commsec strategy analysis

STRATEGY ANALYSIS
Telstra is in the early stages of a five year transformation. Revenue
from traditional PSTN services is under pressure although mobiles,
internet and directories and content are offsetting this deterioration.
The transformation strategy includes significant cultural change,
building next generation networks to support growing demand for
IP-based services and simplifying IT systems. The launch of NEXT
G, a nationwide wireless broadband network has been very
successful. Telstra is in a strong position to develop Australia's high
speed broadband network via fibre-to-the-node (FTTN). Through
major changes management is creating a 'one factory' approach to
operations endeavouring to create a world of '1-click, 1-touch,
1-button, 1-screen, 1-step solutions that are simple and easy and
valued by all customers - individuals, businesses, enterprises and
governments. Should management deliver on the transformation
blueprint, Telstra 2010 will be a very different corporate animal. The
transformation aims to change Telstra from a telecommunications
company to a media and communications company. Free of
government ownership and intervention, management can chart a
course not previously allowed.
Management raised FY08 guidance. Expectations are now for
reported revenue growth of 3% to 4% (up from 2% to 3%),
EBITDA growth of 4% to 5% (up from 3% to 4%) and EBIT
growth of 6% to 8% from 5% to 7%. Forecast total accrued capex in
FY08 of $4.6bn to $4.9bn.
(Last Updated: 23/09/08)