Telstra CEO buoyant on transformation progressTelstra’s five-year plan to transform the company with integrated customer services and new high-speed networks is ahead of schedule, Telstra CEO Sol Trujillo said in an investor update coinciding with the company’s HSDPA network launch. Telstra increased its broadband market share from 41 to 44 percent, which the company attributed to content, customer service, better integration of products, and faster network speeds. The company reduced costs by streamlining procurement, including better sourcing contracts; exiting surplus office space; and reducing staff numbers by nearly 4,000.Sales revenue in the company’s first two months of the 2006/07 financial year is up 3.3 percent. This includes retail broadband up 41 percent, mobiles up 9 percent and Sensis up 10.6 percent. EBIT for the two months declined 8.6 percent compared to the company’s first-half outlook of minus 17 to minus 20 percent, due to cost-acceleration in the first half-year due to the transformation and other one-off impacts. Telstra further said there is no change to the 2006/07 outlook issued on 21 August, with full-year EBIT expected to increase by 2 to plus 4 percent, and second half EBIT to grow in the range of 37 to 40 percent.
Telstra provided updated long-term management objectives up to October 2010. The company expects revenue growth of 2 to 2.5 percent per annum, anticipating increased revenues from 3G, IP Telephony and greater HFC penetration to offset, to some extent, losses from adverse regulatory outcomes on FTTN enablers and ULL. New product revenue will be in excess of 30 percent of sales revenue. Telstra expects costs to grow 2 to 3 percent as the absence of FTTN removes some savings that were expected to flow from the replacement of copper lines. EBITDA is expected to grow 2 to 2.5 percent per year through to 2010.
Source- http://www.telecompaper.com
