Down 10% in three weeks, the Telstra Corporation Ltd (ASX: TLS) share price is starting to look pretty good at $4.59, isn’t it? This is the lowest shares have traded in almost 4 years. With a 6.8% dividend that grosses up to nearly 10% once franking credits are included, all Telstra shareholders have to do is sit there, do nothing, and retire rich. Right?

Wrong. In the first half of 2017, Telstra paid out 15.5 cents per share in dividends, but it only earned 14.8 cents per share. Telstra paid shareholders more money than the whole corporation earned in the first half of the year.

That’s not as unusual as it might sound. Several times in the past, Telstra has paid a first half dividend that was bigger than its cash flows, because of the timing of payments that make the company’s earnings stronger in the second half. Yet with earnings falling, capital expenditure on its network rising, and the company seeking to saddle itself with even more debt, one has to wonder if the Telstra dividend dance is coming to an end.

Best case scenario I see them maintaining the dividend for 2017, worst case drop to 28-29 cents pa
Holding since 2012, when the dividend is 28cents and price at 3.8X. I have seen it go up to $6 and drop back to its current price
Hopefully it is not going back to Sol Trujilo era when its share price drop from 7 to 2.8X

Below is an estimation from a long time investors of TLS :-

Here's my downside scenario based on current information.

Earnings in next 4 years:
-20% from NBN partially offset by cost cuts (Telstra's own forecast)
-10% from TPG mobile competition (Share Price attribution this week)

EPS 23c (33c x -30%)
Div 17c (if changed to 75% payout ratio)
PE 11 (just above 2009 low)
Div Yield 9.4% (gross)
Share Price $2.50

I think this is why they are looking at bringing the potential $88b future NBN revenue forward into a new vehicle, it could hit -5% of earnings, but give them a one-off treasure chest to reinvest to offset the above scenario.

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Not very encouraging,...

TLS is 4.04 this morning

Hmm,... ... Some TA fellas said will reach 3.80,....

Anyone started buying TPG shares ?

TPG will need time to grow,... it has a lot of commitments now,... it is the fourth telco now in both SG and AU,.... I heard that the owner is David Teoh,... same nationality as you and I,...

Hmm,... why never done anything for Msia ?

Funny how things turned out - both of my telco ctrs in SG and AU are HIT by this David fella,... both Starhub and Telstra,... what did I do to him in the previous life ?   

TPG will need time to grow,... it has a lot of commitments now,... it is the fourth telco now in both SG and AU,.... I heard that the owner is David Teoh,... same nationality as you and I,...

Hmm,... why never done anything for Msia ?

Funny how things turned out - both of my telco ctrs in SG and AU are HIT by this David fella,... both Starhub and Telstra,... what did I do to him in the previous life ?   

Me too. I also have Starhub. Shall i avoid Singtel also and sell off Starhub ?

How to do in Malaysia? Monopoly here and there.
I avoid starhub after founding out that their dividends are paid via loans and balance sheet not strong (not sustainable). I have faith in Singtel. Singtel is cash rich and have strong balance sheet so no worries for now. Singtel might still have few more juices to squeeze out for few more years until TPG becomes fully operational.

Ha,...   Singtel is hit even worse than I am,... hit on the home turf by TPG and their subsid Optus hit by TPG too in AUS.

BOQ dropped to 11.63 and TLS up to 4.22 this morning.

Time to reload BOQ and let go TLS. Make some profit.