Why Telstra’s Share Price Has Been Declining over the Last 12 Months

Shares of Telstra Corporation Ltd [ASX:TLS] have been declining for the last 12 months. In today’s trading, shares are down 0.54%.

This time last year, Telstra shares were trading at $4.06, now they are trading at $2.75. That’s a decline of 32.2% in only 12 months.

Too much competition for Telstra

Earlier this year, Standard and Poor’s (S&P) global ratings said that Telstra’s strong position in the Australia share market may have been weakened due to its long-term issuer and issue ratings.

The downgrade reflects our view that Telstra’s strong incumbent position within the Australian telecommunications industry has diminished somewhat,’ S&P Global Ratings said.

Competition has intensified across Telstra’s core businesses and the company has had to accept lower margins as a means of protecting its dominant market share.

Growing competition from other mobile networkers is also playing a role in Telstra’s declining share price. Especially with TPG Telecom set to become Australia’s fourth mobile network operator, after large investments and product offers were made.

New challenges demand change for Telstra’s share price, and many of the impacts have been contributed to the NBN, as they are no longer the fixed line provider in Australia, which they say is also driving down wholesales pricing.

Telstra’s future strategy

In Telstra’s strategy update from 20 June, the company said that the strategy would deliver benefits for all key stakeholders, customers, shareholders, and ensure they remain Australia’s premium and most trusted brand in telecommunications.

Regards,

Vern Gowdie,
Editor, Markets & Money

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