The Telstra Corporation Ltd share price is down 17% in 2017

It hasn’t been a great start to the week for the Telstra Corporation Ltd (ASX: TLS) share price.

As the market close approaches, the telco giant’s shares are down almost 2% to $4.22.

This latest decline means that Telstra’s shares have now lost 17% of their value in 2017.

Why have Telstra’s shares fallen?

This decline is largely the result of concerns over weaker-than-expected NBN margins, the decision by TPG Telecom Ltd (ASX: TPM) to launch Australia’s fourth mobile network, and ultimately, the impact these will have on its ability to maintain its current dividend.

Opinion is largely divided on the sustainability of its generous dividend. One broker even warned that it may have to be reduced by 45%.

That would be a big disappointment for shareholders. At the current share price Telstra provides a trailing fully franked 7.3% dividend, which is significantly higher than the market average of 4%.

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Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. The Motley Fool Australia owns shares of Telstra Limited and TPG Telecom Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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