MENU

Thodey: Telstra is ‘perfectly ok’

Telstra (ASX: TLS) chief David Thodey has said the copper wires long used by the company are good to go for another 100 years.

Mr Thodey’s words come at an interesting time for both the company and the government. As the NBNCo and Telstra begin to roll out a new fibre optic network, the labour government is battling to stay in power past September but Thodey’s words seem to be adjusting to the likelihood of a coalition government in office.

If the coalition does get into power, it will most likely change the rollout of the project and create ‘cabinets’ on street corners. These cabinets provide the connection from high speed fibre optic cables to houses with broadband via the existing copper wires.

The words are a stark turnaround from only a decade ago when Telstra described the copper network as “five minutes to midnight” and more recently when communications minister Stephen Conroy said it was “ageing” and “decaying”. It seems Telstra is preparing itself for the change, but if the coalition tries to alter the multi-billion dollar agreement Telstra has with the government, it will require a whole new negotiation.

Despite Telstra’s ‘irrelevant’ discovery of asbestos-laden pits and ducts that need to be replaced before the network can continue its rollout, it will be hoping the fibre optic network continues, although at this point it seems unlikely. This will also be good for other companies like TPG Telecom (ASX: TPM) and iiNet (ASX: IIN) who will also be able to connect households to internet speeds of up to 1 gigabit per second.

Foolish takeaway

Telstra is one stock that investors have relied upon for growth, income and security in recent years and you can see why. Despite having a market cap of $56 billion, new projects in the pipeline are only a good thing for the telecommunications giant and with a renowned fully franked dividend, investors could do much worse.

In the market for high yielding ASX shares? 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


Motley Fool contributor Owen Raszkiewicz does not own shares in any of the companies mentioned in this article.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.