[LINK] Telstra - taking its ball and going home.

[Frank O'Connor]

Yo Ace,

At 1:54 AM +1000 8/8/06, Adam Todd wrote:
>You know, when the first round came out at about $6 wasn't it?  I 
>told people they were over inflated and would never get the return 
>they were being sold.  I don't think the shares have ever been 
>higher than the original release price from what I recall and I'm 
>sure someone mentioned this recently.

The first release was about $2.95 all up from memory - payable in two 
instalments ... in 1997. It went stellar shortly thereafter (to about 
$8) and then faded to the price asked at the second Tranch ($7.20 
odd). Then Ziggy and Mansfield got to work and it dropped steadily to 
about $5. Then Trujillo and his heroes got to work and it dropped to 
about $3.80 so far.

>I'd suggest not selling the shares to be honest :)  Unless she needs 
>the extra $10 cash, she's better just leaving them and taking in the 
>44 cent a year dividend.  One day, maybe, the value of a Telstra 
>Share might be worth the fee to cash them in :)

The dividends were about the only thing that kept me from advising my 
mother to sell a year back.

That said ... with the share price still dropping, no plans for the 
future and little in the way of any ideas evident from management 
(other than 'more of the same') Telstra are looking REALLY 
unattractive at the moment.

Telstra got taken over by its bean counters and tax advisors about 20 
years back ... and everything has gone down hill since then. Then 
they got into mobile and other services ... which competitors and 
their own 'partners' quickly saturated. Then they decided to make 
their money from renting out the existing, and no doubt amortised to 
a null value on their tax balance sheets, copper at exorbitant 
prices. When this sent a large body of their previous clientele to 
other providers and mediums, they started their current strategies of 
milking government subsidies without providing the commensurate 
service levels, and providing less than optimum service on existing 
infrastructure (1.5 Mbs ADSL vs 22Mbs ADSL 2 for example) at a 
premium price.

Now they want any regulation that affects them repealed, so the 
benefits of the 'competition' that we've seen so much of above can be 
expanded.

Silly me. To my mind comms is as much part of the national 
infrastructure as roads, hospitals and schools ... but Telstra (and 
the government) obviously knows better.

Net result: We're left in a slowly failing 1970's time warp whilst 
the rest of the world gets into the 21st century.

And yeah ... I'll still be advising my mother to sell on the weekend.

						Regards,