Australian incumbent Telstra has confirmed that its CEO, Sol Trujillo, will leave the company on June 30 this year and return to the US, an announcement timed with the company’s half-yearly financial briefing. Although there have been weeks of speculation about his departure ever since it was reported that Telstra had hired executive recruitment firm Egon Zehnder to find his replacement, Telstra claims that Trujillo discussed his intentions with the Board yesterday and everyone agreed that “now was a suitable time for a transition to a new CEO given Telstra’s transformation is well advanced and on track”. The Board hasn’t got anyone in mind, but expects to have an announcement by June 30. He’ll have to be able to build a media company as well as a telco. (release)
Trujillo’s term as Telstra CEO was fairly controversial because of his combative stance towards the government (which still owns a significant part of the carrier) and unions. Under his leadership Telstra submitted an incomplete bid to the government’s National Broadband Network and was excluded from the tender, which many saw as the writing on the wall for Trujillo. “Trujillo has done some good things, but his legacy will be that he was the one who took on the government and lost…Telstra’s share price reflects that the share market didn’t believe that fighting the government was a good idea. The financial markets aren’t just looking at profits now,” analyst Paul Budde told ZDNet Australia. The union is at least happy to see him go.
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Whether Telstra will take a less confrontational approach to the government’s desire for it to open its networks is up in the air. Asked if Mr. Trujillo’s departure signaled a change of strategy and possible reentry to the tender process, [chairman Donald McGauchie] told journalists: “I think you guys have got to get over this obsession with that particular issue“…”It would be nice if this country got off the political kick and got on to the innovation investment concept and understand that there are a lot of ways to skin a cat, and we have got a lot of ways to skin this cat” reports Australian IT.
Earnings: Telstra’s earnings for the six months ending December 31st were largely stable. Total revenue rose by 2.7 percent to $12.710 billion (US$8.28 billion), although profit fell by about 1.1 percent to $1.9 billion (US$1.24 billion). Mobile service revenues grew by 12.4 percent to $3.066 billion (US$2 billion), while retail broadband revenue grew by 31.3 percent to $1.204 billion(US$785 million). Telstra has 9.7 million mobile customers, of which 5.2 million are on 3G connections. Revenues from non-messaging mobile data increased by 50 percent year-on-year to $542 million (US$353 million), or 16 percent of total mobile revenue.