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Telstra Tipped To Slash Dividend Over Credit Pressure

UBS analysts forecast Telstra will slash its dividend – from 22 cents to 14 cents – following falling revenues and increased competition, coupled with its third network outage this month.

Shares in Telstra dived to seven year low of $2.80 yesterday.

The telco blames software faults for its recent network outage. Patches are scheduled to be put in place.

Last week, Telstra announced its expects full-year EBITDA to be in the “bottom end” of its $10.1 billion – $10.6 billion forecast, citing margin pressure and “challenging trading conditions”.

Despite this, the telco re-affirmed its pledge to a 22 cent dividend.

As per The Australian, USB analysts have today forecast the telco’s 22 cent dividend payout is at risk.

UBS analyst, Eric Choi, states there’s a chance the telco’s credit rating could be dropped from A to A-.

To facilitate the lower rating, Mr Choi claims a revised dividend payout is necessary.

The news increases pressure on Telstra Chief, Andy Penn, as the telco continues to face market pressure.

Shares in Telstra are currently trading 2.5% lower to $2.73.

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