By Bruce Williams

After years of battling government intervention, and trying to evolve with technology, tomorrow seems to be looking a lot brighter for Telstra (TLS).

Telstra’s past

When first floated, TLS was a bloated government-owned business with dominant market positioning spanning all forms of communication services. This included directories (white & yellow pages), fixed-line (home phone and internet), infrastructure (poles, wires, towers and ducts) and mobile communications. With operational efficiency and customer experiences less than optimum, new competitors entered.


To maintain market leadership TLS has had to update its offering, at significant cost, whilst maintaining legacy products, e.g. home phones, with declining sales.

Government Intervention

TLS was forced to sell their wholesale fixed-line internet business to the NBN and pay access charges for their remaining retail fixed-line business. NBN access charges have been very high in order to generate a return on its massive cost base, impacting retail fixed-line internet margins across the industry.

Are investors getting over their hang-ups?

There are three reasons to look at TLS more favourably.

1. Simplification is coming to fruition. As an example, last year they reduced the number of retail and small business plans from 1800 to 20.

2. The NBN transition is almost at an end, so the negative earnings impact should subside.

3. 5G is coming to market. With data speeds and capacity unmatched by previous technologies (including NBN) it presents an opportunity for TLS to increase mobile pricing, advance mobile network leadership and compete against NBN fixed line, supporting medium term mobile margins and sales growth.

If you would like more information please call 1300 ELSTON or contact us to speak to one of our advisers.