Telstra’s Share Price Continues to Sink

Shares of Telstra [ASX:TLC] have been suffering all year due to dealing with high levels of competition.

They managed to gain billions from the sale of their copper network to NBN functionalities, however it wasn’t enough to counter the impending competition.

Today its shares dropped by 2.18%.

They are now trading at $2.81 a share.

Telstra’s shares haven’t been valued this low since 2011.

Since its drop, Telstra’s company value has declined by billions.

Earnings from the NBN won’t last forever

The market has no idea how Telstra’s earnings will be replaced after its NBN profit.

Telstra believes there are revenue challenges are increasing.

iTwire.com reported that analysts stated:

Similarly, with NBN competition so intense, we think any wholesale price cuts are likely to be competed away rather than delivering margin expansion for retail service providers.

Challenging dynamics led to trading difficulty, which made business hard for Telstra.

Increased competition from other providers have also made it difficult for Telstra to make the cut for customer value.

Telstra will need to properly analyse the growing competition, while developing a strategy to counter it properly.

Shares dropping isn’t the only thing Telstra have faced lately.

Analysts believe Telstra needs to be more aggressive with its cost-cutting, while focusing on asset sales and even providing competitors with core infrastructure access.

Today, subscribers of Telstra’s services experienced a power outage across the company’s mobile network.

This marks its second nationwide mobile outage this month.

A bad sign for subscriber loyalty.

Almost 4000 customers reported issues in regard to the outage.

Many frustrated customers flooded its social media profiles, complaining about the outage while demanding compensation for the problem’s occurrence.

Telstra’s struggles with competition will further increase if their services prove to be faulty.

Regards,

Ryan Clarkson-Ledward,
For Money Morning

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Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

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