Under Siege Telstra Admits They Would Be Happy To Sell Their 35% of Foxtel
Telstra who already own 35% Foxtel and has basically snubbed the TV streaming group after buying struggling archrival Fetch TV, is set to support a proposed sale of the successful streaming operation.
New Telstra chairman Craig Dunn has confirmed he would support a sale of Foxtel, and that the telco would consider paying shareholders a special dividend according to the Australian newspaper which is owned by News Corp who own the other 65% of Foxtel.
His comments came at a fiery Telstra shareholder meeting with shareholders venting their anger at the poor performance of the Company.
“We think that would be a sensible move or decision to make on behalf of shareholders,” he said. “From time to time the importance of certain assets and their contribution to the value proposition we make to our customers does change.”
Some shareholders were concerned that Australia’s mobile network could come under attack from the Chinese government, due to undersea cables near Hong Kong.
Shareholders also focused on why the cost of Telstra’s plans had increased faster than inflation this year, despite being an essential service, and the country currently being in the grips of a cost of living crisis.
“If we are going to keep investing in the network, then from time-to-time we are going to need to make the price changes to give us the confidence to make these investments”, Dunn said.
Under pressure Telstra executives struggled to handle long-term shareholders who unleashed on the national carrier’s board on a range of issues, from security to billing in the midst of the cost of living crisis.
The move to support a sale of their Foxtel shares, comes as Telstra continues to struggle on multiple fronts including in the enterprise market where archrival TPG Telecom is set to benefit from the $5.2 million dollar sale of their fibre network to Vocus.
The move will allow TPG Telecom and Vodafone to attack Telstra in the consumer market while Vocus goes after Telstra’s enterprise customers with new fibre offerings.
News Corp global chief executive Robert Thomson said in August Foxtel’s performance had prompted “third-party interest in a potential transaction” for the streaming-led sports and entertainment company.
Speaking at the company’s annual general meeting on Tuesday, Mr Dunn said the telco understood News Corp was undertaking a strategic view of the business which could lead to a potential sale, which would include Telstra’s 35 per cent stake.
Mr Dunn said Telstra was continuing to focus on its core business and “it’s not clear to us long term that (Foxtel) remains a part of our core business”.
Asked by a shareholder whether that sale would warrant a special dividend for shareholders, Mr Dunn said the telco would consider it as it had in the past.