Telstra Corporation Ltd holds its AGM: Here's what you missed

The Telstra Corporation Ltd (ASX:TLS) share price is heading higher on the day of its annual general meeting. Here's what you need to know…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In late morning trade the Telstra Corporation Ltd (ASX: TLS) share price is marginally higher at $3.57 on the day of its annual general meeting.

Here are a few key takeaways from the AGM:

  • Last year over 5000 petabytes of data travelled over Telstra's fixed and mobile networks each day, a 40% increase year-on-year.
  • Telstra has a 52% share of the NBN market, but competes with 180 resellers.
  • The company sees TPG Telecom Ltd (ASX: TPM) as a formidable competitor in the mobile market.
  • Reaffirmed that its total dividend in FY 2018 is expected to be 22 cents per share, fully franked.
  • Aims to grow the business by delivering better customer experiences, driving further value from its core business, and by building new growth businesses close to its core.

Overall I felt today's AGM speech from Chairman John Mullen was both honest and encouraging. I agree with his view that although Telstra is facing huge challenges, the company has the talent, resources, and know-how to prosper.

As mentioned above, the company has a plan in place to attempt to offset the $3 billion gap in its earnings that it will face when the NBN rollout is complete.

Each day the company handles 135,000 calls to its customer services team. If these can be cut down significantly through self-serve options, then there certainly is a huge opportunity for the company to reduce its costs significantly.

Its current productivity program has already taken $250 million of underlying core fixed cost out of the business this year and is on track to deliver $1.5 billion of annual savings.

In terms of growth, as well as its core business, management believes that the arrival of 5G internet will create growth opportunities in untapped areas such as driverless cars, drones, connected homes, artificial Intelligence, machine learning, smart cities, and smart agriculture.

This market is estimated to be worth up to $5 billion in five years and I believe Telstra and its world-class network is in pole position to profit from it.

Should you invest?

While it will undoubtedly take time for Telstra to profit from its new growth opportunities, I believe that its new dividend policy will allow it to at least maintain its 22 cents per share dividend for the next three years.

Because of this yield, I think Telstra could be well worth considering as an investment for income investors. After all, with its shares down sharply this year, I feel there is far more upside potential than downside risk at the current share price.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Telstra Limited and TPG Telecom 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 Bruce Jackson.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »