Telstra is a mess with the Company struggling to convince consumers to buy premium 5G smartphones due in part to a very patchy Telstra 5G network, they have also struggled to compete in an NBN world with business now buying direct from the NBN Company.
In the handsets market consumers are heading to JB Hi Fi who happens to be Telstra’s biggest reseller and in the 5G market Telstra is far from being a dominant player similar to what they were in the 4G market when Sol Trujillo built out the network that delivered growth for the network.
Current CEO Andy Penn who is trying to build his profile during the COVID-19 epidemic with pictures of himself with a pair of dogs has resorted to sacking thousands of staff to cut costs with little on the radar in the form of new initiatives.
During the past three years the Company has failed in the SmartHouse market, the health market and in the delivery of cloud-based apps for business.
The Australian Financial Review claimed that for the best part of a decade Telstra has watched the NBN gradually pick off its wholesale fixed-line customers as the forced migration from copper to fibre unfolds.
Analysts looking to mobile earnings, particularly from the largely untested 5G technology, to fill that gap, but that’s a long and uncertain game
The result: In 2016, Telstra was making more than 40 per cent margins from its fixed-line business. In fiscal 2020, that fell to a minuscule 1.8 per cent, dragging profit down 14.4 per cent to $1.84 billion.
Telstra is making almost nothing out of fixed line, leaving mobile – which has problems of its own as the only area where Telstra could make money.
Even in this space Telstra has limited smartphone ranging with several brands such as Motorola and TCL Mobile products not ranged with some several brands telling ChannelNews that the cost of doing business with Telstra is “excessive”.
Analysts claim that COVID-19 took a $200 million chunk out of its 2020 earnings, with another $400 million predicted this year.
To keep paying dividends Telstra must have annual earnings of between $7.5 billion and $8.5 billion. This year it is expecting earnings to be well under that.
What Telstra needs is a new management team and a strong 5G network.
During testing in Port Macquarie which is a small costal destination that Telstra boasts has 5G we were only able to get less than 10Mbps on a Telstra 5G SIM and a top end Samsung mobile.
In Inner city Sydney we have also struggled to get the speeds that Telstra is bragging about for their 5G Network.
Last week their broadband network across Australia was down for several hours.