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What you need to know about the Telstra AGM

In morning trade the Telstra Corporation Ltd (ASX: TLS) share price has edged lower ahead of its annual general meeting in Melbourne.

At the time of writing the telco giant’s shares are down 0.5% to $3.49.

Has Telstra announced anything?

Ahead of the event, the company released its chairman’s speech to the share market.

Chairman John Mullen began by reminding shareholders of the work the company is undertaking to transform its business through the T22 strategy.

He said: “it is our belief that the T22 transformation that Telstra is undertaking is the most radical and ambitious being undertaken by any telecommunications company in the world today.”

The chairman named a few highlights from its progress thus far, such as the reduction of more than 1,800 Consumer and Small Business plans to just 20 in market plans.

Another highlight has been a reduction in inbound calls to its contact centres by more than 15 million a year. The company doesn’t plan to stop there, though. It aims to reduce these calls by a further 16 million by 2022. Combined, this will be a reduction of 31 million calls or two-thirds of its total.

This has helped Telstra reduce its total costs by $1.2 billion since FY 2016. A further $630 million is being targeted this year, meaning it is on track to achieve its $2.5 billion annual reduction in underlying fixed costs by FY 2022.

Telstra’s chairman used his speech to took aim at NBN wholesale prices. He said: “When Telstra was the regulated wholesale provider to the industry, Telstra charged an average of approximately $20 per user per month. The NBN is now charging some $44 per month on average and the NBN states its ambition is to get this to $49 in FY23.”

Mullen warned: “The bottom line of this is that Australia already has some of the highest wholesale broadband pricing in the world, and if this trend continues, over time most resellers of the NBN will withdraw or go broke.”

He suggested the NBN reduce its wholesale prices so that “reselling the NBN would be profitable” and result in a “dynamic and competitive broadband industry.”

FY 2020 guidance.

Pleasingly, Telstra’s CEO, Andy Penn, re-confirmed the company’s guidance for the 2020 financial year.

Total income is expected in the range of $25.3 billion to $27.3 billion, underlying EBITDA will be in the range of $7.4 billion to $7.9 billion, and free cashflow after operating lease payments will be in the range of $3.3 billion to $3.8 billion.

Overall, I thought this was a solid update and continue to believe that Telstra would be a great option for income investors along with these top dividend shares.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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 Scott Phillips.

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