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Someone sent his (I don't agree with it... there are foregone NBN payments)

...let's have a look at Telstra and see if the market has got it wrong. Telstra has been a market darling for many retirees chasing the dividend and franking credits.

 

So what changed in respect to the company to result in such a material decline in its share price? Revenue? Profits? Market share and or positioning? Fundamentally nothing changed in respect to the underlying business, all that has changed is that Telstra's dividend has reduced from 31c to 22c.

 

Telstra has been valued as a yield stock and in order for the dividend yield to stay at approximately 6.2% the share price had to fall. The following tables shows Earnings Per Share are constant and the Price Earnings Multiple has reduced from approximately 17.0 to 10.9 times.

 

As such, numerous equities analysts suggest Telstra may have been oversold, and therefore may appear to be offering good value.

Telstra

Net Profit After Tax ($MIL)
Jun-16 .. 4,009
Jun-17.. 3,891
Jun-18.. 3,888
Jun-19.. 3,956

Earnings Per Share ÃÆâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚©
32.8
32.5
32.7
33.3

Dividend Per Share ÃÆâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚©
31.0
31.0
22.0
22.0

Franked Dividend
100%
100%
100%
100%

Dividend Yield
5.6%
6.3%
6.2%
6.2%

Price/Earnings X
17.0
15.2
10.9
10.7
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So what changed in respect to the company to result in such a material decline in its share price?

 

Huge changes in the fundamentals, as outlined by the Chairman

 

For Telstra, those challenges are being driven by a number of factors including:

 

- intense competition in both the fixed and mobile marketplaces

- an exponential rate of change in technology and connectivity;

- an unprecedented growth in capacity demand;

- a rapid acceleration in the rollout of the NBN, which will ultimately cost Telstra some $3b in EBITDA; and,

- the announcement that a fourth mobile network will shortly be launched in Australia.

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  • 4 weeks later...

AFR

 

Telstra and Optus lose ground against cheaper mobile providers, with iPhone boost ahead

 

EXCLUSIVE Nov 26 2017 at 11:00 PM Updated Nov 26 2017 at 11:00 PM

 

Telstra and Optus will expect to do better than cheaper rivals when it comes to signing up customers keen to use the new iPhone X. Michael Nagle

 

Telstra and Optus face increased competition for mobile customers from lower cost operators, which resell services on their networks, according to a study showing that more new customers are signing up with alternative providers than the big names.

 

The top telcos will be looking to the the recent release of the iPhone X and the Samsung Note 8 to swing things back in their favour, after Telsyte's Australian Mobile Services Market Study 2017 found that more than 200,000 of 444,000 new services in operation in the first half of 2017 were signed up to Mobile Virtual Network Operators (MVNOs), rather than directly with the largest telcos.

 

Telsyte found the top performing MVNOs in the first half of 2017 where ALDImobile, Amaysim and Kogan Mobile. Worryingly for Telstra, it added fewer new customers than Optus and was on par with Vodafone, with Optus appearing to be reaping some benefits from its mammoth investment in English Premier League football rights.

 

Telsyte senior analyst Alvin Lee said Mobile Network Operators (MNOs) such as Telstra, Optus and Vodafone tended to appeal to customers for different reasons than MVNOs. The former tend to attract customers who want value-added offerings such as bundled services and media content, whereas the latter's customers tend to base their decisions on price.

 

Telsyte analyst Alvin Lee said Optus was seeing the value in its sports rights, but many customers were currently focused mainly on price.

 

He said the majority of customers seemed to be less impressed by the relative technical prowess of 4G networks than they were when they were new, and that this avenue of competition would re-emerge when 5G is operating by 2020.

 

"MVNOs are putting more pressure on carriers particularly in the $30 to $60 range, targeting consumers who are looking for more data at better price points ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¦ Generally speaking the network is less of a differentiation now than comparing to when 4G first came out about five years ago, unless we look at specific non-metro areas. Consumers are also more price sensitive in the current economy," Mr Lee said.

 

"Telstra's mobile profits are under pressure and this is being factored into the share price ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¦ it is facing a tough fight from here to the commercialisation of 5G."

 

Optus took a big punt on football as a drawcard for new telecommunications customers, paying a hefty $63 million a year for three years to outbid News Corp's Fox Sports and attracting controversy after its restrictive English Premier League (EPL) packages and technical troubles beset its first season. It also unveiled plans in July to invest $1 billion into a widespread upgrade of its regional mobile network.

 

Sports as a retention strategy

 

However, Mr Lee said Telstra had used mobile rights for AFL, NRL and netball as a successful lure for mobile subscribers and Optus appeared to be seeing the benefits in its own sports package.

 

"We have seen strong growth in Optus post-paid mobile segment since they acquired EPL rights, and it seems to be working as a retention strategy," he said.

 

"We believe content is still an important differentiator in the market that is much more price sensitive."

 

Telsyte found that more than half of handsets were on non-contract plans, but despite this, re-contracting of premium priced handsets such as the iPhone X and the Samsung Note 8 were likely to help the MNOs fight back against the MVNOs in the second half of 2017.

 

It estimated that up to 65 per cent of iPhone sales in the second half of 2017 would be via mobile contracts, compared to around 50 per cent in previous iPhone "S" model years.

 

"The majority of MVNOs focus on BYO ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ SIM only ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ or prepaid plans. Not everyone can afford to pay the upfront cost of premium handsets and the carriers provide the option to subsidise or repay handsets on more affordable terms," Mr Lee said.

