Telstra: Pricing Adjustments to Post-Paid Plans Point to a More Benign Competitive Environment

Ahead of a management briefing in late May, which will focus solely on Telstra Corporation's mobile business, we outline recent pricing trends and our market share expectations for the division. Broadly, we believe the competitive environment in the retail mobile market is improving. For almost 12 months there appears to have been a gradual reduction in handset subsidies by all three network operators. Although carriers have been broadly increasing data allowances on post-paid plans, voice pricing has been relatively stable, even increasing in some lower-value segments. Although we note that exact charges are difficult to compare given changes to headline price points. On a stand-alone basis, we expect plan and subsidy adjustment to be positive for Telstra mobile margins, although a full earnings period benefit may not emerge for 12 to 24 months.