Beyond the end of Telstra's nose

Summary:Telstra’s AGM passed by peacefully this week, despite the absence of a clear long-term strategy and a short-term focus on results.

Telstra presented an acceptable set of results in August, with a 1.1 percent rise in revenue and 1.6 million new mobile customers. They're expecting similar revenue growth this year, without repeating the customer land grab.

The big question for Telstra, though, is not what happens next year, but what happens in 10 years' time. While its strategy is sound — streamline processes, improve customer service, and look for new sources of revenue — its measurements all seem to be focused on the here and now.

The prime example is David Thodey's salary package. It includes 1.4 million performance rights, based entirely on meeting targets relating to shareholder return and returns on free cash-flow investment. As I discuss with economist Richard Denniss from the Australia Institute, these seem to be remarkably short-term rewards for a CEO who's charged with the longer-term task of navigating the business through a rapidly changing environment.

We also look at how the company is delivering improvements to customer service. Things are getting better, we're told, but Telstra still had 40,000 new Telecommunications Industry Ombudsman (TIO) complaints in the first quarter of this year; twice that of Optus or Vodafone. Yet, executive bonuses have increased this year, indicating that customer-satisfaction targets are being reached. I talk to call-centre expert Niels Kjellerup about whether the company is tracking the right metrics.

Jane Caro is also on the program. The freelance copywriter and regular on ABC's The Gruen Transfer discusses Telstra's approach to its brand. How is the company positioning itself for the future?

Tell us what you think; is Telstra ignoring the challenges of the future? Call the Twisted Wire feedback line on 02 9304 5198 and leave a message.

Running time: 28 minutes, 52 seconds

Topics: Telstra, Telcos

About

Phil Dobbie has a wealth of radio and business experience. He started his career in commercial radio in the UK and, since coming to Australia in 1991, has held senior marketing and management roles with Telstra, OzEmail, the British Tourist Authority and other telecommunications, media, travel and advertising businesses.

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