Disgruntled Telstra shareholders say they got a raw deal out of the telco's $1 billion share buyback.
Several small shareholders have argued at the company's annual general meeting that the buyback was not in their best interests, and only benefited large superannuation funds.
Telstra recently bought back more than 217 million shares for $4.60 each, a 14 per cent discount on the market price.
"The major beneficiaries of the buyback were the super funds and pension funds who get the imputation credits because they pay zero tax," one shareholder told the meeting in Brisbane.
Three other shareholders expressed similar concerns, describing the buyback as "unfair."
"None of you people on the board would qualify as small shareholders," Ian Maxwell said.
"So none of you would understand the point of view of small shareholders."
He said most mum and dad shareholders wanted the dividends, or were reinvesting them.
"The last thing small shareholders want is a buyback," Mr Maxwell said.
"All it means is we sacrifice the shares for an illusory return."
But Telstra chair Catherine Livingstone said the buyback was in the best interest of all shareholders.
"Buybacks benefit continuing shareholders in the sense there are fewer shares on issue and therefore the earnings per share goes up and in the long-term that does underpin the share price," she said.
Chief executive David Thodey said the buyback was the best option for franking credit, cash and tax reasons.
"As with any capital management strategy you can't please everybody," he told reporters after the meeting.
He also dismissed his Optus counterpart Paul O'Sullivan's recent call to break up Telstra to increase competition in the telecommunications industry.
"This is not a new message. I think Optus has said that for 10 years. It's nothing new," he said.
Telstra has attracted controversy by asking the competition regulator for compensation for falling demand on its copper network, as the national broadband network increases the migration of customers away from the service.
Telstra's rivals say it's already being compensated through an $11.2 billion deal with NBN Co and the government to rent out its infrastructure to build the broadband network.
However, Mr Thodey said they were different matters, one being the sale of an asset and the other wholesale prices.
He said the company expected continued low single-digit earnings growth as demand for connectivity in Australia and overseas grew.
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