Telstra’s Share Price Slips on Unanswered 000 Calls

Shares of Telstra Corporation Limited [ASX:TLS] have slipped further this morning after accepting blame for the nationwide outage on 4 May, 2017 that resulted in 1,433 unanswered emergency calls.

The telco giant has spent a lot of time in the spotlight over the past 12 months, with the introduction of the 2022 strategy, mass job cuts and the recent pay dispute. It’s safe to say no Telstra shareholder is jumping with joy.

At time of writing, Telstra shares are trading at $3.15 — a 52.4% loss from its August 2015 peak.

Our analyst, Greg Canavan, believes Aussie investors should avoid Telstra shares at all costs, find out why here.

Telstra accepts the blame of disrupted emergency calls

As reported by ABC, an investigation conducted by ACMA found that as a result of the outage on May 4, 1,433 calls were not connected to an operator.

ACMA labelled this the ‘most serious’ disruption to Australia’s triple-zero service since being introduced.

Emergency calls weren’t the only major concern of the outage, traffic lights in Victoria were affected, along with other phone services and EFTPOS machines.

The outage was a result of a transmission failure at a Telstra exchange, a fire in a Telstra pit and a software fault.

Telstra’s response to the issue

As reported by ABC, Telstra’s executive of regulatory affairs, Jane van Beelen, said that the company takes its responsibility as the service provider for triple-zero ‘extremely seriously’.

One failed call to triple zero is one too many and we apologise for what occurred.

ACMA determined that no one was seriously impacted by the outage and that there were no adverse implications for anyone in trouble at the time of the outage.

Since the issue has surfaced, Telstra has announced that they will implement further redundancy measures, including software and infrastructure upgrades as well as improved monitoring and fault detection. In addition to working with emergency service operators to develop a plan and prepare for future outages.

How will this affect Telstra?

Again, you have to commend Telstra on its crisis handling. They have been quick, professional and somewhat compassionate. Although, with everything else going on with the company, it’s hard to say whether it will be enough for shareholders.

With how far Telstra has fallen, there’s little doubt that this will have a negative effect on the company’s recovery process and subsequently its share price.

Who knows when things will make a turn for Telstra, perhaps now is not the best time to be a Telstra shareholder.

Regards,

Ryan Clarkson-Ledward,
For Markets & Money

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.


Ryan Clarkson-Ledward is a junior analyst for Markets & Money. Ryan has degrees in both communication and international business. His priority is bringing you the latest price updates on stocks through ASX updates, as well as supporting Sam Volkering with background research. As part of the team at Markets & Money his aim is to provide unbiased and relevant news for readers. Ryan’s work with Sam is designed to provide research that complements Sam’s analysis for small-cap and technology stocks. Together, their objective is to break through all the jargon and give you the hard facts to inform your investment decision-making. Ryan writes for:


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