Assignment_FINM1415_Team121.pdf - FINM1415 Group Project Team 121 Q1 Telstra is the largest and most competitive Australian telecommunications industry

Assignment_FINM1415_Team121.pdf - FINM1415 Group Project...

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FINM1415 Group Project Team 121 Q1. Telstra is the largest and most competitive Australian telecommunications industry nowadays. Ranked 9th among 2000 Australian companies with a market capitalization of 39.96 billion. Most of the company's revenue comes from providing comprehensive domestic and international telecommunications, data and directory services (IBISWorld, 2018). Strength: The numerous strengths of this company are observed by their highly competitive advantage, in particular their strong contribution network, cheaper cost basis, and its successful product innovation. Particularly, the growing demand for core products and services made telecommunications networks become the most important pieces of infrastructure in the world today. Weakness: As for Telstra, their digital platforms were not big enough so they need to build up new digital platforms which can enable the simplification of their business. Besides, they need more investments in new technology as they put major money in the long term technological design and its development, such as 5G program. Meantime, their financial report is not done so property and efficiently. Opportunities: As 80% of Australian now having access to an internet connection (A.Soo, 2014) , suggests that would be more attractive to invite new customers into their company. At the same time, more users will provide a huge amount of statistical data as the new trends of customer profile will help to open up a new market to Telstra. Threats: Telstra are facing three major threats in overall operation. Initially, the intense competition shifting dynamics of market and customer expectations different from the past. Secondly, the nbn TM network is the core difficulty problem that needs to be overcome by reducing margins of reseller because of wholesaler s increasing price. Due to the development of Australian economy, customers start to switch on smaller and cheaper options providers such as TPG, the threats from new entrants thereby is risen. Q2. According to financial report of 2018, the EBIT was $5651m and it was assumed that effective tax rate was 30.83%. Then the depreciation including amortization was $4,470m and the total capital expenditure including investments was $5,070m. The changes in net working capital from 2017 to 2018 that was $442m. (FY18-FY17=- 1297-(-1739) =$442M) (refer to appendix 1.0-1.4)
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