Ann: Telstra Investor Day 2016, page-65

ok Doc,this is my take on the 'black hole'.
We have recently had 2 presentations by tls.
First presentation very negative-
-potential 'black hole in 2020 suggested by management of $2b - $3b ebitda in 2020 as a result of tls becoming a low margin re seller of nbn.(example tpg margin expected to reduce from current 40% to 25% as they become a nbn re seller so they have a potential black hole to.
-suggestion by tls a bad decision by accc could have a material effect on tls shareholders,and imo it was made very clear the potential threat of declaration in tls's presentation.
-Finally a list of approx 4 areas that could have a negative effect on eps.I can only remember a spectrum acquisition not being included in forecast ,but there were a few more.
So market spooked and shareprice fell .
Normally i would have been a buyer at the approx $5 mark,but their wording on accc declaration made me hold off.ie 4.72 and 4.82 after second much more positive presentation.

Then we had the second presentation as stated imo very positive,ie it was like explaining the second half of the story and alot more positive.
-first time ever a final figure was put on what tls will b charging nbn ie rental of $1b in approx 2020 increasing with inflation pa for 30 years.Thats $1b in 2020 rental which is better than a $1b decline in 2020 ebitda as above.
-a $1b cost cutting figure by 2020 imo mostly due to tls not being responsible for maintainance of their stuffed fixed infrastructure ,thats infrastructure eg ducts etc and of course wiring.
-the figure that also has to b included is tls currently maintaining a 50% market share with 3 devisions re selling nbn ie tls bundling,tls beyond low cost re seller and foxte re seller,of course on reduced margin but compenated by above.

Of course then everyone can make their minds up aboutthe sea cable /storage business, NAS,'the internet of things ' including tls's 5g network in 2020,tls 5g technology developments by 2020 and tls's 5g partnerships with global players by 2020.

Then any shareholder can decide if there is a threat to tls's eps/div in 2020 ie a black hole. imo