Why has the Telstra share price lagged the ASX 200 over the past week?

Why have Telstra shares been lagging the ASX 200 index?

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Key points

  • Telstra shares have been suffering over the past week 
  • The telco is even lagging the ASX 200 index 
  • Could news that Telstra's market share is shrinking be affecting its share price? 

It hasn’t been a fantastic start to the trading week this Monday for the Telstra Corporation Ltd (ASX: TLS) share price.

Telstra shares are today trading at $3.94 each, down 0.38% for the day so far. That’s in stark contrast to the S&P/ASX 200 Index (ASX: XJO), which remains in the green today, despite having lost much of its earlier lead.

But Telstra shares haven’t had the best week either. The telco is trailing the ASX 200’s performance over the past five trading days as well. So what’s going on with Telstra? Why have Telstra shares been lagging the broader markets?

Well, it’s not entirely clear. But last week’s news regarding Telstra could have played a role.

Telstra shares stagnate amid sluggish market share news

As we covered on Thursday, there was some bad news out regarding Telstra’s share of the national broadband network (NBN) market. The Australian Competition and Consumer Commission (ACCC) revealed that both Telstra and its fellow internet service provider TPG Telecom Ltd (ASX: TPG) lost market share over the three months to 31 March 2022. Over these three months, Telstra, TPG and the Singtel-owned Optus all lost 0.3% of market share in the provision of NBN services.

Taking this share was a bevvy of smaller telco providers, spearheaded by Aussie Broadband Ltd (ASX: ABB). Aussie Broadband managed to boost its market share by a substantial 0.5%. However, this still leaves the telco aspirant with a total market share of 6.1%. Even though Telstra, TPG and Optus lost some skin, they still command a market share of 43.7%, 23.3% and 13.9% respectively.

Even so, this news wasn’t particularly good for Telstra and its larger rivals. Perhaps it’s no wonder that investors have gone lukewarm on the telco over the past few trading days.

The Telstra share price is now down 6.4% in 2022 so far. Even so, it remains up a pleasing 15.16% over the past 12 months. At the current Telstra share price, this ASX 200 telco has a market capitalisation of $45.83 billion. This gives Telstra shares a trailing dividend yield of 4.05%.

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband Limited. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Aussie Broadband Limited and TPG Telecom Limited. 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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