What will happen with Telstra? (1 Viewer)

[UGFighter]

There's another thread going on, debating the services provided to country people by Telstra.

However, with the recent dump in share price of Telstra yesterday.. and the worst possibly yet to come, what is going to happen with Telstra?

Keep in mind, the Government has wanted to sell their 50.1% stake of Telstra for ages because they know what sort of trouble the company is in financially.. The Government was originally looking for $5.25 a share, but will now be lucky to sell their huge stake at current prices I feel.

We have T3 floating, which is essential for this company to stay afloat financially... The fact they're floating for yet the third time when they are a MASSIVE company is worrying enough itself, let alone added to the troubles of a falling share price and the Government looking to sell their stake while fund managers who have weightings to abide to are selling out of Telstra and a flurry of small investors on top of that as well!

Suppose the Government gets rid of their stake in Telstra and TLS is no longer owned by the Government... if TLS fails financially and can't continue to operate, what will happen to our communication services? Will they be the responsibility of the public, or is there something in the Australian Constitution which means the Government has to provide these services by law?

 

[katie_tully]

empty tin + string = phone

 

[MoonlightSonata]

is there something in the Australian Constitution which means the Government has to provide these services by law?

No. ..........

 

[UGFighter]

so once the Government sell their stake in Telstra, the communication industry is up to the public?

 

[Raginsheep]

You mean up to the private sector? Yeah....basically.

 

[Raginsheep]

And it doesn't now?

 

[UGFighter]

Yeah, private sector.

Telstra is already competing... Orange, Optus, Kooee, 3, Vodafone, Dodo, Netspace, just to name a few.

The margins are cut-throat.

What Telstra has that others don't is the infrastructure that provide these services... Telstra is forced by the ACCC to rent these out to other companies at reasonable wholesale prices so they can compete with Telstra.

Telstra also has to deal with VOIP on top of a cut-throat competition market.

 

[UGFighter]

How so?

10 char

 

[Raginsheep]

Yeah, but they know that if they dont compete they'll still be held up by government funding.

If Telstra collapses now, I'd think that the government would still bail it out. Its one of the largest corporations in Australia and owns one of our most vital peices of infrastructure, the communications grid.

 

[Rafy]

Why do we need all these telstra topics? Isnt one enough?

 

[Sonic]

yeah the system will fail and optus will take over..maybe...
it's a possibility

 

[loquasagacious]

UG fighter why are you convinced that Telstra floating is indicative of dire financial straights and resultant revenue raising by the company.

Telstra does not own the T3 float, 50.1% of the company is owned by the government - if it is indicative of dire straights for anyone it is the government. It is them not Telstra who get the money.

 

[UGFighter]

UG fighter why are you convinced that Telstra floating is indicative of dire financial straights and resultant revenue raising by the company.

Telstra does not own the T3 float, 50.1% of the company is owned by the government - if it is indicative of dire straights for anyone it is the government. It is them not Telstra who get the money.

yeah, yeah, I know... my bad, sorry

Haven't followed TLS at all since I sold my holding, I just assumed that T3 was another float to raise more money for the company - I didn't realise T3 was the government selling their stake.

Anyway, TLS are still in a bad position financially.. ROE last time I looked was about 5%, which you can get at the bank.. I doubt the ROE has improved much as the assets are just far too capital intensive + the margins in it are just too cut-throat for it to be a profitable business.

 

[Götterfunken]

Ugh. It just went ahead. Evil, evil filibustering.

 

[Götterfunken]

Telstra's service could only be worse if they set Crazy Frog as the default ring tone for all phone serivces ...

And in other news today...

 

[Rafy]

bump.

Telstra will be sold: PM

The Federal Government is going to sell off more of its stake in Telstra in a public share offer in October and November despite its sliding value and the misgivings of some Coalition MPs.

The Prime Minister's Office said today the government would offer in the order of $8 billion of stock to retail and institutional investors, in Australia and overseas.

The government's remaining Telstra shares will be transferred to the Future Fund for the fund to sell down over time.

In a statement, the PM's office said: "The government has gone to the past four elections promising to sell its Telstra shares. For too long, the government has had a massive conflict of interest, as the owner and seller of Australia's largest teleco and as the industry regulator.

"Selling Telstra continues to be good policy that is in the interests of existing Telstra shareholders, in the interests of the company and in the interests of the broader community. [...]

http://www.smh.com.au/news/business/telstra-will-be-sold-pm/2006/08/25/1156012731231.html

 

[IceOnFire]

According to my economics teacher, there might be a rat in the Telestra campus which means they are purposefully pulling the prices of shares down because they know there might be some big buyers in the market willing to buy when the shares owned by the Government are sold. Is this even a possibility? or my teacher is way off the track..

 

[bshoc]

My view is that all vital public infrastructure should never be sold to the private sector, be it power, roads or communications. Also if sold to the public, we may have to do to Telstra what they did to AT&T in the US back in the 80's.

Howard and the laissez faireies may get their short term economic kickbacks, but I guarantee you its the public who are going to be paying the real cost in the long run.

 

[IceOnFire]

well selling public assets will enable the Government to maintain its budget surpluses? lolz i duno. Currently it appears to be there are a lot of cons involved with selling the rest of the Telestra shares owned by the Government.

 

[banco55]

They shouldn't privatize it because they are unwilling to to give the company the necessary freedom that it needs to compete. If they are going to force them to provide totally uneconomical services to rural areas they should never have privatized them. Meanwhile you have people in the bush insisiting they should get better service and have broadband etc. I feel sorry for the poor bastards who bought shares in Telstra.