The NBN, along with heated competition from other internet and mobile services providers sure did throw a spanner in the works of Telstra’s share price recently. So much so that from its August 2015 peak to today, Telstra Corporation Ltd [ASX:TLS] shares have lost more than 50% of their value.
Currently shares of Telstra are trading at $3.20, climbing a modest 0.47% for the day.
Telstra’s new strategy taking affect
Earlier in the year Telstra announced it plans to halve its empire in order to deal with the rapid change that all telecommunication have faced after advances in the way we use our phones and interact with the world.
Things are still looking quite precarious for Telstra’s share price, with predictions that current trading conditions could extend into next year. It does however appear that some damage control has been done over the last four months. Telstra’s share price has been slowly and consistently edging upwards in that time.
Progress, even if it is incremental.
For the drastic measures and cuts that the company took to adapt to the rollout of NBN, this is by no means a bad recovery.
In fact Telstra is up 19% since the beginning of its 2019FY guidance at $3.11. But in reality it still remains to be seen whether Telstra is actually the worthwhile stock it once was.
Rival competition aiding Telstra’s share price
In recent months we have major news on the telecommunications front, with the announcement of a merger between two of Telstra’s biggest competitors, TPG Telecom Ltd [ASX: TPM] and Vodafone Hutchison Australia [ASX:VHA].
You’d think two big rivals of Telstra joining forces would be terrible for Telstra’s share price, but some think this could actually mean less competition over pricing. Especially considering TPG was planning to launch a new, inexpensive mobile service.
But for all this talk of recovery, it’s important to remember how far Telstra has fallen. And just because it has clawed its way back, and seems to have a decent dividend yield, doesn’t necessarily mean it’s a share worth holding.
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PS: Telstra’s future is still up in the air. Some stocks are never bound to bounce back. Markets & Money Editor Greg Canavan has authored a new investor report explaining why Aussies should avoid Telstra like the plague. To learn more, download your free report here.