Here’s why you should own Telstra Corporation Ltd shares

Telstra Corporation Ltd’s (ASX:TLS) new e-Health business could be a great earnings generator and make the telecom giant a leader in the healthcare sector.

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Telstra Corporation Ltd (ASX: TLS) is taking its next major step into healthcare by opening its new e-health product, MyCareManager. The telecommunications leader is leveraging its expertise in communications and mobile networking to provide customers a way to have medical consultation services via online video.

GP and healthcare specialists can discuss health issues with patients, as well as monitor and analyse their conditions via high-speed broadband and cloud data applications.

If you’ve ever had the experience of meeting with a medical professional, you would greatly appreciate the time saving and convenience this offers. Regularly, people might have to travel one or two hours to a medical centre. Then they would sit in a waiting room a long while for their appointment, all for a consultation that could last only a short 10-15 minutes possibly.

New e-Health division growing quickly

Telstra’s e-health division has grown with a number of recent acquisitions. In the first half of financial year 2015, Telstra made five acquisitions and investments in e-health companies in its drive to become the leading e-health service provider in Australia.

Already, the division contributed $31.5 million in income in the first half. Telstra has projected this growing business could be one of its biggest revenue generators in five years. It may even rival the growth and earnings of the telecom giant’s network application services (NAS) business for cloud computing and business enterprise solutions.

Recent ventures and acquisitions

In March, Telstra signed a letter of intent with 3D Medical Ltd (ASX: 3DM) to provide medical diagnostic imaging services that allow medical professionals to enable ownership and access to imaging data to improve patient care.

This was followed by Telstra’s $40 million acquisition of Dr Foster, a UK-based software developer for medical administration management.

Telstra’s future growth plan

The rise in demand for healthcare and the development of faster telecommunications gives Telstra the opportunity to become embedded in nationwide healthcare systems. In Telstra’s recent analyst briefing announcement, CEO David Thodey said,”Asia, e-health and software continue to be absolutely key focus areas as we drive out growth, growth for the future, and it is these initiatives that will lay the foundations for growth, we believe, into the next decade.”

The growth in e-health and the business expansion into Asia should help maintain Telstra’s market leader position in tech and telecommunications into the future. That’s why having the stock in your portfolio could generate solid long-term returns. You can benefit from the 4.8% fully franked yield and Telstra’s reputation of being a solid dividend payer.

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Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned.  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 policyThis article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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