Minimal change for Telstra share price with either government: Analyst

Telstra's share price won't see much change with or without the NBN

Telstra’s (ASX:TLS) share price will not be significantly affected no matter the outcome of political negotiations, according to an analyst.

RBS, telecommunication analyst, Ian Martin told Computerworld Australia that there wouldn’t be “a big difference” in how Telstra fares if either major party forms government.

“If the ALP win and the NBN goes ahead then it’s got this $9 billion deal that’s got to get through the ACCC and the shareholders, plus another couple of billion in government offsets, if the Coalition won and it didn’t go ahead with the NBN… and Telstra remained as an integrated company… then it’s worth about the same value,” Martin said.

According to Martin, there are issues for both sides which need to be addressed.

If Labor forms government it will need to provide more information on the company it created, USO Co, which was to be responsible for Telstra’s universal service obligations (USO) from 1 July 2012. If it fails to do so and the USO issues remain with the telco, Martin predicts it will make it harder for Telstra shareholders to vote for the deal.

However, if the Liberal Party forms government, to do which it will likely need to allocate more than the proposed $6.3 billion to its broadband policy, there’s the possibility of government provisions to retain the NBN in certain areas and then the prospect of commercial rollout of broadband in city areas. The issue is how much capital Telstra puts in any potential dividend implications.

The Financial Heads of Agreement deal between Telstra and the NBN Co, stipulated the telco was to migrate its voice and broadband customers to NBN Co, while decommissioning its copper network and cable broadband service, potentially giving the NBN Co access to 6 million kilometres worth of Telstra fibre networks.

A Coalition Government has made public its plans to scrap Labor’s proposed NBN and will instead spend up to $6.25 billion of public and private funding on an alternate broadband policy that will see 97 per cent of Australians with a minimum peak speed of 12 megabits per second.

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