TLS - Telstra Corporation

sptrawler · 2 June 2010

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 · 2 June 2010

chb said:
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!!!

sptrawler · 10 June 2010

sptrawler said:
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.

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 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 · 20 June 2010

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 · 20 June 2010

boofhead said:
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 · 20 June 2010

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. . 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.

sptrawler · 20 June 2010

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

ROE · 20 June 2010

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

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

Tomorrow will be a good day...

ROE · 20 June 2010

boofhead said:
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 · 20 June 2010

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??

lemontree · 20 June 2010

Trembling Hand said:
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??

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

ROE · 20 June 2010

Trembling Hand said:
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??

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

Trembling Hand · 20 June 2010

lemontree said:
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

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 · 20 June 2010

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.

Boggo · 20 June 2010

sptrawler said:
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.

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 · 20 June 2010

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 · 20 June 2010

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 · 21 June 2010

TheAbyss said:
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.

TheAbyss said:
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.

TheAbyss said:
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 · 21 June 2010

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

skc · 21 June 2010

Stabilo said:
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...

TLS - Telstra Corporation

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