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Telstra losing its Thodey-mojo to reawaken old memories

Since the start of this decade, Telstra managed to do away with many of the gripes against it, but in 2016 the company has returned to something more like its former self.
Written by Chris Duckett, Contributor

The giant of Australia's telecommunications scene has not fallen, but it does have a pretty bad sniffle, as the opening months of 2016 have found Telstra consistently on the back foot.

And each and every incident is a matter of its own making.

At the start of this year, Telstra suffered a number of well-publicised outages -- one which the telco pinned as a result of human error, and the others coming about because the internals of Telstra's network could not handle the deluge of customer devices wanting to re-register on the network after an incident.

After an engineering review, Telstra said it would be putting more resources into boosting those technical areas that have previously fallen over.

The telco attempted to make up for its failures by offering a pair of free data days, although many customers rightly pointed out that their businesses and communications were interrupted on a weekday, often in peak times, and not on a lazy Sunday.

However, the latest furore to engulf the company is not one that can be fixed by some network redundancy and a few new purchases of networking gear -- it goes to the heart of how the company presents itself to the public.

In the years when David Thodey led the company, Telstra managed to slowly move away from its image as a belligerent, buck-munching corporation that didn't give a damn about much else than the bottom line, to a company that realised its customers were angry with it, and it needed to change to keep them.

By the time Thodey departed last year, there were very good reasons to recommend the telco over its rivals.

Customers paid a premium for its network coverage and reliability, as has traditionally been the case with Telstra, but many decided the trade off was worth it.

Over Thodey's time, Telstra decided to wade deeper into social issues, as its statements on climate change [PDF] and fighting racism show.

But it has done itself no favours in the past couple of days, as reports emerged that the company bowed to pressure from the Catholic Church to end its public advocacy for same-sex marriage in Australia.

Today, a new report in The Australian has followed up its claims from yesterday, with Telstra chair Catherine Livingstone reportedly called upon by the Archbishop of Sydney to explain Telstra's stance, and coming to an agreement with the Archbishop that the company would end its public advocacy.

As the company tries to walk both sides of the aisle, it has this morning released a statement from its CEO Andy Penn that attempts to hose down customer concerns.

"Telstra supports marriage equality as part of the great importance we place on diversity and standing against all forms of discrimination," Penn said.

"Equally we recognise there are many and varied views and if we are all truly accepting of diversity, there should be room made for all of them.

"While Telstra continues to support Australian Marriage Equality and has not changed that position, we have made a decision not to publicly participate in the debate further.

"This is because the proposed plebiscite process gives everyone an opportunity to contribute and out of respect, it is important we allow them to voice their own views."

Penn said in his statement that the company's record on diversity and inclusion has been overlooked, but it is those previous actions that have resulted in Telstra finding itself in this latest mire, one it let itself be led into.

By deciding to step back from debate on the basis that it could see less revenue from the Catholic Church, Telstra has shown that it can be bullied off the ball, and therefore casts doubt on the rest of its pronouncements.

When a company decides it wants to support a social cause, it needs to be all-in -- not participate until one of its customers object.

The exemplar of this is Apple's Tim Cook, who famously told climate change-denying investors that they shouldn't invest in Apple.

Unless a company is willing to risk putting some of its investors or customers offside, it shouldn't engage in those debates. Telstra can point its record all it likes, but now a sliver of doubt exists in everything it says.

How big a contract would it take for Telstra to decide to change its climate change statement? Which climate change-denying billionaire would need to call upon a board member to get a concession from Australia's dominant telco?

It is unlikely that these circumstances would come to pass, but given the actions of Telstra on a social issue with over 2-to-1 support in favour, the prospect has moved out of the realm of the impossible.

Suddenly, Telstra looks to be returning to its pre-Thodey behaviour of chasing the almighty buck.

The telco has not been helped by the optics of its AU$1.6 billion deal with NBN to manage construction within its HFC footprint.

This new deal arrives after Telstra managed to keep its AU$11 billion from NBN in the amended definite agreement signed in December 2014 that saw NBN take on ownership of Telstra's legacy copper and HFC networks.

Business-wise, Telstra would be a mug not to sign up to these deals, but in the minds of spectators, it resurrects thoughts of Telstra at its worst, when it was able to hold the government and communications in Australia over a barrel until it got the concessions it wanted.

With the NBN projected to cost somewhere in the range of AU$46 billion to AU$56 billion in peak funding, that means approximately 23 to 27 percent of all expenditure on building the National Broadband Rollout will end up in Telstra's pockets.

Given that one of the supposed ideas of constructing the NBN in the first place was to correct the ills of allowing Telstra to become a behemoth with immense powers, having 1-in-4 dollars spent on the project doesn't seem to sit well with that goal.

Combine this with Telstra's recent technical and social bumbling, and it's easy to see why it is that customers have decided enough is enough, and are moving to other carriers.

The hard-won gains in attitudes towards Australia's telco incumbent, even if it was from animosity to neutral, have begun to slip away, and no amount of free data or attempted spin can make up for Telstra choosing to gag itself and back down to customer pressure.

It is now experiencing pressure of another kind as angry customers leave with a sour taste in their mouths, and the Thodey legacy begins to be tarnished.

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