dead cat bounce, page-10

telstra's walking wounded Telstra's walking wounded
Chris Jenkins, IT section The Australian
NOVEMBER 18, 2005

TELSTRA'S $10 billion next generation network overhaul is a "cookie-cutter" exercise that already lags similar international efforts and is relying on a demoralised workforce to deliver its aggressive targets, analyst firm IDC has said.

On Tuesday Telstra began a series of briefings detailing its network and IT plans for the next five years, announcing a major network replacement project, a major rationalisation of IT systems and the shutdown of its CDMA mobile network in favour of a new 3G platform.

The company named Alcatel, Cisco and Ericsson as its major partners for the project, awarding contracts worth more than $5.5 million, with more agreements to follow.

Yet Telstra was already lagging major telcos in Europe and North America in its bid to overhaul its networks, being up to three years behind carriers such as Spain's Telefonica and France Telecom, which are already delivering services based on next generation networks, IDC research director Landry Fevre and research manager Warren Chaisatien say in a report on the transformation.

"It appears Telstra's strategy was cookie-cut from those of the incumbent operators elsewhere, with slides that could have come straight from the three designated vendors," the report says.

While the company's decision to pension off CDMA in favour of 3G made "absolute sense", Telstra also needed to rationalise its mobile brands to give it a more convincing presence in the consumer market, the report says.

However IDC believes Telstra's greatest hurdle will remain its people. "Telstra's employees, who have been subject to reorganisation almost every six months in the last decade, are now highly de-motivated and cynical about the company's multiple strategy tacks," the report says.

"This will be accentuated by the fact (that) one in five of Telstra's 52,000 employees will be let go in the next five years."

Indicating the size of the challenge ahead, Telstra's new group managing director for human resources, Andrea Grant, will report directly to chief executive Sol Trujillo - the first time that human resources has been elevated to such status in the company.

Telstra also had to overcome its own internal politics in order to deliver the systems integration required for its network, IT and marketing strategies and to meet the tight deadlines set by management, the IDC report says.

Telstra declined to comment on the report.