On what must be the busiest day on record for Telstra Corp. Ltd.'s management, the telco posted a bumper profit, appointed a new chief operations officer, jettisoned its technology chief and presented its new CEO, Sol Trujillo, to the Prime Minister for a verbal beating over his anti-rural outbursts. Telstra's net profit swelled a record A$4.45 billion (US$3.4 billion) for 2004/05, modestly beating market expectations. However, fixed line revenue continued to erode as customers continue to migrate to mobile services which are coming under sustained margins pressure.
Telstra's revenue mirrored the general economic situation, with sales moving up 3.7 percent to A$21.5 billion in the year to June 30, 2005.
However, the results were eclipsed by Trujillo's appointment of Greg Winn, a former U.S. telephone repairman and executive vice president for operations and technologies of Denver, Colorado-based telco US West.
Winn has been installed as chief operations officer of Telstra over the top of Telstra's current group managing director of Telstra Technology Innovation and Product, Ted Pretty.
Officially, the telco is maintaining that Pretty resigned voluntarily from the organization, with Trujillo saying, "I sincerely regret Ted's decision and thank him for his considerable contribution during his eight years at Telstra."
Trujillo added, "Ted has kindly agreed to make himself available to Greg for any support he may want over the next six months".
Any amount Pretty will being given as a separation package by Telstra has not yet been disclosed, with a Telstra spokesman saying he had no comment on any payout.
Pretty's departure comes as Trujillo seeks to make his management mark on Telstra, with more senior departures imminent. The fate of Sensis chief Bruce Ackhurst, Telstra chief information officer Vish Padbranham and chief technology officer Hugh Bradlow are also understood to be under close examination by a special team appointed by Trujillo to review Telstra's operations.
However, Trujillo's performance in managing relations with key interest groups and the government as it attempts a final sell-off has also come under fire from above.
Trujillo has been personally summoned to the Prime Minister's office in Canberra to explain sanctioned outbursts by key staff that the current regulatory framework, including the Universal Service Obligation, are economically unsustainable.
Trujillo's public description of Telstra's current regulatory framework as belonging in the last century have also been poorly received by the Coalition, with key National Party senators such as Barnaby Joyce still refusing to rule out sinking the final Telstra float.
National Party figures are also understood to be unimpressed by a mysterious and sudden upgrade of Telstra broadband infrastructure in Joyce's town of St George in Queensland, with Joyce himself saying the first he knew of the upgrade was when constituents contacted him.
Referring to the upgrade as "ridiculous fun and games", one source described Telstra's "sudden enthusiasm for broadband west of Dalby" as an "insult to the intelligence" of rural Australians.
Communications Minister Helen Coonan is expected to reveal the government's final privatization compromise by August 31 when she fronts the National Press Club in Canberra. -- Computerworld Today (Australia)
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