TLS - Telstra Corporation

[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 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?

 

[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.

 

[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

 

[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

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.