Game up or game on for Telstra?

Would Telstra suffer with a change in government?

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

As the nation crawls towards Election Day, Prime Minister Gillard's chances of winning another term don't appear to be improving. The Coalition has made no secret of what it thinks of Labor policies; particularly the National Broadband Network (NBN), the carbon tax, and the minerals resource rent tax (MRRT). Should there be a change in government in September there is little doubt the Coalition will try and alter these policies to some degree.

The Australian newspaper has reported on an interview it conducted with Telstra (ASX: TLS) CEO David Thodey, detailing the CEO's view that the $11 billion agreement signed in relation to the NBN would not be renegotiated should there be a change of government. Thodey was open to discussing logistical aspects of the roll-out but not the $11 billion agreed upon, suggesting that there is little room for the Coalition to meaningfully stop the NBN now that major contracts have been signed.

Any changes to the NBN will of course affect Telstra's competitors, including Optus parent Singtel (ASX: SGT), iiNet (ASX: IIN), and TPG Telecom (ASX: TPM). Given that the NBN should create a more level playing field, in most cases by improving access costs, investors could expect any Coalition back-tracking to be a negative for Telstra's competitors. However, perhaps providing some solace, a recent iiNet presentation at an Investor Conference stated that:

"The NBN (in whatever form) will be better for customers, better for iiNet and better for Australia."

Foolish takeaway

Governments have the power to significantly alter the value of companies through regulation and policy, so it would be Foolish to not stop and consider how a Coalition government may alter the investment landscape for certain industries. As things currently stand, potential alterations to the NBN and MRRT don't look as though they would significant effect Australian firms; however a wind-back of the carbon tax could provide a boost to a number of companies and industries.

The Australian Financial Review says "good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit." Get "3 Stocks for the Great Dividend Boom" in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »