Australia's largest telecom firm Telstra said it would cut a quarter of its workforce and flagged asset sales on Wednesday, as competition and new technology crush its mainstay fixed-line businesses and force a strategic reset.
The struggling telco said it would shed 8,000 jobs from a workforce of 32,000 to save A$1 billion (Dh2.71bn), in what unionists said was the biggest single loss of jobs by an Australian company since the collapse of Ansett airline in 2001.
Telstra also forecast lower earnings next year, and said it would separate fixed-line assets it values at A$11bn from the rest of the firm in preparation for a potential demerger or strategic partnership.
The strategy statement was promised in May as the firm's response to sliding earnings and a rapidly changing market, but if it was meant to boost investors' confidence it failed as Telstra's share price sank to a 7-year low following the announcement.
"The million dollar question is whether FY20, FY21 and FY22 are going to remain weak, and nobody's clear on that," said Jason Teh, chief investment officer of Vertium Asset Management.
While Telstra dominates Australia's mobile telephone and broadband markets, profits from traditional fixed-line networks are shrinking as the country rolls out a new broadband network and customers switch to wireless networks crowded with rivals like SingTel's Optus, Vodafone Group and TPG Telecom.
"I think we have to do this ... as an industry we're at a tipping point," Telstra chief executive Andy Penn said in Sydney.
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It was necessary to "disrupt ourselves" in the short-term to ensure long-term growth, he added, referring to a plan to cut fees and charges that would cost about A$500m over three years in lost revenue.
Earnings would fall to between A$8.7bn and A$9.4bn in 2019, excluding restructuring costs of about A$600m. The average forecast of a dozen analysts had been for earnings of A$10.4bn next year, according to Reuters data.
Telstra shares, which have halved under Penn's tenure since May 2015, dropped as much as 7.4 per cent on Wednesday, wiping A$2.6bn from the firm's market capitalisation, while the broader market rose 0.7 per cent.
Telstra has already tried a host of measures to address its falling earnings, from cutting jobs and slashing dividends to expanding into new industries - including a failed foray into a US video platform.
None have worked, as revenue continues to ebb from its legacy businesses and repeated network failures tarnish its image.
The latest round of job cuts would include about a quarter of executive and middle-management jobs, Telstra said.
Telstra also flagged plans to sell A$2bn in assets over the next two years, although it did not provide details.
"Their competitive outlook is based on their infrastructure capacity ... if they start to sell their family jewels to fill the gap, that's actually a negative," said Mathan Somasundaram, Market Portfolio Strategist at stockbroker Blue Ocean Equities.
COMPANY%20PROFILE
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BEETLEJUICE BEETLEJUICE
Starring: Winona Ryder, Michael Keaton, Jenny Ortega
Director: Tim Burton
Rating: 3/5
The specs: 2018 Peugeot 5008
Price, base / as tested: Dh99,900 / Dh134,900
Engine: 1.6-litre turbocharged four-cylinder
Transmission: Six-speed automatic
Power: 165hp @ 6,000rpm
Torque: 240Nm @ 1,400rpm
Fuel economy, combined: 5.8L / 100km
Reading List
Practitioners of mindful eating recommend the following books to get you started:
Savor: Mindful Eating, Mindful Life by Thich Nhat Hanh and Dr Lilian Cheung
How to Eat by Thich Nhat Hanh
The Mindful Diet by Dr Ruth Wolever
Mindful Eating by Dr Jan Bays
How to Raise a Mindful Eaterby Maryann Jacobsen
The Penguin
Starring: Colin Farrell, Cristin Milioti, Rhenzy Feliz
Creator: Lauren LeFranc
Rating: 4/5
COMPANY%20PROFILE
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FA CUP FINAL
Manchester City 6
(D Silva 26', Sterling 38', 81', 87', De Bruyne 61', Jesus 68')
Watford 0
Man of the match: Bernardo Silva (Manchester City)
MATCH INFO
Europa League semi-final, second leg
Atletico Madrid (1) v Arsenal (1)
Where: Wanda Metropolitano
When: Thursday, May 3
Live: On BeIN Sports HD
Killing of Qassem Suleimani
KEY HIGHLIGHTS
Healthcare spending to double to $2.2 trillion rupees
Launched a 641billion-rupee federal health scheme
Allotted 200 billion rupees for the recapitalisation of state-run banks
Around 1.75 trillion rupees allotted for privatisation and stake sales in state-owned assets
UAE%20medallists%20at%20Asian%20Games%202023
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COMPANY%20PROFILE
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How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
Greatest of All Time
Starring: Vijay, Sneha, Prashanth, Prabhu Deva, Mohan
UEFA CHAMPIONS LEAGUE FIXTURES
All kick-off times 10.45pm UAE ( 4 GMT) unless stated
Tuesday
Sevilla v Maribor
Spartak Moscow v Liverpool
Manchester City v Shakhtar Donetsk
Napoli v Feyenoord
Besiktas v RB Leipzig
Monaco v Porto
Apoel Nicosia v Tottenham Hotspur
Borussia Dortmund v Real Madrid
Wednesday
Basel v Benfica
CSKA Moscow Manchester United
Paris Saint-Germain v Bayern Munich
Anderlecht v Celtic
Qarabag v Roma (8pm)
Atletico Madrid v Chelsea
Juventus v Olympiakos
Sporting Lisbon v Barcelona
COMPANY%20PROFILE%20
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The specs
Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now
COMPANY%20PROFILE%20
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How Alia's experiment will help humans get to Mars
Alia’s winning experiment examined how genes might change under the stresses caused by being in space, such as cosmic radiation and microgravity.
Her samples were placed in a machine on board the International Space Station. called a miniPCR thermal cycler, which can copy DNA multiple times.
After the samples were examined on return to Earth, scientists were able to successfully detect changes caused by being in space in the way DNA transmits instructions through proteins and other molecules in living organisms.
Although Alia’s samples were taken from nematode worms, the results have much bigger long term applications, especially for human space flight and long term missions, such as to Mars.
It also means that the first DNA experiments using human genomes can now be carried out on the ISS.
ENGLAND SQUAD
Joe Root (captain), Dom Sibley, Rory Burns, Dan Lawrence, Ben Stokes, Ollie Pope, Ben Foakes (wicketkeeper), Moeen Ali, Olly Stone, Chris Woakes, Jack Leach, Stuart Broad
MATCH INFO
Rugby World Cup (all times UAE)
Final: England v South Africa, Saturday, 1pm
TRAP
Starring: Josh Hartnett, Saleka Shyamalan, Ariel Donaghue
Director: M Night Shyamalan
Rating: 3/5
MATCH INFO
Uefa Champions League, Group B
Barcelona v Inter Milan
Camp Nou, Barcelona
Wednesday, 11pm (UAE)
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5
COMPANY%20PROFILE
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