Sharechat Logo

Daily ShareChat: Telstra

Monday 28th June 2010

Text too small?

Aegies Equities Research analyst Peter Warnes gives his view on Telstra following the announcement that the phone company had entered an agreement to be involved in Australia's broadband roll out.

Australia-based Telstra's A$9 billion ($11 billion) non-binding heads of agreement with NBN Co, the public-private company set up to oversee the construction of Australia's nationwide fibre infrastructure, is positive because it removes some of the uncertainty surrounding the teleco and provides compensation for the gradual wind-down of its old copper network and cable broadband service, says Peter Warnes, an analyst at Aegis Equities Research.

The deal involves moving voice and data traffic to the NBN and allowing NBN to use Telstra's existing infrastructure.

"Under the agreement, Telstra would be a key customer of NBN Co and would be subject to less regulatory interference," Warnes says.

"While there is still more work to be done and the federal opposition continues to oppose the NBN, this deal at least provides a more certain outcome for Telstra shareholders if the NBN does proceed," he says.

While as the incumbent teleco, Telstra suffers from heightened competition and unsympathetic regulators, it has largely completed a strategy to lower its cost base and enhance its product offering, Warnes says.

"Telstra is delivering on its milestones and is continuing to improve customer service levels which should reduce churn and mitigate some of the downside from the gradual decline of the PSTN network," he says.

Recommendation: Add (12-month view); Buy (long-term view).

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Telstra shareholders set to approve NBN split
Daily ShareChat: Telstra
Daily ShareChat: Telstra
Telstra returns to debt market with 1 billion euro sale of 10-year bonds
TelstraClear earnings growth stalls amid slower capital spending
Telstra cuts sales forecast for 2010, sees no revenue growth
Telstra rejigs structure, brings NZ business into single trans-Tasman market
Clear sale gets Commission green light
Market responds to US sentiment
NZ market dives on shock US siege