Sol Trujillo to step down

Stuart Corner
Friday, 27 February 2009 01:06

IT Industry - Market

Telstra has announced the departure of CEO Sol Trujillo on 30 June saying it expects to have his replacement in place by that time.

The news was greeted with mixed reactions. Trujillo received fulsome praise from shadow communications minister Nick Minchin, who, as finance minister in the previous government oversaw the final stage in the privatisation of Telstra. Minchin congratulated Trujillo "for his enormous contribution to Australian telecommunications," saying "Sol has provided strong leadership and vision in transforming Telstra, and has greatly enhanced the company's profile both domestically and internationally. His commitment to innovation has helped make Telstra one of the world's most successful telecommunications providers."

Greens leader Bob Brown focussed on the expected size of Trujillo's payout package. AAP reported him saying: "There is no doubt there'll be some energy being put into a massive golden parachute." No need, the groundwork has already been laid. According to Telstra's last annual report Trujillo is required to give only 30 days notice and will receive a full year's base salary of $3m. This however is only a fraction of the $13.4m he took home last year.

The unions, however will be glad to see the back of him. AAP reported Communications, Electrical, Plumbing Union (CEPU) communications divisional president Len Cooper describing Trujillo's time as Telstra CEO as "an unmitigated disaster". He said CEPU members had been shamefaced by the "arrogance" with which "their employer has treated regulators, customers, staff and the federal government".

Whoever succeeds Trujillo will have to do some major conciliations with the unions and the Government. Telstra's exclusion from the NBN RFP marked the nadir in a relationship with government that had been deteriorating for years.

Other industry watchers are not even impressed with what is generally regarded as Trujillo's greatest achievement, Next G and the transformation of Telstra. One former senior Telstra executive told iTWire: "There is an ongoing perception that somehow or other Sol has been a great CEO, which seems to have been built on two limbs, first that he invented and implemented a transformation plan and secondly that he has been a 'great teacher'.

"Let's get clear about the transformation. Telstra is still essentially the same company it was when he arrived, it has the same businesses (except one Chinese website) and mostly the same technologies. The only real network deployment was Next G – a relatively simple exercise given that all it entailed was trading out electronics at existing sites. The problem in deploying wireless normally is getting access to sites and getting them all up (holes in network coverage are a problem). The technology wasn't 'new' 3G was already old, and tuning it to 850MHz had been done by his vendor [Ericsson] for another network."

This commentator was no more impressed by the IP and IT transformations for which Trujillo has received much credit. "He replaced the core network with an IP core but that is technology 101 these days. The much vaunted transformation of IT systems is behind time and over budget."

A remarkable co-incidence
Sol Trujillo announced his departure ten years almost to the day after Telstra announced the appointment of his predecessor, Ziggy Switkowski. Then chairman, David Hoare said of him: "We are confident he is the best person for leading Telstra into the next stage of its development...He brings a wealth of senior business experience to the position, gained in large corporations over the last 20 years." One of Trujillo's first acts as CEO was to paint a grim picture of the Telstra he had inherited has having been starved of investment for years.