Shares in Telstra shop operator Vita slumped 30% after the telco said it would slash payments to them

Photo: Torsten Blackwood/AFP/Getty Images

Shares in Vita Group slumped after Telstra cut what it pays the company to operate Telstra stores.

At the close the shares were down 30% to $0.90.

Vita announced its revenue from the big telco would fall because of margin pressures faced by the industry.

Telstra intends to cut remuneration by 10% from July 1 and another 10% at the start of each of the 2019 and 2020 financial years.

Vitra says Telstra also suggested the cuts could be partially mitigated through higher volume, improved mix, increased up-sell and cross-sell opportunities across categories, and from new products such as Smart Home.

Vita CEO Maxine Horne says the company is prepared to partner with Telstra to address broader market challenges.

“We have performed strongly, creating value for Telstra over many years and intend to continue doing so into the future,” Horne says.

“We are concerned about the extent of these changes and are currently addressing these concerns with Telstra.”

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