Telstra’s share price has soared recently, rising 11% since 9 Aug 12 (Hold – $3.89). It’s now well clear of our $4.00 ‘Sell’ recommendation, but we’re not going to downgrade. Telstra has been winning new customers and fielding fewer complaints – tangible evidence that it is adapting to become a more nimble retail-focused business. Business processes are also being simplified, saving the company $1.6bn.
Still, success is not guaranteed. Telstra Pt 1: Five major challenges (Hold – $3.54) detailed significant industry headwinds that even Telstra will struggle to overcome: converging technology and falling data prices. These trends continue.