Telstra stands up for shareholders

update Telstra chief operating officer Greg Winn has denied the telco is being inflexible in its decision not to deploy a fibre-to-the-node network (FTTN) until it gets the right regulatory environment.

Speaking at a Trans-Tasman Business Circle luncheon today, Winn said the telco had a responsibility to its shareowners and it took that very seriously. Telstra shelved its plans for a AU$4 billion FTTN last year after a stalemate with the competition regulator -- the ACCC -- over access prices for rivals wanting to use the network.

Winn, despite speculation that Telstra is now talking to the federal government about reviving the proposal, reiterated the message that there would be no FTTN network unless investors could make a return on investment (ROI), and that required favourable regulatory conditions.

"We are not going to deploy fibre-to-the-node unless we can get a competitive market return on invested capital on behalf of our shareholders."

Winn hinted there was other places to invest capital but didn't elaborate on just where the opportunities were.

He took the opportunity to urge Telstra's competitors to invest their capital in Australia. "We are not in the business of deploying shareowner's capital for it to be confiscated or given away at below cost to our competition," Winn said.

""Our competitors are very, very capable, they are large companies most of them ... our primary competitor is no larger than us and they invest capital around the world and in other parts of AsiaPac. They can invest their capital here.""

A group of Telstra's rivals known as the G9 recently lodged their draft proposal for a nationwide fibre broadband network with the ACCC. Telcos involved in the group include Optus, AAPT, iiNet, Internode, Macquarie Telecom, PowerTel, Primus, Soul and TransACT.

Meanwhile, Winn was delighted Telstra's progress with its business transformation. Some 18 months in to its five year strategy, Winn claimed it was on time, on plan and on budget. As part of the transformation Telstra intends to reduce its business and operational systems -- from over 1,200 -- by 80 percent in five years.

Winn admitted in his speech that another 115 systems that "nobody knew anything about" had been discovered. He declined to discuss the systems further.

Despite the discovery, the telco's customer relationship management (CRM), care and billing systems were all on track for an end of the year deployment. Additionally, the fulfilment and inventory control and customer service assurance systems for its mobile and BigPond networks is expected to be rolled out late next year.

Winn also revealed that Telstra had created a "handset issue" at the time of the launch of its Next G network by keeping its plans of the deployment a secret.

According to him, Telstra suprised not only its staff and customers but handset manufacturers as well when it switched on the wireless network in October last year. "They [the handset manufacturers] were going for a first quarter calendar year '07 launch on their product lines but we moved it up."

"A few months before we launched Sol asked me on many occasions can we move it up ... 'Is there any way we can get this done by the first of October?' ... We launched on October 6, but we were actually ready on the first," he said.

"We couldn't tell the manufacturers we had accelerated until we were pretty sure we would hit that date."

Winn said the "handset issue" had not slowed the uptake, however, claiming there were plenty of devices. As well, handset makers -- including Nokia and Motorola who were caught flat footed by the move -- have picked up the pace.

Motorola, according to Winn, have some interesting devices that will be available shortly.