Outage Outrage: Telstra Can’t Keep Customers or Shareholders Happy

Telstra's reputation for network quality might be coming to an end. There have been seven outages since February this year. One can only speculate as to what has gone wrong. But what is so surprising is that Telstra spends so much money on its network. At its annual result this Thursday, Telstra is expected to announce that it has forked out approximately $4.2 billion in capex. This equates to 15% of sales, above the global telco average. What's even more surprising is that this year's capex represents a step-up from what it used to spend. For years, Telstra's capex was remarkably consistent at 14% of sales, dipping slightly below this in 2014. There could be several reasons why Telstra spends more capex per dollar of sales than global peers. Perhaps it's attributable to Australia's geographic size and sparse population. Perhaps Telstra's network is older. Whatever the reason, high capex surprisingly hasn't translated into a reliable network. Should this continue, Telstra's key competitive advantage will be lost and its pricing power will likely disappear with it. Read the full blogpost (VIEW LINK)