Telstra's real value is anybody's call

Published in the Daily Telegraph, September 2009

Analysts remain divided over the long-term impact on Telstra shares after the Government unveiled plans this week for a dramatic shake-up of the nation's biggest telco.

Stock in Telstra slumped 4.3 per cent to $3.11 on Tuesday, wiping out $1.75 billion in value as investors reacted to news that the company will have to split its retail and wholesale arms.

But the shares regained almost all the lost ground the next day as the market came to grips with the widely expected shift, which the Government hopes will spur greater competition and result in cheaper telephone and internet services.

By yesterday, the stock closed down lc to $3.25 or the same price it finished on the day before the Government announcement.

Chief analyst Dale Gillham of boutique investment company Wealth Within said holding shares in Telstra might not make good investment sense and some investors might have been better off parking their money in a bank account for the past 10 years.

Despite the prospect of a tougher competitive environment, a range of brokers this week maintained their "buy" recommendation for Telstra.

Among them were Royal Bank of Scotland, UBS and Merrill Lynch.’