(MENAFN) Telstra shares have dropped after the telco's ratings were downgraded due to intense competition across its core businesses and lower margins.
According to Standard and Poor's (S&P) Global Ratings, Telstra's current position in the industry had been "diminished" and lowered its long-term issuer and issue ratings on the company to A-minus, from A, and the short-term rating to A-2, from A-1.
S&P Global Ratings said: "The downgrade reflects our view that Telstra's strong incumbent position within the Australian telecommunications industry has diminished somewhat, competition has intensified across Telstra's core businesses and the company has had to accept lower margins as a means of protecting its dominant market share."
The ratings agency also said that Telstra's vulnerability to an erosion of its price premium and dominant market share had increased over the past few years, despite elevated network investment.
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