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![Quote](images/misc/quote_icon.png) Originally Posted by Snoopy
However the 21st May 2024 market update has indicated the inflation linked aspect of postpaid price increases will not proceed in July 2024:
"Today we announced that we will be updating the customer terms for our postpaid mobile plans to remove the CPI link annual price review. This change simplifies our pricing strategy by bringing the approach to postpaid mobile plans into line with other products. This approach reflects there are a range of factors that go into any pricing decision, and will provide greater flexibility to adjust prices at different times and across different plans based on their value proposition and customer needs."
This suggests to me that any mobile revenue increases for Telstra will likely track population growth in FY2025/FY2026 and mobile revenue growth will be no greater than that. That doesn't mean mobile network profit increases will be limited to that though, as there will be the cost savings from shutting down the 3G network.
I review the prospects of the three growth engines of this company going into FY2025.
1/ The mobile growth engine is possibly stalling.
2/ The cash benefit of the fibre superhighway is only starting to build AND
3/ Massive restructuring at Network Assets and Services is underway.
The prospect of any real growth in FY2025 is not looking great. Any forecast profitability increases from the company's historical growth engines being Mobile and TelstraHealth (being priced for recovery) are likely already priced in.
Interesting to see Telstra announcing today that they are lifting mobile plan prices in the coming few months, after canning the inflation increase in July 2024. They say it will be a price rise of $2-$4 per month. On a medium monthly plan of $65, that amounts to an increase of 3 to 6%. Probably a bit less than the previous year's inflation. But as a carrot, they are increasing the data allowance on their post paid starter plan, while keeping the price the same.
There is always some customer churn with price rises like this. So it will be interesting to observe what happens this time. With the threat of rising interest rates in Australia. I had been expecting the Telstra share price, with Telstra being a 'yield play', to head back down. Yet the opposite has happened over the last two weeks. Maybe someone second guessing a net positive from the mobile plan price rises announced today?
The other thing that may be happening is that investors are buying Telstra as a proxy for buying the $A, (like some international players buy Spark as a proxy for the $NZ). Thus if the Reserve Bank of Australia puts up interest rates in August, or there are enough market rumours to suggest that it might, then these international investors may sell down Telstra as the value of their $A invested in Telstra rises. Expect this little game, if that is what it is, to play out over the next month or so.
SNOOPY
Last edited by Snoopy; 10-07-2024 at 09:10 AM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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![Quote](images/misc/quote_icon.png) Originally Posted by Snoopy
ix/ Equity Investment Telstra is joint owner (35%), together with Newscorp (65%) of NXE Australia, trading as Foxtel, a pay TV operator. Foxtel operates using cable television, satellite television, and IPTV (Internet television) operator. What does the name mean? "Fox" represents News Corporation's 'Fox Network Television' and "Tel" representing Telstra. Foxtel transmits its cable service via Telstra hybrid fibre-coaxial (HFC) cable into the Brisbane, Sydney, Melbourne, Adelaide and Perth metropolitan areas, along with the Gold Coast. Foxtel's satellite service covers the rest of Australia. Foxtel on Mobile launched on Telstra's Next G Network in late 2006. Netflix is the market leader in pay TV in Australia (December 2019 figures, Roy Morgan) with 11.9 million subscribers. At the same date Foxtel had 5.5million subscribers. Third in this market is Australian-owned Subscription TV service Stan, which is now accessible by more than 3.3 million Australians. Stan is a fully owned subsidiary of the Nine Entertainment company.
Article today reporting from Newscorp sources that their majority owned pay TV provider Foxtel could be 'on the block'.
https://www.abc.net.au/news/2024-08-...xtel/104203940
"News Corp said after its full-year results that it had received "third-party interest in a potential transaction involving Foxtel"."
"The company announced it had been conducting a "strategic review" of its assets over the last year."
"In a statement, a Telstra spokesperson said the company has noted News Corp "are assessing strategic and financial options for the Foxtel Group"."
" "Consistent with the statements made by News Corp, there is no assurance regarding the timing of any action or transaction, nor that the strategic review will result in a transaction or other strategic change," the statement said."
I see NWS was up 7.6% on the release of that news with their fourth quarter result. while Telstra was up 0.3% or 1c. We can read into this that it was the strong performance by Newscorp subsidiaries in general that lifted the NWS share price today. Not the potential sale of Foxtel. But it will be interesting to see who this potential third party acquired turns out to be.
SNOOPY
Last edited by Snoopy; 09-08-2024 at 09:24 PM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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its all about the 'underlying' growth.
For clarity, nothing I say is advice....
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