Telstra restructures wholesale business unit

Telstra has announced changes to its Infrastructure Services & Wholesale business unit as part of a drive to cut costs and grow revenues.

The cost-cutting exercises follow a profit warning by the company prior to the release of its full-year results on August 29.

Telstra shocked investors by slashing its forecasts for full-year earnings growth by half. It warned that revenue growth would slow to about 3 per cent and earnings before interest and tax to approximately 5 per cent.

Telstra Infrastructure Services and Wholesale group managing director Gerry Moriarty said today the business unit changes are designed to improve service, reduce costs, strengthen technological leadership and grow revenues.

Moriarty said the business unit will be split into seven different lines of business. The model will better equip IS&W to deliver on the needs of its internal and external retail business customers, he said.

The restructuring will be implemented progressively and completed by July 30. Telstra's business lines include:

* The Service Operations business, which brings service management for Telstra's products and services into one entity. The business will be responsible for delivery on Telstra's entire deployed fixed network, mobile and online products and platforms.

* The Wireline & Wireless business, which will be one of Telstra's two mainstream infrastructure development and planning groups. "It will be accountable for lifecycle management and planning for all our wireline and wireless connectivity-specific products and platforms," Moriarty said.

* The Hosting & Internet business, Telstra's second infrastructure group, which will be responsible for end-to-end accountability and management of the online and internet products and platforms. Moriarty said both of these infrastructure development and planning groups will have significant embedded technology capability. They will bring Telstra developers, planners and builders together to better align them with customers' product needs.

The other lines are:

* The Technology and Research business, which will reconfigure Telstra's research capability as a consolidated centre of excellence for technological innovation.

* The Telstra Wholesale business, which will remain unchanged.

* The Strategy and Business Development business, which will lead development of the IS&W strategy and business plan, integrating IS&W's commercial and technological expertise.

* The Technology Consultancy business, which will leverage Telstra's technology and support international growth opportunities.

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