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Telstra silent on FTTN shareholder cash hit

By Jo Best, ZDNet.com.au on February 22nd, 2008

Topics

broadband, cash, fibre to the node, fttn, shareholder, telstra

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Telstra CEO Sol Trujillo has remained tight-lipped on how a fibre-to-the-node build could impact the cash the telco pays to its shareholders.

While the Rudd government has set aside some AU$8 billion to finance the rollout of a high-speed broadband network, Telstra has promised that, should it win the tender to deploy fibre across Australia, it "won't cost the taxpayer a cent", with the telco investing AU$4.1 billion of its own money in the network.

Nevertheless, Trujillo said that the cost of any future fibre rollout has not been factored into Telstra's current financial forecasting.

"The FTTN investment ... I don't know if it will happen or not -- we're not building it into our financial planning at this stage. We're working with government, trying to go through the processes and all that sort of thing," he said at the company's half-yearly results day announcement in Sydney yesterday.

"In terms of the financing and how we think about business, obviously we would be looking at some point, if we were involved and chose to be involved, and were selected, you know, we would have to finance to some extent whatever additional [capital expenditure] would be involved."

However, Trujillo declined to say how the AU$4.1 billion it intends to spend on the rollout would affect the company's dividend to shareholders.

"Would it affect our dividend? That's a decision for board. But I don't think that's a necessary issue for people to be concerned about," he concluded.

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Talkback

Witch hunt

I don't get the point of this story, is it just to have a Telstra related headline that makes room for people to attack them and scare the uninformed?

Has any other company allocated or reserved money for this discussion? It is not even a project yet as no design specification or tenders have been released.

As a shareholder I would be disappointed if the company placed $4.1B, let alone $0.1B in a non-performing location. I am certain that the company would be able to allocate the funds from their ongoing cash flow, via a loan or by lowering of dividends for a short period.

You appear to make it sound the money would be taken out of our pockets but it simply means people will not have the share price drop as much when it goes ex-dividend. Yes some people who hold the shares as an income source or for the relative return (around 6% fully franked per year).

Once the government releases a paper for submissions then I would expect Telstra to place funds in reserve, allocate a budget and / or secure financing.

We are not talking about a Centro type of company, funding will be available if and when required.

NEWS = Not Even a Worthy StoryNEWS = Not Even a Worthy Story February 23rd, 2008
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Billion dollar rip off.

What about a story or two questioning what is happening to the one billion Australian taxpayer dollars that Coonan donated to the Singapore Government to spite Telstra. Better still Senator Conroy get that billion back and donate it to the Australian pensioners.

Sydney LawrenceSydney Lawrence March 2nd, 2008
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