Minister's office last Wednesday, and Mr McGauchie has cancelled a business trip to China this week to concentrate on Telstra's NBN response and the selection of Mr Trujillo's replacement.

As well as looking at a short list of external candidates, the board is considering a list of internal candidates, including Mr Stanhope, Mr Thodey and Sensis chief Bruce Akhurst.

 

[ands]

Would a breakup be a good or bad thing for Telstra shareholders? The share price hasn't be knocked around too much since talk of a break up started.

 

[drsmith]

That's because it was knocked around beforehand.

Telstra need to kiss and make up with the government. Then, hopefully they will be in a better position to discuss future arrangements.

 

[trading_rookie]

KRUDD is building the network.

No one won it!!

Exactly, the only good thing for TLS is that they're back in contention to be part of a partnership ie NBNCo. As mentioned, TLS owns valuable assets like the exchanges that will route the optic fibre across Oz. The government can play hardball with TLS and introduce regulation to take ownership, but considering the number of voters in the country who are also TLS long term holders I doubt that's what they'd do. If anything, they'll be offering TLS a strategic position within NBNCo. that will see the assets either sold to NBNCo. or do what SingTel did with their assets and lease them to the government.

Telstra back in the build if they want. to be up to 49% private owned

Typical Rudd hypocrisy during the launch...having a dig at the previous government for selling TLS, then making mention that NBNCo. will be a fully public company within 5 years...doush-bag.

A good result for Telstra though i beleive, means their competitors cant dominate the market and the government will probably sell it to Telstra in the end anyway...

The gov is replacing one monopoly with another, ie TLS for NBNCo. I wonder how they're going to deal with the conflict of interest of being both the regulator and wholesale owner?? TLS will only dominate if their sold or leased assets to NBNCo. give them a greater say in the new partnership of TLS, Optus, Maquarie, AAPT (Telecom NZ), Vodafone/Hutchinson, etc, etc.

Would a breakup be a good or bad thing for Telstra shareholders? The share price hasn't be knocked around too much since talk of a break up started.

Talk of a breakup has been mentioned ever since the launch of T3 - re-read the prospectus. It'll be a good thing if we end up getting shares not only in the incumbent (TLS) but in NBNCo. as well. How cool would it be if for every 1 TLS share you have, you're entitled to 1 NBNCo. share ;-)

According to BT and Telecom NZ, a break-up of their businesses by their respective governments has seen a disastrous affect on their share price...can't see TLS letting go of Foxtel and the HFC Broadband business without some kicking and screaming...unless the government offers them a sweetener...sweetener's however more often that not have a use by date, usually the election of a new government.

An analyst commented that if the NBN can't be made to work at $10 billion what makes Rudd think it will work at $43 billion? According to the analyst the return will take forever unless the pricing model is very expensive. That of course can't be true, since it was meant to be affordable to everyone.

The original idea was to lay fibre to the pillars - those grey stumps that one sees on street corners, and then it was to utilise the copper wire running from the pillar to every house, business, etc connected to that pillar. That's been scrapped since they'd have to compensate TLS (figure is roughly $3 billion) and the technology to do this would be out of date in the not too distant future and have to be replaced. This non-upgradable idea would have cost them $13billion.

The problem with fibre to the home (FTTN) is they're going to have to dig up streets and footpaths, and for those with telegraph poles, there will lbe bureaucratic red tape as most councils think there is enough wire hanging off them already. The government has yet to decide who will pay for NBN to flats and units - as the cable will probably go to the basement and then use existing copper wire via a new technology called VADSL (cousin of ADSL) to every tenant. For those buying in green belts you'll be slugged an extra $5K for the installation of ducts in anticipation of NBN....all this in 8 years and two federal elections.

 

[Jackob]

http://www.australianit.news.com.au/story/0,25197,25345919-15306,00.html

Telstra chairman's future uncertain

Mitchell Bingemann | April 17, 2009

THERE'S no doubting that, come June 30, Telstra will have a new chief executive, but the fate of the telco's chairman Donald McGauchie is not as certain.

The tide of disapproval has been steadily building behind Mr McGauchie since Telstra was dumped from the Government's original national broadband network tender process in December, sending the company's shares into a downward spiral.

While a lot of the blame for its exclusion was dumped on outgoing chief executive Sol Trujillo, the blame game has started to shift to Mr McGauchie, who has become the face of the company since the Government reinvented the national broadband network and invited Telstra back to the negotiation table.

With regulatory reform looming and the possibility of functional separation on the cards, Mr McGauchie has his work set out for him if he wants to see through his term as chairman to 2011, analysts say.

Despite the challenges ahead, White Funds Management investment manager Angus Gluskie believes that Mr McGauchie's recent conciliatory approach towards the Government could bolster his chances. "The market on the whole can be too fast at times to turf people out, which can be a very destabilising change and the fact that McGauchie has taken a new tack is evidence that this is someone who wants to change and someone who might be able to develop new productive relationships with the Government," Mr Gluskie said.

But analysts say it could be a case of too little too late for the chairman.

"The Government's stance shows they are sick of Telstra's aggression," one analyst said. "The past has happened and now it's about doing whatever is best for the company."

This week it was revealed that Telstra's biggest shareholder, the Future Fund, had also been distressed by the telco's aggressive stance towards the Government and the regulator, and the telco's subsequent poor market performance.

However, analysts say that the Future Fund's chairman David Murray will have little say in what becomes of Mr McGauchie.

"When David Murray took charge of the Future Fund, McGauchie negotiated that Telstra's market performance would not dictate the chairman's position, so on those counts he should be safe," one analyst said.

"McGauchie's time is up but I don't think the Future Fund will have any say in that."

Industry speculation is running rife on possible replacements for Mr McGauchie, but three names keep rearing up above the rest. While some back former Telstra Countrywide boss and Acacia head Doug Campbell as a possible candidate, others are behind former Wesfarmers chief executive Michael Chaney.

However, in order to take the role Mr Chaney would be required to give up his seats on the boards of NAB and Woodside Petroleum.

Another hotly tipped candidate is current Telstra board member Peter Willcox, but he too has his share of hurdles to pass. Mr Willcox is a former board member of James Hardie; a current ASIC case against James Hardie's non-executive directors could wipe out his chances.

 

[oremo]

What's happening now with the SP? Is it fear, uncertainty?

Anyone in the (REAL) know?

Appreciate some feedback

Cheers

 

[Real1ty]

What's happening now with the SP? Is it fear, uncertainty?

Anyone in the (REAL) know?

Appreciate some feedback

Cheers

Imo there is a lot of people getting out of defensive stocks and into riskier growth stocks.

If we start a leg down, i think TLS will move up again but that is not fact of course, just my opinion.

 

[ROE]

Did I post sometimes ago about their transformation project?
they come, they pillage and they go ..the truth now surface.

http://www.australianit.news.com.au/story/0,25197,25571447-15306,00.html

 

[sqwark7600]

Did I post sometimes ago about their transformation project?
they come, they pillage and they go ..the truth now surface.

http://www.australianit.news.com.au/story/0,25197,25571447-15306,00.html

From that article: “Our national account executive was genuinely shocked because all the info at the top end is that (the) Siebel (billing system) is working well. He was also amazed (must be an excitable chap) at the operators who put you on hold and then disappear (hullo-this is Telstras signature tune). He even said that if he had to deal with that on a daily basis, he would be looking for another career," the dealer said.”

And therein lies the problem. Customers are moving to another supplier for high-end products. They’ll keep the copper line but won’t give T more opportunities to hang up for any other product. I recently moved house and it took me 15 calls and two weeks just to transfer the copper line and retain my old number to the new address in the same suburb. Call centre CSO’s ranged from the Gold Coast to Perth. I wrote the usual letter of complaint but like most decided it was a waste of time explaining problems to an organisation who seems bent on self-destruction by incompetence.

Of all people ex-IBM employee CEO David Thodey should be able to sort out a simple billing system. The market will continue to reward the company's inability to run a customer oriented telephone company by continuing their efforts to equate TLS share price to the last dividend.

 

[iASX]

My research group, iASX, is just about to publish a new target price for TLS, which I'm sure you'll find proves to be much more meaningful than flawed DCF valuation...


Best,
iASX

 

[sqwark7600]

My research group, iASX, is just about to publish a new target price for TLS, which I'm sure you'll find proves to be much more meaningful than flawed DCF valuation...


Best,
iASX

My research group iDUM is just about to ask your research group iASX do you expect a rush of subscribers, lured by your golden beacon of share trading wisdom, to now rush out and buy ignoring our beloved but "floored" DCF valuation.....miASS! Say hullo to the groupies.

 

[YELNATS]

Telstra's new $2.20 fee per transaction to be introduced on September 14 when you pay each of your bills at a post office, or at a Telstra shop or by mail, seems a bit over the top.

As I understand it, the only way to pay them fee-free is via the internet using B-Pay direct from your bank account. If you pay over the phone using a credit card you are slugged a percentage fee based on the payment amount.

I can see an outcry over this, especially from pensioners/older people who don't have access to a PC or the internet - ie. the poorest among us who can least afford to pay the impost.

Hardly behaving as a good citizen, Telstra, thought you were going to reform yourselves after the departure of the 3 amigos? !!?

 

[awg]

Telstra's new $2.20 fee per transaction to be introduced on September 14 when you pay each of your bills at a post office, or at a Telstra shop or by mail, seems a bit over the top.

As I understand it, the only way to pay them fee-free is via the internet using B-Pay direct from your bank account. If you pay over the phone using a credit card you are slugged a percentage fee based on the payment amount.

I can see an outcry over this, especially from pensioners/older people who don't have access to a PC or the internet - ie. the poorest among us who can least afford to pay the impost.

Hardly behaving as a good citizen, Telstra, thought you were going to reform yourselves after the departure of the 3 amigos? !!?

Pensioners are exempt.

I dont think other beneficiaries are though, not 100% sure.

As per others posts, there billing system still seems buggy

have had some "integrated" billing problems with our business account.

One thing that may be saving their ass is that Optus are even more hopeless.

I get calls on an almost daily basis on our various phones, from service providers, really frustrating, when you are trying to trade, and deal with genuine business calls.

and because the third party providers rely on these two, changing providers on an integrated account is problematical