Don't believe the Telstra hypeSunday, August 13, 2006Terry...

Don't believe the Telstra hype
Sunday, August 13, 2006
Terry McCrann


Thank goodness for all that frenzied nonsense over Telstra. At least it helped mute all that nonsensical frenzy over interest rates.

Let’s get some basic facts clear. One — Telstra remains hugely profitable. It did not — as I heard one hyperbolic radio shock jock assert — have a record loss. Its bottom line profit was over $3 billion.

Two — it is generating enough cash to fund its multi-billion dollar capex spending every year; and also pay a very good dividend.

Three — it is whipping its competitors butts. Its operating margin remained at an incredible 45c out of every revenue dollar. And that’s more than $23 billion of revenue. Indeed, it is growing revenue three times faster than Optus — and that's after including the dead weight of falling revenue on the old fixed line business.

So — bottom line, four — there is no reason in the world why T-3 can’t proceed. And indeed should proceed.

Well, actually, correction, there are two reasons. Thoroughly asinine and plain gutless politicians — otherwise known as cabinet ministers who don’t understand any of this.

Secondly — that the best way to dispose of the government’s stake in Telstra is actually to give the shares to the real owners — you. That would avoid having to guess at a sale price and would also avoid handing half a billion dollars of your money to investment waankers, sorry bankers, accountants and lawyers.