With over a million shareholders and losses on most of those holdings, Telstra is now a dividend play for many small shareholders. Thoughts of capital gains are now just distant memories. The current 28c a share payout was sort of supported at yesterday's investor day in Sydney, but there were other issues, the NBN, customer service and spending to get that right, revamping the company, job cuts. In fact there was plenty there for the usual suspects among our jotters to latch on to, which they did this morning in a range of views. News Ltd's Terry McCrann points out: "The Government's National Broadband Network strikes at Telstra's heart. It is also a key component in a future growth strategy for Telstra. The contradiction emerged from Telstra's Investor Day briefing. That simply, the NBN is the final conclusive step in destroying Telstra's former monopoly. But it will also underwrite Telstra's future competitiveness. That's of course if Telstra can seize the opportunity. Because it gets a running start into a future NBN world over its competitors. Both by the nature of its $11 billion deal with the Government and its entrenched assets and skills." Get the NBN right and Telstra is sitting pretty. So what will Graeme Samuel say about that? And John Durries of The Australian wrote in his commentary this morning: "David Thodey has gone some way towards rebuilding confidence in Telstra, but the elephant in the room remains the NBN and regulation. All going to plan, NBN would solve both problems for Thodey, complete with an $11 billion handout to fill his coffers, but that is all out of his control, so the aim of yesterday's investor briefing was to show what he will do with or without NBN. The early signs are clearly positive from a chief executive and management team growing into the job." Fairfax's Liz Knight says: "There were a couple of very clear messages from yesterday's presentation from the current Telstra chief, David Thodey. The overwhelming one is that the company faces a bleak commercial future if it doesn't become more customer-friendly in terms of price and service, and that to do so will cost it $1 billion....The good news is that the government is going to underwrite Telstra's income to the tune of $11 billion over the coming years. This no longer looks like a death sentence but more like a lifeline, even through we still don't have much detail on many important aspects." The Australian Financial Review claimed this morning that "Telstra will slash around 6,000 jobs, or 15 per cent of its workforce, over three years as it seeks to return underlying profits to last years levels and revive its share price despite uncertainty over its $11 billion deal with Labors national broadband network." The paper's Chanticleer takes a very different tack on the NBN, under the headline this morning " NBN cloud dims Telstra effort" and says that until "there is clarity on the NBN ... there will be a cloud of the stock". That's in contrast to the look through the current situation approach of McCrann, Knight and Durie. And Malcolm Maiden says: "Thodey and his lieutenants spent 4 hours trying to answer that question, and their centrepiece was Project New, a three-year plan to use the networks and information technology Sol Trujillo installed when he was chief executive to transform Telstra into something that Trujillo also said he could deliver: a leaner, customer-centric and inherently more profitable organisation. The project has already been launched as part of a $1 billion one-off spend this financial year on new products, mobile handset subsidies and more aggressive pricing strategies. And the early signs are that revenue momentum is improving." Tim Boreham..."Telstra shareholders are likely to vote on the monumental $11 billion national broadband sale by the middle of next year. It is a timetable that inevitably has slipped from the original indication of a first-quarter plebiscite. However management hopes to be able to detail some of the information gaps about the deal at the telco's AGM, to be held on November 19."
TLS Price at posting:
$2.66 Sentiment: None Disclosure: Held
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