growth business required - buy a bank, page-6

the below post is my opinion;

more people are seeing the light trent....I notice Ralph Norris and ANZ Bank have both identified Telstra as having a natural competitive advantage to traditional big4banks in the banking sector.

I suggest big fund managers rally to get Ralph Norris elected to the telstra board....then give Ralph 5,000,000 options with 5 year term and $3.50 strike price.

I would not be surprised to see telstra run like there was no tomorrow.....current management sees the following areas as growth;

1) media - well sorry this is a tight margin business, they don't have the power of media barrons, they don't have a heap of reporteers or movie studios - they will have to buy content for a high price (AFL / NRL rights) and then try to sell advertising, smart phones or data usage to earn it back. I am not saying that having sporting rights is a bad thing it is just they will have to always pay top dollar, they don't control the content.

2) IT Services - well yes may be some potential but a MS/Dell JV in cloud computing and a plethora of other multinationals are going to cram telstra out of this space when the NBN is up and running. Imagine telstra is paying for broadcast rights to afl and in comes google with killer application X watch the market run to google.

((((((((((((The only service area I can think of is Banking - Insurance - Finance. They could have first mover advantage if they got going now - as in tomorrow. Once people have financial content (accounts policies etc with telstra subsidiary's and a smartphone that is a credit card / mobile wallet they will be very sticky indeed.)))))))))))))

3) Asia - many countries have a close link between the business elite and political elite making it difficult for foreign businesses to thrive.......I don't know that current board has what it takes to expand up there...history of their activities in asia are poor other than the Soufun sale which was really a weak result but at least they didn't lose money.

Current board is hooked on customer service - this is ok but I don't think it will help much when the foreign multinationals come with their exciting new technologies and applications.

Current board is talking about a capital management and a share buyback....this made sense when the future fund was selling shares at $2.50 and I wrote a letter to telstra management saying borrow the money and take future fund out at these low prices as the interest rate on the brrowed money is less than the liability accrued through paying a 28cent dividendper share. Telstra said - no not until after the NBN deal is locked away. Well they have lost their opportunity for a meaningful buyback now ....and it just shows how clueless these guys are that they would rather give money back to shareholders rather than expand the business into a new growth engine such as banking.

I hold telstra shares and hope that they go up.


disclaimer; the above post is my opinion and is not to be used for making any decisions. The above post has been submitted for entertainment purposes.