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Telstra writes to soothe shareholders

Telstra CEO Sol Trujillo and company chairman Donald McGauchie this morning wrote to Telstra shareholders toinform them of the situation now that Telstra has been kicked out of the National Broadband Network bid process.

Telstra CEO Sol Trujillo and company chairman Donald McGauchie this morning wrote to Telstra shareholders to inform them of the situation now that Telstra has been kicked out of the National Broadband Network bid process.

Donald McGauchie
(Credit: Telstra)

The decision would have no impact on the company's overall business strategy, according to the duo. "Telstra's enviable financial position and strong fundamentals are no different today than they were last week before the expert panel made its decision," they said, insisting that there would be no change to the company's financial guidance.

The letter repeated Telstra's stance that it was the only company to have made a material financial commitment to building the network. "While Telstra disagrees with the decision and reserves its rights in respect of the matter, the company will move on," it said.

Trujillo and McGauchie drew attention to the company's Next G network which they said had "a clear roadmap to 42Mbps and beyond". They also pointed to the company's ADSL network, which they said reached 92 per cent of the population and the ADSL2+ network which served 82 per cent of the population.

The HFC cable network, available to 2.5 million capital city premises, had speeds of up to 17Mbps with 1.8 million achieving up to 30Mbps, the letter said. The speeds could increase dramatically, with the company able to roll out technology which will enable the cable network to deliver 100Mbps.

Telstra CEO Sol Trujillo
(Credit: Telstra)

Since the company's exit from the tender process on Monday, Telstra's shares have taken a battering, with billions being wiped off the company's market capitalisation. In the letter's last phrase, the duo tried to reassure shareholders that the company is still on an even keel.

"Regardless of what happens with the NBN, Telstra's transformation and strong financial position mean we will continue to deliver world-leading services to our customers and strong returns to our 1.4 million shareholders," they concluded.