Sol: Simple solution to Telstra's problems

Stuart Corner
Thursday, 01 December 2005 09:42

IT Industry - Strategy

Telstra's CEO Sol Trujillo, has sent a brochure to all shareholders outlining the details of Telstra's' recent strategic review briefing along with a covering letter warning against foreign-owned telcos.

In that letter he says: "When I arrived here in July the first thing I did was set about reviewing this business. This four-month journey has been about analysis and understanding based on facts and data. We have been looking at our networks, our systems and our processes. At the same time, we have taken a look in the rear vision mirror. Our costs have been growing fairly dramatically, while our traditional fixed-line revenues have been decreasing as a result of regulatory action, competition and migration to wireless and broadband networks.

"Our strategic review took account of all these facts and the answer was simple. To survive and prosper Telstra must invest and innovate."

He makes mo mention of the considerable difficulties in executing n this strategy but identifies the biggest hurdle to this "simple" solution as being the regulatory environment, and singles out foreign-owned companies as being the primary exploiters of this threat to Telstra and shareholders' funds: "If access to our future networks is regulated under Part 11C of the Trade Practices Act, allowing foreign-owned competitors access to our new networks – what are the benefits to us in investing?"