Tuesday, July 31, 2018

Telstra appoints new leadership team

Telstra announced the following new topline organisational structure and leadership team led by current CEO Andrew Penn:

  • Michael Ebeid joins Telstra to run the Enterprise team servicing Australian and international business and government customers. 
  • Vicki Brady will continue to lead Consumer & Small Business designing digitally-led propositions.
  • Nikos Katinakis joins Telstra in mid-October to lead Networks & IT focused on extending the company’s network superiority and enabling digital experiences.
  • Brendon Riley will become the CEO of Telstra InfraCo, which will leverage the InfraCo assets and drive growth in the wholesale market.
  • David Burns, currently with the Enterprise team, will lead Global Business Services (GBS).
  • Robyn Denholm will move to the role of Chief Financial Officer & Head of Strategy. 
  • Alex Badenoch, Transformation & People will lead the T22 strategy transformation execution as well as drive the way the company works and operates, strengthening employee engagement. 
  • Carmel Mulhern, Legal & Corporate Affairs will continue in her role engaging external stakeholders, including relationships with government and community.

“Last month I announced the T22 strategy to the market and today I am making furtherannouncements on Telstra’s structure and leadership to ensure we deliver rapidly and effectively on all of the commitments we made to our customers, the market and our team. At the heart of these changes is the simplification of our products and services built on newtechnology. By mid-next year we will have fully rolled out our market leading products and services. To help deliver these changes, we are announcing a new end-to-end products and technology division of Telstra. It means we will significantly increase our technical capabilities around product development and management," stated Andrew Penn.

Telstra to spin-off fixed infrastructure, focus on 5G

Almost exactly 8 years after signing a historic agreement with nbn Co Limited (NBN Co), the consortium established to design, build and operate Australia's wholesale-only national broadband network (nbn), Telstra has just announced plans to spin-off its remaining fixed network infrastructure, including long-haul fibre, data centres, and subsea cables, into a separate company.

The nbn Co agreement reached in 2010 ensured that Telstra provides access to its facilities, which has remained a steady source of income over the years. Nevertheless, Telstra is embarking on a major reorganization and radical transformation of its customer plans and pricing. The company says it is looking ahead to a "post-nbn rollout" world in which very fast access speeds are ubiquitous across the country and multiple competitors run over the same fixed infrastructure.

The strategy, named Telstra2022, has four key pillars:
  • Radically simplify product offerings, eliminate customer pain points and create all digital experiences
  • Establish a standalone infrastructure business to drive performance and set up optionality post the nbn rollout
  • Greatly simplify the corporate structure and ways of working to empower our people and serve our customers
  • Cost reduction programme and portfolio management

Andrew Penn, who has now been CEO of Telstra for three years, says "The rate and pace of change in our industry is increasingly driven by technological innovation and competition. In this environment, traditional companies that do not respond are most at risk. We have worked hard preparing Telstra for this market dynamic while ensuring we did not act precipitously. However, we are now at a tipping point where we must act more boldly if we are to continue to be the nation’s leading telecommunications company.”

The corporate restructuring will result in a net reduction of 8,000 employees and contractors, and the elimination of 2-4 layers of management.

The infrastructure spin-off, tentatively called Telstra InfraCo, will begin as a wholly-owned subsidiary on 1 July, although over time, Telstra may seek a strategic investor or separate listing. Its assets will include Telstra’s fixed network infrastructure including data centres, non-mobiles related domestic fibre, copper, HFC, international subsea cables, exchanges, poles, ducts and pipes. Its services will be sold to Telstra, wholesale customers and nbn co.

Telstra InfraCo will also comprise Telstra’s nbn co commercial works activities and Telstra Wholesale, with a total workforce of approximately 3,000. It is expected this new Business Unit will control assets with a book value of about $11 billion and have annual revenues and EBITDA of about $5.5 billion and $3 billion respectively.

The new business unit will not include the mobile network assets including spectrum, radio access equipment, towers and some elements of backhaul fibre, which will remain integrated with Telstra’s core customer segment.  Telstra itself will seek to be a premium brand with its future tied to mobile connectivity and the upcoming 5G launch.


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