[LINK] They're doomed

[David Boxall]

As a shareholder I hope Telstra management gets its act into gear before 
it's too late, but I wonder whether the nation might be better served if 
the company withers and dies.

>From 
<http://www.smh.com.au/business/fleeing-customers-dent-telstra-revenues-20100418-smlh.html?skin=text-only>
>
>
>   Fleeing customers dent Telstra revenues
>
> Date: April 19 2010
>
>
> *Lucy Battersby*
>
> TELSTRA is unlikely to meet its current revenue forecasts, analysts 
> have warned as they highlighted a decline in customer numbers as the 
> company's biggest challenge.
>
> Analysts and investors say declining customer revenue is a more 
> significant threat to Telstra's long-term revenue than the proposed 
> national broadband network. They are urging the company to cut retail 
> prices to arrest customer attrition.
>
> Telstra's cash flow was likely to be $400 million less than forecast 
> this financial year, at $5.6 billion, a Goldman Sachs JBWere analyst, 
> Christian Guerra, said in a research note.
>
> His forecast is based on the decline in fixed-line customers and 
> uncompetitive mobile and broadband plans.
>
> ''The [first half of 2009-10 financial year] result highlighted some 
> of the most concerning operating trends seen in Telstra's recent 
> history,'' Mr Guerra said.
>
> Its mobile phone plans were the least competitive, and its customer 
> growth declined by 83,000 in the last six months last year.
>
> ''Telstra's dilemma is clear. It does not want to lower its mobile 
> pricing to accelerate the shift of high-margin traffic away from its 
> fixed network and onto Australia's three mobile networks,'' Mr Guerra 
> said.
>
> Telstra's recent attempts to improve fixed and wireless broadband 
> packages would slow customer attrition rates, but the prices were 
> still uncompetitive, he added.
>
> On December 18 Telstra warned sales revenue in 2009-10 would be lower 
> than previously forecast because customers were leaving its fixed 
> phone and broadband services faster than expected.
>
> But the long-term trend was a more significant threat to Telstra's 
> long-term profitability than the government's proposed broadband 
> network, said a Perennial Growth partner, Richard Macdougall.
>
> Institutional investors could expect Telstra's share price to weaken 
> further if it does not make a deal with NBN Co, because that would add 
> even more uncertainty to the company's future.
>

-- 
David Boxall                    |  In a hierarchical organization,
                                |  the higher the level,
http://david.boxall.id.au       |  the greater the confusion.
                                |                     --Dow's Law.