Tesla Jumps on Break-Up

Telstra (TLS:NZX / TLS:ASX)
Shares in Tesltra jumped yesterday after the company announced a major restructure that would split its business into three separate legal entities.
It comes amid speculation the telco is preparing for a bid to take over the National Broadband Network, and pre-empting any concerns that will be raised by the Australian Competition and Consumer Commission (ACCC).

The company plans to split itself into these divisions by December 2021:
InfraCo Fixed: which will look after fixed line assets like ducts, fibre, data centres, subsea cables and exchanges,
InfraCo Towers: mobile towers, which it plans to “monetise over time”,
ServeCo: the radio access network and spectrum assets.

“The proposed restructure is one of the most significant in Telstra’s history and the largest corporate change since privatisation,” said Telstra chief executive Andy Penn. “It will unlock value in the company, improve the returns from the company‚Äôs assets and create further optionality for the future.”

Telstra said, with “the NBN rollout effectively complete”, that it expects to earn (before interest, tax and depreciation) $7.5 million to $8.5 billion by the end of the 2022-23 financial year. While Telstra dominates Australia’s mobile and broadband markets, its mainstay fixed-line business has also been under pressure from the rollout of a state-owned NBN.

By Chas Gunaratne