Telstra Corporation Ltd [ASX: TLS] have been experiencing a falling share price over the past 12 months and yesterday was no exception, dropping a further 2.1%.
Their share price closed at $2.74, down from $2.80 on Monday, 21 May.
Last week Telstra announced a downgrade in their yearly earnings which drove the share price to a six-year low. Although things have gone from bad to worse for the telco giant, the recent network outages resulted in an even further drop.
Why has Telstra’s share price dropped?
As reported by the ABC, this marks the third network outage for Telstra this month alone.
An extract from a Telstra advertisement stated, as reported by the ABC:
‘Telstra has also had to contend with the NBN and the transition to the 5G network.
‘Profits are down, dividends have been slashed and the company shares are trading around a seven year low.
‘With one outage after another, customers are considering going elsewhere.’
Despite their apologies, customers can’t seem to help but lose trust in the company.
Mark Gregory, professor at RMIT University, told the ABC that ‘at the moment you would have to say that Telstra’s network is very flaky’.
How is Telstra responding to the outrage?
Telstra seemed to have nothing but apologies in response to the recent outages. CEO of Telstra, Andrew Penn, told the ABC:
‘One outage is not satisfactory, two is absolutely not acceptable and all I can say is that I apologise.’
Mark Wright, Group Managing Director of Telstra, said:
‘We know lots of people rely on us and we apologise again. We don’t like to let our customers down.’
Despite the negative public sentiment, Telstra are confident as Penn said at JP Morgan’s conference last week, that they have put ‘in place the right investments with the right strategy’ in order to continue to be a leader in the telco industry.
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