Ringing the Changes

Ringing the Changes

Memo to telcos everywhere: the world is changing. Get used to it.

Life will always hold certain bizarre mysteries for me. I'll never understand why some men, clearly in love with themselves, go for a jog in Lycra Speedos; or why service station attendants cannot be bothered to notice they place the "8" upside down when habitually changing the petrol prices on their roadside signs.

I'm not sure which one upsets me the most, although the upside down numeral "8" does seem to freak me out a bit, especially after a couple of short-black coffees. (Guys, the small loop goes on top!)

Another mystery is the constant surprise of the general population to the fact that the world is changing. This stunning revelation occurs about once a quarter in this country, when the leading executives of Telstra stroll up to the podium to tell their long-suffering shareholders that the grave for their corporate coffin is another 6 inches deeper than the last time they stood before them.

Their fashion at the moment is to whinge about regulation - a legacy of the company's own price-gouging and generally dismissive attitude to customers during previous decades. There are now nearly 350 pieces of regulation today where there were 20 in 1997, complains the chairman, Donald McGauchie.

Good. And there are reasons for that, as you well know, Mr Telstra. Anything else on your mind?

The trouble with Team Telstra, as they delightfully describe themselves in their e-mail addressing convention, is that they don't get it; or they do but just will not admit it beyond hushed conversations of their own offices.

Regulation, Helen Coonan, John Howard et al are not the problem, not even the reality that government owns 50.1 percent of the company. In fact, there is not even a problem. There is a challenge and it comes in the form of new technologies and entrepreneurs whose vision is still a decade from global manifestation but is already rocking the status quo.

It is hard for Telstra shareholders, especially the mums and dads who crashed the party too late with the T1 and T2 offerings, to hear that the great cash-cow of fixed line revenue fell 1.5 percent in the first half of the financial year and then went skydiving in the second-half, free-falling 5 percent.

Cheques to the value of $2.5 billion are being sent out to shareholders, representing about 20c per share, to ease the shareholders' pain. The more astute in this community of 1.6 million might be concerned by this action. The investor Warren Buffet is famous for being wary of companies that pay out dividends, saying it is an indication that the management think you can get a better return on investment elsewhere in the market. That's not something that inspires him.

Given that one imported Telstra manager would not recommend the stock to their mother, Buffet's generalization might ring especially true here.

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