Telstra shaky as key executive Justin Milne departs * John Durie...

Telstra shaky as key executive Justin Milne departs

* John Durie
* From: The Australian
* March 27, 2010 12:00AM


'TELSTRA is facing a fresh crisis after Justin Milne, the executive charged with driving its media expansion and broadband content delivery, quit yesterday.

The departure of Mr Milne, the head of BigPond, sparked concerns of deeper unrest within the embattled telecommunications giant. A company spokesperson declined to comment on the move and on talk of an imminent management shake-up.

Telstra veteran Mr Milne's departure is a big blow because he represented the new-media face of Telstra -- the very part of the company that will drive its future, either against or with the national broadband network.

His departure comes at a crucial time for Telstra, with decisions due soon on whether it will support the government's NBN proposals, and as it is putting together next year's budgets.

This process has added to internal unrest, as Telstra chief executive David Thodey approaches his first anniversary in May.

Since taking the job, Mr Thodey has presided over three profit downgrades amid talk that another one is in the offing.

At the interim results presentation in February, Mr Thodey confirmed the company had lost market share in broadband and mobiles due mainly to delays in matching competitors' price cuts.

Ironically, the indecision within Telstra is not due to the constant external talk about the NBN project, but the talk does highlight the risks for the company.

Company veteran and chief financial officer John Stanhope is perceived by the government to be the main obstacle to any deal because he refuses to budge on valuations of the telco's copper wire ducts and customer migration.

In some eyes, an NBN deal would at a single stroke change both internal and external perceptions of the company.

Mr Thodey is operating with key members of his management team in acting positions, awaiting confirmation.

These include consumer boss Glenice Maclellan, operations chief Mick Rocca, and wireless, data services and applications boss Philip Jones. The temporary postings have been in place all year, since consumer boss David Moffatt quit in November.

The government's intention to build the broadband network with or without Telstra adds a level of competition to that already coming from Optus and Vodafone.

The NBN will be a wholesale network, which means rival internet service providers will be able to use it to compete with Telstra, and have a faster and more reliable service.

Some Telstra insiders say this threat alone demands a major structural change to gear up for a fight. Back in the days before Sol Trujillo, Telstra management drew up plans called Project Millennium to split the company along lines being suggested by the NBN project but in a shareholder-friendly way.

The argument was that the integrated model was not necessary, and it would be advantageous to spin off Sensis, BigPond and other parts of the empire.

Mr Trujillo was a strong proponent of the integrated model.'