What next for Telstra
What next for Telstra? Mobile has been the major driver of Telstra's recent performance. In the five years to 2013 mobile revenues increased by 47% (8% a year), while earnings before interest, tax, depreciation and amortisation rose 86% (13% a year) as the EBITDA margin expanded from 30% to 38%. With about 16m mobile 'services in operation' (SIOs) at 31 Dec 2013, Telstra had 52% of the market compared to 31% for Optus and 17% for Vodafone Hutchison Australia (VHA). By spreading its infrastructure investment over more customers, Telstra delivers a better network and can spread its marketing costs across a bigger base, enabling it to increase market share and earn higher margins. That's no mean feat. But as good as this business is, there are two major problems First, it's extremely capital intensive and second, growth options are limited. Read the full blog post here: (VIEW LINK)
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