NBN deal was my biggest challenge: Thodey

Outgoing Telstra CEO David Thodey has said the biggest challenge in his six years at the helm of Australia's largest telecommunications company was improving the relationship between Telstra and the government before signing the NBN deal.

The relationship between Telstra and the then-Labor government wasn't just frosty when David Thodey became CEO in May 2009; it was in deep freeze.

(Image: Josh Taylor/ZDNet)

It was just one month after then-Communications Minister Stephen Conroy had announced that the government would effectively "go it alone" and build an entire new National Broadband Network (NBN) of fibre to the premises out to over 90 percent of Australian premises.

The announcement was reached after Telstra, then under the control of the divisive, and at times antagonistic, Sol Trujillo, had submitted a half-hearted proposal that didn't meet the requirements for what was then a planned fibre-to-the-node network, so the Rudd government threw it all out and decided to go it alone.

When Thodey took the top job, he was immediately dropped into two years' worth of complex negotiations with the government and the newly created NBN Co, because NBN Co would need to access Telstra's pits and ducts to reduce the cost of the rollout, and would need to pry the company's fixed customers from the copper network in order to succeed.

"When I became CEO, the whole scenario was difficult," Thodey told journalists after announcing his retirement on Friday.

"The relationships were not open and transparent at that time, and I think there was little trust between the company and the government at that time. And also with regulators and other people in the industry.

"It took time to go through building that trust, but also the complexities of a rebuilding of a national bit of infrastructure that had been privatised. There were so many regulatory considerations, legal considerations, commercial considerations, that it was just very complex."

At the other end of the negotiations, an AU$11 billion deal had been struck to lease ducts and pipes to NBN Co, and transfer customers onto the NBN.

"It was taxing, trying, satisfying, but I think we got through that, and we came out with something both parties could live with."

After the change of government in 2013, Telstra and NBN Co entered another year-long negotiation to modify the agreement to allow NBN Co to use the copper and hybrid fibre-coaxial (HFC) networks for the multi-technology mix NBN.

Thodey said his second biggest challenge was moving the company to begin focusing on the customer.

"It's really been about how we as a company united together around customers. In a company the size of Telstra, getting every part of the company aligned has been both challenging and incredibly satisfying," he said.

The results have paid off, with Telstra adding over 5 million customers to its mobile network in Thodey's time as CEO.

Thodey will step down on May 1, to be replaced by current CFO Andy Penn. Telstra is in the process of looking for a new CFO, but did not reveal any potential contenders on Friday.

Thodey, at the age of 60, said on Friday that he will likely take a lengthy break, travel overseas, and potentially look to get into non-executive roles or policy development early in 2016.

"I'm going to take a break with my wife. I'm very keen to contribute back into the business community in maybe non-executive roles. I enjoy policy development, and if I can find opportunities to contribute in that way, I'd be delighted."

Incoming CEO Andy Penn said he is "daunted" at the prospect of following Thodey's legacy at Telstra.