Telstra transformation strategy achieving results: Thodey

NBN negotiations remain "crtically important"

Telstra’s transformation strategy is beginning to see early signs of success, according to the telco’s chief executive, David Thodey.

Read more on Telstra's 2010 AGM

Speaking at the company’s annual general meeting (AGM), Thodey said in the last 12-15 months Telstra had managed to regain market momentum, gained operational stability in its IT systems and achieved a draft NBN heads of agreement.

“I am pleased to report that we are starting to see the early signs of our strategy working – with strong growth in our customer base and some early data that indicates our customers are experiencing an improvement in services … though we still have a long way to go,” he said.

According to Thodey, while public switched telephone network (PSTN) revenues continued to decline, the company’s efforts at creating revenue streams from new products and services were delivering returns.

By way of example, the chief executive said Telstra’s T-Hub and T-Box offerings had shifted some 93,000 units in the September quarter compared to 23,0000 in the June quarter.

The company had also signed on 41,000 new pre-paid users, 116,000 post-paid users, 59,000 broadband customers and 251,000 wireless broadband customers over the same period.

Detailing financial performance for the current half-year, Thodey said the results would show higher customer numbers, a low double-digit decline in EBITDA as a result of increased redundancy costs in the first half of the calendar year, and as a result of the change in recognition of revenue from the Sydney Yellow Pages from the first half to the second half.

“We are focused on making sure that we generate value from the investments we are making this year,” he said. “While this is a significant investment of nearly a billion dollars, we have made clear that we will see the benefits in terms of improved financial performance from 2012.”

NBN negotiations also remained “critically important,” Thodey said.

“We are keen to see negotiations move forward as quickly as possible with the Government and NBN,” he said. “We are very clear on what is required to conclude these negotiations so that we can bring this proposal back to you for a decision.

“One of the very important benefits of concluding the NBN negotiations is that we will be able to operate in an environment with greater regulatory certainty — in fact, this is a precondition of concluding this transaction,” he said.

Commenting on improving customer service at the telco, Thodey said customer complaints to the telecommunications Industry Ombudsman had also been reduced by one third during the year.

“All staff and executives in the company now have 40 per cent of their at-risk pay based on achieving company-wide targets of a six per cent increase in customer satisfaction … as measured by the voice of customers,” he said

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