Trujillo's masterplan progresses

"We're one year into a fundamental transformation," he said in an address to the National Press Club in Canberra that was broadcast live on ABC televion.

On November 15 last year, Trujillo outlined a number of initiatives aimed at slashing costs, rationalising business and operational platforms and building new network infrastructure.

"There's been progress everywhere in the transformation of Telstra," the executive said today, noting he liked to talk about his company being "under construction".

"The new Telstra does in fact put the customer first, using modern, market research to determine customer segments, and differentiate Telstra from its competitors."

Trujillo cited new subscription-based telephony plans launched last week by Telstra as an example of the results of this so-called "market-based management".

The Telstra supremo said "well over half" of his company's new nation-wide third-generation (3G) mobile phone network had been built, with the rest due to be finished by the end of this year.

"The deployment of our new Internet Protocol core equipment is also advancing on schedule," he said.

Trujillo also claimed progress in the tricky area of customer service, an area in which the popular perception is that Telstra has floundered.

"We have achieved big reductions in customer service waiting time, for example, by 62 percent in fixed broadband [ADSL] and by 20 percent in fixed-line phone services," he said.

"We've reduced fault detection time by up to 25 percent -- while we're taking cost out of this business."

Trujillo said Telstra also now had more than 750,000 customers using its online billing platform.

And the company is saving money by not using as much space.

"We have exited more than 25 buildings, cutting the size of our property portfolio, saving more than AU$14 million annually," said Trujillo.

That must hurt
But it wasn't all plain sailing for Trujillo, who endured a lengthy question and answer session from journalists following his speech.

He was forced to defend Telstra's poor relationship with politicians and the nation's competition regulator, as well as the process by which it procures networking and end-user equipment. The year-on-year decline in Telstra's share price was also an issue.

"Australia is moving towards a performance-based labour market, and your performance in the last year is a share price that has dropped about 27 percent while the rest of the market has gone up by 25 percent," said one questioner.

"Why should you and the rest of your executive team not accept a 25 percent performance pay cut on the basis of that abysmal share market performance?"

Trujillo also spent a large part of his speech attacking the nation's telecommunications regulatory environment that guides the operations of carriers like Telstra.

He reiterated Telstra's long-standing position that it would not construct its planned national fibre broadband network unless it could get regulatory certainty on the terms of access to the network by competitors.

"Do you accept that part of the reason for the current regulatory process is that Telstra has the current dominant position in the market?" asked one reporter.

Trujillo himself also took various swipes at Telstra's competitors during his speech.

In a reference to Optus' parent company SingTel, he said Telstra was not prepared to subsidise shareholders in the Singaporean carrier by allowing others to use its planned fibre network at prices below Telstra's own cost.

He also appeared to respond to an inflammatory document released yesterday by a group of nine telcos representing Telstra's major competition.

The group -- AAPT, Internode, iiNet, Macquarie Telecom, Optus, PowerTel, Primus, Soul and TransACT -- claimed Telstra's planned fibre network would reach less than half of Australians, in effect creating a two-tiered system for broadband access.

"The new high-speed access network would initially cover ... more than half of all Australian households," said Trujillo, who claimed the proposal covering only capital cities did not mean "that we have forgotten the rest of Australia".

He said Telstra expected to expand the footprint of the fibre network to additional communities if it could get a return on its investment.

"This network would be available at commercial rates to competitors," he said.

Like some of his recently hired executive team, Trujillo also took pains to use Australian terms to communicate with the audience.

"To use an Australianism that I have learnt, we are 'fair dinkum' about protecting shareholder interests and investments," he said.