Telstra’s privatisation has allowed it to strip itself of its flakey public sector skin and has restructured the business – which is paying off quite nicely, thank you very much.
This was the message at yesterday’s financial results announcement in Sydney, where a lighter, leaner Telco was revealed by CEO David Thodey.
Its new slimmed down business model included the axing of 300 executives from senior level, price simplification and a focus on customers – courtesy of its $1 billion investment in Project New.
The revamp which has gone hell for leather since its privatisation last year, spells the start of an intensive focus on improving an inflated, sluggish Telco into a dynamic powerhouse and a customer favourite.
“We’re getting better as a company..but we’ve a long way to go,” admits Thodey.
“We need to address the fundamentals to lower the cost base,” he added.
The merging of Countrywide and Customer divisions was cited by Thodey as being a major agent of change, helping bring about a major simplification of organisation.
“Our strategy is now bearing fruit with the encouraging sales momentum reported in the first quarter of 2010/11 continuing for the half-year.
“We are also enjoying the strongest customer momentum in over a decade, and revenue growth across our three retail segments.
“Customer satisfaction scores have improved over the half year and we are on track to achieve savings of $250 million in 2010/11. “
This billion dollar gamble is the former state-owned enterprise’s bid to stay at the top of the market as competition from Optus and Vodafone as well as new players intensifies.
However, the drop in profits of 36 percent is sure to frustrate shareholders who are already on edge over the looming NBN deal, ahead of an EGM shareholder meeting in July, which will allow them decide the fate of the plan.