Telstra to delist in NZ as investor numbers shrink across the Tasman

The revenue-squeezed telecommunications giant has made a big call concerning the stock exchange as part of a radical plan to improve its finances.

Telstra will delist from New Zealand’s stock exchange as part of its bigger plan to simplify the business and reduce costs, with the telecommunications giant expecting this financial year will be a turning point for the company.

Telstra announced on Friday it had decided to delist from NZX Ltd at the close of business on June 16 and then move to a sole listing on the Australian Securities Exchange, saying its Kiwi shareholders have been reducing over time.

“Given the accessibility of the ASX to New Zealand-based shareholders, Telstra considers that delisting is an appropriate step,” the telco said.

Telstra said it was part of its move to simplify administration and streamline its shareholder services.

Investors who hold Telstra shares on the NZX will automatically be transferred to the ASX.

Earlier this week, the company provided an update on its plan to split the business into four entities, largely to better realise the value of its infrastructure assets.

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A recommendation from an independent expert is expected to be released in early September.

If the plan goes ahead, completion is anticipated by December, Telstra says.

Moody’s Investors Service noted on Thursday that Telstra’s plan to slash debt was necessary to compensate for the earnings gap created by reduced retail margins and the loss of its regulated wholesale earnings stream during the national broadband network rollout.

In its response to NBN Co’s call for feedback on its latest two-year pricing plan, Telstra was highly critical in its commentary released on Thursday.

Telstra said the broadband wholesaler was already charging retail service providers too much and its new pricing proposal would result in NBN Co “taking a higher share of industry revenues, ultimately to the detriment of home and business broadband users”.

“As NBN Co is aware, margins on our entry-level NBN plans are already unsustainable at the current wholesale charge of $22.50,” Telstra said.

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“To enable RSPs to sustainably offer an affordable broadband product for low-income customers, the cost … would need to be closer to $10.”

Telstra shares have swung wildly in the past 12 months, hitting about $3.50 in July and plunging to less than $2.70 in October before the company unveiled the restructure plan.

Investors responded positively to the delisting announcement on Friday, lifting the stock by 3 per cent to $3.43 in intraday trade.

Telstra last month booked a 2.2 per cent dip in half-year profit after revenue sank almost 10 per cent.