On the AFR online - likely in the paper tomorrow;...

On the AFR online - likely in the paper tomorrow;

http://www.copyright link/street-ta...d-with-nbn-writedown-jpmorgan-20171203-gzxzbm

Telstra woes could end with NBN writedown: JPMorgan
Telstra shareholders have had a tough time of it in 2017.
They've seen the share price of Australia's largest telecommunications provider slump 32.9 per cent to $3.42, a near five-year low, since the beginning of the year and they've seen their much loved dividend, that was a very appealing 31¢, in 2016-17, cut to an expected 22¢ dividend, including both ordinary and special dividends.
The majority of Telstra's woes rest with the National Broadband Network, which has up-ended the telco market, especially the incumbent which is now searching for $3 billion in recurring earnings it will lose because it will no longer be the near-monopoly wholesaler.
So what could see Telstra shares get a jump start?

JPMorgan analyst Eric Pan reckons the answer is a restructuring of the NBN itself.

"We believe it would be in the best interest of Australians for the government to require a lower return on its investment in the NBN to allow the NBN to focus more on the service being provided rather than on profitability," Pan wrote in a note to clients.
"To do so, it's likely that the government will have to write down some of its investment. We estimate there could be 30-50 per cent upside to shares from the current level if such an event occurs."
The core of the problem with NBN is the price is needs to charge to make back the billions it is spending on infrastructure. It was set up by the government as a business and is not considered a public service like schools.
The Turnbull government has repeatedly ruled out writing down the project, but pressure is building for action.

Pan reckons a short-term boost for Telstra could come from a reduction in NBN's controversial CVC charge, which is based on how much capacity is bought.
"We believe that in the short term, the likely scenario that could potentially boost Telstra shares is the reduction (or potential elimination) in CVC charges," Pan said.
"The impact to Telstra from a change in pricing structure would be similar to the long-term solution except on a smaller scale. In such a scenario, we estimate there could be 20-30 per cent upside to shares from the current level."

On Friday, Telstra slashed its full-year earnings guidance by $600 million after NBN put a halt to the rollout of super-fast broadband on the pay television cable network, but investors have shaken off the news because they expect the profits to flow in later years.

Telstra cut its earnings before interest, tax, depreciation and amortisation forecast on Friday to between $10.1 billion and $10.6 billion.