Telstra’s hidden riches

Here is what a rotting decline looks like: a decade back, Telstra generated revenues of just under $25 billion and operating profit of just over $10 billion. Nowadays revenues are about the same but operating profit has fallen 40% to $6 billion.

Telstra is a business in decay that continues to pay dividends it can’t afford.

Over the past 10 years, when smart-phones have displaced computers and data consumption has grown exponentially, the country’s largest telecommunications business has gone backwards.

There is no mystery as to why. When a one-time monopolist enters a competitive world, margins and market share tend to fall. Telstra’s business has also changed with the advent of fibre, the decline of copper and the introduction of 5G.