Telstra: Microsoft's Windows Live email is not as good as we thought

Telstra CEO David Thodey said in the company's annual general meeting on Tuesday that the decision to move the company's BigPond customers to Microsoft's Windows Live email service is not performing as well as anticipated.

Responding to a shareholder's question, the CEO said that the move had been straightforward for new users of the service, but issues had been seen in existing customers that had been on the service when it moved to the Microsoft platform in February last year.

"It's caused us to go back and relook at what we're doing now," Thodey said.

"The background to the decision was that we had built our own email platform ... and we were challenged to keep it up to date with the sort of functionality we thought we'd need to have in an integrated messaging world."

"So we took the decision to white-label, in effect, the Microsoft platform."

"It's been OK, but not as good as we thought it was going to be."

Thodey said that due to the issues encountered with the switch, the company will be reviewing any future plans.

"The decision when we made it seemed right, and we are going to review where we go to in the future."

NBN contracts

Earlier in the AGM, Telstra reiterated its previous statements that it would be focused on maintaining shareholder value should any renegotiation of its AU$11 billion National Broadband Network (NBN) agreement occur following NBN Co's 60-day review, which is expected to report in early December.

"A move to predominantly use fibre to the node in the rollout of the NBN could result in the renegotiation of some aspects of our Definitive Agreements," said Telstra chairperson Catherine Livingstone.

"In the meantime, Telstra will continue to fulfil the obligations set out for us in the existing agreements, and continue to work constructively with the government and NBN Co in the best interests of our shareholders."

Last month, Thodey called for a quick resolution to any renegotiation between Telstra and NBN Co.

The existing arrangement between Telstra and NBN Co gives NBN Co access to Telstra's pit and ducts infrastructure for the NBN rollout, and pays Telstra each time a customer is transferred over from the copper network onto the NBN.

For NBN Co to switch from a fibre-to-the-premises network to a fibre-to-the-node network, the deal would have to be restructured to give NBN Co access to the last section of Telstra's cooper line from the node to the premises.

Remediation work for the NBN was suspended earlier this year, with the discovery of poor asbestos handling practices.

Addressing the issue today, Thodey said that asbestos was not a new issue.

"We have known about asbestos, carefully tracked its management, and extensively trained staff, with well-established safety procedures in place for employees and contractors," he said.

"Remediation work on our pits stopped as soon as we identified concerns with the work practices used by some of our contractors. We have taken steps to absolutely minimise the risk of such incidents occurring again."

"Our priority has been — and remains — the safety of our employees, contractors, and the general public."

The CEO said that the asbestos issues have made no impact on the company's financials.

The company forecast "low single-digit" growth in revenue and profit, with capital expenditure to be maintained at 15 percent of sales due to the build out of the company's 4G network and completing the NBN transit network.

Telstra reported that its cloud services had grown by 33 percent last financial year, and the company would be looking to continue that growth by making acquisitions and investments in datacentres.