Telstra Group Ltd (ASX: TLS) shares are marching higher again today in what's shaping up to be the third consecutive day of gains for the S&P/ASX 200 Index (ASX: XJO) telco.
Shares closed up 1.3% yesterday, likely buoyed by the massive network outage experienced by rival Optus, which services some 10 million Aussie customers. At the time of writing, Telstra shares are up 1.0%, trading for $3.96 apiece.
Shares in Optus' owner Singapore Telecommunications Ltd (SGX: Z74), commonly known as Singtel, went the other way, sliding 4.8% on the Singapore exchange.
What's happening with Optus services?
The tailwinds for Telstra shares and headwinds for Singtel began early Tuesday morning when most Aussies were still tucked in bed.
The Optus network glitch impacted millions of private and corporate customers, unable to use their phones or connect to the internet.
Late in the afternoon, the telco reported that it had restored services, having identified "very technical" issues as causing the problem.
"We have restored the network. What I can say is it's a very technical network engineering issue, and we are going to be doing a thorough root cause analysis," CEO Kelly Bayer Rosmarin said.
Beyond analysing the root cause of the outage, Optus also looks to have some significant brand image repair work ahead to prevent Telstra from taking an even bigger share of the Aussie telco market.
Can Telstra shares benefit from the Optus outage?
Some vocal critics have emerged over the way Optus has handled the fallout from the outage to date. A clumsy early response that could benefit Telstra shares.
Among them, Australian Chamber of Commerce and Industry CEO Andrew McKellar, who labelled the company's communications with its clients in the wake of the network failure a "clown show".
According to McKellar (quoted by The Australian):
Without internet connectivity, many businesses weren't able to receive or process payments, weren't able to trade, and therefore weren't able to open…
Optus has more than 400,000 business customers and the flow-on effects to the Australian economy will be massive.
McKellar said small business customers should receive some compensation for what for many meant a day without trade.
"I think it has been a fiasco from that point of view, and clearly, this is a major issue that Optus has to respond appropriately to, particularly for those smaller customers," he said.
Oliver Freedman, managing director at RepTrak, noted it could take two years for Optus to rebuild its reputation and regain customer trust, particularly as the company is still recovering from last year's damaging cyberattack.
According to Freedman:
The Optus breach had a substantial and significant impact on its reputation just around this time last year. Optus's reputation has slowly recovered over this calendar year, but it is not back to the level it was before, at least according to our data.
So, can Telstra shares cash in amid the latest woes at Optus?
Well, yes. If it can win over customers who opt to change providers after suffering through Wednesday's outage.
As Motley Fool analyst Tristan Harrison noted, "It's not just individuals affected by this – large entities are being impacted."
And it's those large entities that could potentially provide a tailwind for Telstra shares.
"If Telstra is able to pick up some of these enterprises, then it could be a material boost to the corporate-focused side of the business," Harrison said.
