The ACCC has released its draft decision and proposes not to declare a wholesale domestic mobile roaming service. This removes a negative overhang for Telstra, Macquarie observes.
A declaration was always likely to hurt the premium that Telstra is able to charge customers, given the primary driver of this premium comes from its superior network coverage.
Macquarie still believes Telstra faces challenges from broad-based competition across key products. Neutral rating and $4.50 target retained.
Sector: Telecommunication Services.
Target price is $4.50.Current Price is $4.40. Difference: $0.10 – (brackets indicate current price is over target). If TLS meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).