The S&P/ASX 200 Index (ASX: XJO) is having a pretty decent start to the week. At the time of writing, the ASX 200 is up 0.3% to 7,032 points. But one ASX share that isn't contributing to this rise is Telstra Corporation Ltd (ASX: TLS). Telstra shares have gone backwards today, down 0.58% to $3.43 a share. At this level, the ASX telco is now down more than 3% from the new 52-week high that it reached back on 5 May. In saying that, the Telstra share price is still up around 14% year to date, so shareholders can't complain too much.
Even so, it does beg the question: why is Telstra falling today when the ASX 200 is rising?
Well, one possible reason could be a squabble over the National Broadband Network (NBN). According to a report in the Australian Financial Review (AFR), the NBN has called an "emergency meeting" today with internet providers. These include Telstra, as well as the Singtel-owned Optus, Vocus Group Ltd (ASX: VOC), and TPG Telecom Ltd (ASX: TPG). The report calls this meeting an "attempt to appease growing anger… about problems that have worsened due to a bungled change to a new field operations model and work scheduling system". The resellers also accused the NBN of harming their brands through poor customer service standards.
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Telstra's NBN troubles
The report also outlines accusations that there are "constant problems" with NBN connections that use the HFC (Hybrid Fibre Coaxial) cable network to provide service. NBN has stated that a COVID-induced shortage of chips needed for modems is to blame. But the report quotes Optus vice president Andrew Sheridan, who dismisses these claims:
It has known for the last ten years that it needed to move all of these customers onto the cable platform, so for them to just say 'Oh we've hit trouble with supply of chipsets' is not good… It is just leading to terrible customer experiences, because there are some people who cannot connect to broadband, and there are no alternative options available. Then we are the ones that take the reputational hit with customers and get the complaints to the ombudsman.
Telstra has voiced similar concerns.
This could be behind the source of investors disquiet over Telstra today. It's not just Telstra shares either. Both the Vocus and TPG share prices have also taken hits today, which indicates that it is indeed a sector-wide sell-off going on.
Shareholders might be frustrated with these developments, seeing as it doesn't look like it's a problem that was caused, or can be fixed by, the telcos themselves. But that's the way the cookie sometimes crumbles in this space. At the current share price, Telstra has a market capitalisation of $40.85 billion.
