stagnant share-price, page-48

Thodey was interviewed by Alan Kohler for Inside Business which aired last weekend.
Kohler asked about capital management plans.

http://www.abc.net.au/insidebusiness/content/2011/s3340843.htm

ALAN KOHLER: The deal with the NBN - $11 billion value, as you say - a unique opportunity for any company to have cash flow for 20 years underwritten by the government. What are you going to do with the money? Have you, I mean you obviously keep getting asked that, I've asked you that...

DAVID THODEY: Yes, you have asked me.

ALAN KOHLER: ...but I guess the fundamental question is, the strategic split between investing in the business and giving it back to shareholders.

DAVID THODEY: Yes, that's exactly, that's the question. And we haven't decided yet and that's one of the things that the board's been very clear about, which is called capital management. Firstly your point's right, our cash flow's do increase over the three-to-five-year period, and the question is what do we do with that excess cash? We've always said that if we haven't got a use for it we'll give it back to shareholders.

But we've not declared that, we've said to shareholders that early next year we'll come out with our capital management strategy and that will give clarity to what we plan to do.

But you're right, there's two different options, you could give it all back to shareholders, or, if we think it's right, re-invest in new businesses that are going to give us longer-term returns.

ALAN KOHLER: So when you come out with your capital management strategy will you be specific about how much of the cash that's coming to you will be given back to shareholders?

DAVID THODEY: Yes we will be. Well, if on the basis we make that decision. But we do want to give some clarity because for the company, I think, we feel a great responsibility to our shareholders, both retail and institutional, in terms of giving the picture of what we think the future looks like. So yes we will be.

ALAN KOHLER: Cause there's a long history of Telstra throwing money away on various investments overseas and so on so...

DAVID THODEY: I'd say it was the industry not just Telstra.

ALAN KOHLER: Not just, perhaps, not just Telstra, but I guess one of the things you would have to do if you were going to reinvest the capital, you'd need to rebuild credibility perhaps to persuade shareholders that they think it's a good idea.

DAVID THODEY: Yeah. Well absolutely, and I think I'd have to be convinced personally that it's the right thing to do.

There's no question as we look out over a 10-year period, we've got to start to build new sources of revenue and value for shareholders because we're losing or moving a lot of value from our fixed network into other areas