Telsyte Equites Research Report - 1st Report - Telstra

This report series leverages Telsyte' s parent organisation, Gibson Quai-AAS strategic consulting capabilities in the telecommunication space. Telsyte introduces an equities research report designed to increase our value proposition by assisting broking houses/institutions with specialist, in-depth analytical information within the telecommunications sector. The first report is focused on Telstra.

Telstra is Australia' s incumbent telecommunication carrier. It was partly privatised in 1997 and fully privatised in 2006. Telstra is one of the country' s largest listed companies. The company has strong brand recognition and provides a broad range of telecommunications and information services. Telstra has generally outperformed international peers despite strong regulatory pressures.

Telstra is in a dominant position operating in an increasingly competitive market. It benefits from having a broad base of high-value customers and leveraging its huge economies of scale; it delivers its products cost effectively. Further, it has a focused management team, strong cash flows and has effectively pursued a number of growth opportunities, including its 3G 850 MHz wireless mobile and broadband network investments. Telstra has capitalised on being the first mover in these high growth segments.

• Only fully Integrated Telco player
• Strong market share in all sectors
• Strong stable cash flow and balance sheet strength

• Economies of scale and scope
• Strong focus on Innovation
• Proven track record
• Executing transformation plan

Total Telstra Market Share: 51% in 2006 to 53% in 2007)

Telstra continues to win in the key markets - 3G mobiles, broadband, directories and has managed to stem the PSTN decline, albeit temporarily- despite strong competition.