telstra to restructure senior management

Telstra to restructure senior management

KATE LAHEY

March 29, 2010

TELSTRA is preparing to announce a restructure of its senior management team as early as today.

The move is an effort to regain lost ground in customer service and to reshape capacity to deal with issues arising from the national broadband network in the next few years.

Under increasing pressure on several fronts, including a loss in market share, chief executive David Thodey is expected to reveal substantial management changes.

These are rumoured to involve the appointment of two chief operating officer-style positions to report to Mr Thodey. This would reduce the number of executives reporting directly to him and allow him more freedom to focus on the federal government's national broadband network.

The new structure appears to have upset at least one executive. Group managing director of media Justin Milne is believed to have resigned on Friday ahead of the changes to be announced.

Mr Milne reported directly to Mr Thodey, and was in charge of the online and mobile properties of Telstra's internet business, BigPond.

His departure follows the resignation late last year of David Moffat as managing director of Telstra's consumer group. Glenice Maclellan has been acting in that role since November.

Mr Thodey was appointed last May, with the expectation he would shift Telstra's focus from technology, back to its relationship with its customers, through improved service.

After seeing through the tail end of a five-year strategy begun by former chief executive Sol Trujillo, Telstra's half-year results for the six months ended December 31 revealed its traditional phone business had declined so much that it dragged total revenue into reverse, dropping 2.5 per cent to $12.32 billion, while net profit dropped 3.3 per cent to $1.85 billion.

Customers are ditching the fixed-line, copper network to use wireless broadband and are increasingly relying on mobile phones instead of landlines.

Telstra is yet to agree with the government on how much the company should be paid to co-operate with construction of the national broadband network.

An industry analyst said Mr Thodey was under pressure to deliver better service - a key part of his pitch in winning the role.

''Thodey himself is coming under pressure. He needs to kick a goal,'' the analyst said.

''The copper network is apparently - on the strength of his last downgrade - accelerating its downturn much more quickly than they expected, which means the whole Telstra remake is under time pressure.''

A Telstra representative would not comment on Mr Milne's departure or any restructure speculation.

Source: The Age

http://www.businessday.com.au/business/telstra-to-restructure-senior-management-20100328-r575.html