 

"The new iPhones are driving a re-contracting cycle, which is helping carriers maintain customers in an otherwise highly price-competitive market."

 

 

TLS

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Big investor drops $350m Telstra stake - no one has come forward yet but suggestion is US fund manager Capital Group

 

A big offshore investor dropped 103.7 million Telstra shares after lunch on Tuesday, in what was the biggest single line of Telstra shares traded this year.

 

The stock was sold at $3.36 a share, which was a 10ÃÆâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ discount to Telstra's last close, and an intraday low.

Read more: http://www.afr.com/street-talk/big-investo...1#ixzz4zsSLprPE

https://www.shortman.com.au/stock?q=tls

 

post-330173-1512008304_thumb.png

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time to buy in slowly as it under 3.50. imho just for the yield for next two years.

 

when someone been "forced" to sell it { need money somewhere}, and stock has some value then is the time to look at this dog.

10---20% return in two years from now on { ff divy included}. too risk to look at others as most of major market deep into overbought territory.

 

 

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Telstra revises FY18 guidance for nbn

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ FY18 reductions due to HFC cease sale and updated nbn corporate plan

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ Guidance unchanged outside updated nbn rollout and disconnection assumptions

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ FY18 expected dividend reaffirmed at 22 cents per share

........

blah blah, all old news, nothing that we don't know.

i'm gonna buy some more today, because yield for next two years is good enough. :o

 

 

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NBN halts HFC rollout

The installation of Hybrid Coaxial-Fibre connections will be delayed for six to nine months, says NBN Co boss Bill Morrow.

Its total income has been revised down by $700 million. It was expected to be between $28.3 billion and $30.2 billion for 2018. This has now been revised to $27.6 billion to $29.5 billion.

 

The NBN delays, announced on Monday by NBN chief executive Bill Morrow, are anticipated to impact those intending to connect to the national broadband network through their existing pay TV or internet cables.

 

http://www.smh.com.au/business/media-and-m...130-gzwg77.html

Telstra's chief executive Andrew Penn "applauded" the NBN's decision to prioritise customer experience and said while ...

Telstra's chief executive Andrew Penn "applauded" the NBN's decision to prioritise customer experience and said while it affected Telstra financially, the implications would not be "long-term" in nature. Photo: Pat Scala

This could leave many waiting for up to nine months while technical issues are sorted out for customers on the hybrid fibre coaxial (HFC) network.

 

The delay specifically affects Telstra, whose previous guidance had been on the assumption that the rollout would be in line with NBN's 2017 corporate plan.

 

 

The revised guidance also takes into account a re-issued NBN Corporate Plan 2018 in August - which reduced the number of brownfields ready-for-service premises and cut 200,000 brownfield activations compared to the previous year's plan.

 

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Despite the impact for 2018, the market announcement said the delay "will be modestly financially positive to Telstra over the full rollout due to the effects of a natural hedge".

 

http://www.smh.com.au/business/media-and-m...130-gzwg77.html

Telstra has revised down its expected income for fiscal 2018, but there's no change to the 22 cent dividend.

Telstra has revised down its expected income for fiscal 2018, but there's no change to the 22 cent dividend. Photo: Pat Scala

And while Telstra chief executive Andrew Penn remained elusive on Thursday about changes to the dividend, the market announcement affirmed this would remain at 22ÃÆâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ a share as per its announcement in August.

 

Mr Penn "applauded" the NBN's decision to prioritise customer experience and said while it affected Telstra financially, the implications would not be "long-term" in nature.

 

The NBN was confident it would meet its 2020 deadline of 8 million homes having access to the NBN.

=======================

 

here we go.

will TLS be the safety bet as other major market about have decent correction?? :unsure:

 

 

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from SMH

What could see Telstra shares get a jump start? JPMorgan analyst Eric Pan reckons the answer is a restructuring of the NBN itself.

 

"We believe it would be in the best interest of Australians for the government to require a lower return on its investment in the NBN to allow the NBN to focus more on the service being provided rather than on profitability," Pan wrote in a note to clients.

 

"To do so, it's likely that the government will have to write down some of its investment. We estimate there could be 30-50 per cent upside to shares from the current level if such an event occurs."

 

Pan reckons a short-term boost for Telstra could come from a reduction in NBN's controversial CVC charge, which is based on how much capacity is bought.

 

"We believe that in the short term, the likely scenario that could potentially boost Telstra shares is the reduction (or potential elimination) in CVC charges," Pan said.

 

"The impact to Telstra from a change in pricing structure would be similar to the long-term solution except on a smaller scale. In such a scenario, we estimate there could be 20-30 per cent upside to shares from the current level."

 

On Friday, Telstra slashed its full-year earnings guidance by $600 million after NBN put a halt to the rollout of super-fast broadband on the pay television cable network, but investors have shaken off the news because they expect the profits to flow in later years.

 

Shares are up 2.1 per cent today.

http://www.smh.com.au/business/markets-liv...203-gzxwsp.html

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We believe it would be in the best interest of Australians for the government to require a lower return on its investment in the NBN to allow the NBN to focus more on the service being provided rather than on profitability," Pan wrote in a note to clients.

 

"To do so, it's likely that the government will have to write down some of its investment. We estimate there could be 30-50 per cent upside to shares from the current level if such an event occurs."

=============================

 

isn't it the same news that knocked TLS share price off few days before?? talk about freaking market guru!! :lol:

 

thanks for info feed blacksheep!! :P

 

 

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