The Telstra Corporation Ltd (ASX: TLS) share price has slumped lower in 2020 but where is it headed in the next year?
What's been happening with Telstra in 2020?
It's been a bit of a rollercoaster for Telstra shareholders in recent years.
In fact, the Aussie telco's share price has shed over 48% in the last 5 years including nearly 10% this year. However, the S&P/ASX 200 Index (ASX: XJO) is down 11.58%, at the time of writing. This means Telstra is actually outperforming right now.
Notwithstanding, the recent share price falls are largely as a result of increased competition from NBN Co which has hit Telstra's earnings hard.
Telstra has also changed its dividend policy in recent periods. This comes after having famously paid out close to 100% of profits throughout the 2000s.
This change, along with the coronavirus pandemic, has spooked investors and sent the Telstra share price tumbling. That means the Aussie telco could be in the buy zone at $3.22 per share.
I think the current climate could accelerate Telstra's transformation plans. The Telstra 2022 strategy was designed to slash costs and make Telstra into a more focused, efficient telco.
While COVID-19 has thrown a spanner in the works for those plans, Telstra services are still in high demand. More workers at home is increasing the need for mobile infrastructure and stronger networks.
That's good news for Telstra and could help maintain earnings when August rolls around.
Will the Telstra share price climb higher?
The Telstra share price is sitting at $3.22 per share which is a far cry from its 52-week high of $4.01. Things are clearly different compared to the start of the year but Telstra is still a strong ASX dividend share with a current yield of 3.15%.
No one knows exactly where the telco's share price will be in the next 12 months. I think the 5G network is the key to the telco's success over the medium to long-term.
If Telstra can corner the market with this, its share price could be on the rise by May 2021. However, there's still strong competition and a challenging market which means there's plenty of uncertainty ahead this year.
Foolish takeaway
I think the Telstra share price could outperform the S&P/ASX 200 Index in 2020 and continue to be a strong dividend share next year.
