What is happening to the share price of Telstra (ASX TLS)
Stock
Telstra (ASX: TLS) $2.84 as at 27/11/2018
Event
The share price performance of Australia’s biggest telco has looked a bit sick over the past week despite no announcements from the company or much in the way of analyst comments. So what has been happening?
The selling has continued today with the stock down another ~1%, which can all be attributed to the ACCC’s regulation of Telstra’s copper services.
ACCC has long held Telstra to a set price the company can charge other telecommunication retailers for using their national copper network.
The market had held the view that this restriction would be either relaxed or lifted as the network becomes obsolete with the NBN being constructed, and the network loses its monopoly status.
There is still a portion of the population yet to be connected to the NBN, and even by 2024, ~8% of Australians, mostly in rural areas, will still rely on this network.
With the limitations still in place over Telstra’s copper line pricing, Telstra’s ability to lift profits remain constrained. However, as the company noted, with the extension of ACCC’s declaration, we will have to wait until early 2019 to see if they do raise the chargeable price.
Telstra (ASX: TLS) Chart
Market Matters Take/Outlook
