Giant losses and looming trouble for Australia’s biggest telco

Giant losses and looming trouble for Australia's biggest telco
Photo by Life Of Pix, Pixabay

Telstra is the biggest telco in all of Australia. Everyone knows its name and everyone knows the rules that it must follow in providing most of Australia with communications services, but recently with the rise of new services the company has started to experience some losses.

A company that is so large and has been a staple in Australia for so many years has begun to lose more and more money each year. In just three years their share prices have halved. It is a big worry for investors and senior executives at the company.

The company has been trying to cut costs. In 2017 they cut 1,400 jobs, which cut $1.5 billion, however it looks like they are going to possibly be cutting even more with another 1,400 targeted in the financial year of 2018. Some people worry that the redundancies are the company showing its weakness and that it proves that the company is just a slowly dying elder of yesteryear.

However, the company is determined to prove that it is still the Telco King. However, they’ve also lost $36 Billion in the last three years making it even more important that they pull themselves back up and figure out a new strategy.

One of the issues is, of course, mobile phones. The problem with this  is  that the number of customers that can be brought into the company relies heavily on the population and with so many other Telcos now in the business it creates even a finite more amount of people that they can go and put on plans.

This means that the company must focus on the ever-growing market of the internet where it has seen some decent numbers. The upside of the NBN rollout has been a new audience for their services along with customers disconnecting earlier plans and paying an exit fee to get onto an NBN service, allowing the telco to generate some extra revenue.

This, however, is a new area in which the company must work hard to dominate the market. With newer companies starting to push into the market it gives Telstra some incentive to re-establish it’s dominance in the industry. The question on everyone’s mind now however is whether or not the grandfather of all the Telcos will pull through this year, because it is vital that they start seeing some gains. Without it, the company could end up back where it started at the beginning of the year.