Telstra (TLS) is a provider of telecommunications and information products and services, arguably Australia’s dominant telco company.  TLS has also long considered among the market’s blue chip stocks.

Its principal activities are the provision of telephone lines; national local, and long distance, and international telephone calls; mobile telecommunications; data; internet and on-line; wholesale; telephone directories; and pay TV.

TLS has been one of the shares to sell almost since the T2 float, independent of economic conditions, as customers have been shifting away from spending on landline products.

On 26 November, the Australian Senate has passed a bill to split TLS into separate retail and wholesale networks.

TLS will be required to give up parts of its existing copper-wire network in order to make way for the rollout of a fibre-optic network.  In return, the group will receive $11 billion in compensation.

CEO, David Thodey, said the compensation will be used to help fund acquisitions, pay down debt and/or initiate a share-buyback.

The bill will now head to the lower house for final approval.

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