BuddeComm supports Telstra.
Despite what many people believe I am a big supporter of the new Telstra. I have far more faith in this company than many of the financial analysts who are dumping their shares appear to have.
The problem for David Thodey is that he has inherited a company that experienced a major strategic setback under his predecessor and as a result of that the company is now ill-prepared to face the brave new world ahead of us. They have lost five years of an essential transformation process that was never begun under Sol Trujillo. There is no way in the world that David Thodey or anybody else in Telstra can change that situation overnight.
While David fully understands the future he will still have to deal with the company’s current situation and many of the decisions made before his time have, from a transformation point of view, long-term negative implications. These cannot be easily turned around. Where were all those financial analysts and other experts when Sol Trujillo made strategic mistake after strategic mistake? Look at the facts – the share price suffered much more under Trujillo than under Thodey.
What the current management of Telstra is facing is a juggling contest between the past and the future and this will not be easy. For example, it means working with existing strategies and policies that are actually undermining the long-term interest of the company. They will be fixed, but it will take time.
However, I for one believe that Telstra is significantly undervalued – for the simple reason that the company is well aware of where it needs to go – and its strategic decisions will be made with that in mind. If this results in some decisions that appear to be a setback and result in short-term negative results, so be it. Look around the world – none of the national operators got through transformation without pain – for example, look across the water at Telecom New Zealand.
As a matter of fact I classify Telstra as one of the leading national telcos in the world. It is one of the few companies with a strong sense of its future and the willingness to get there.
Yes, this must be awfully scary for Telstra, as it means leaving the familiar, well-trodden ground and facing the enormous challenges that such a transformation will create. During such a difficult time Telstra will lose many of its fiscally-focused friends who are only interested in short-term gain. However these people will happily return once Telstra has proved that it can make the transition.
So Telstra is still moving along with one foot in the past, and it will therefore make decisions that people such as myself don’t necessarily like. But I fully understand that Telstra will have to bridge the gap between now and then, and so I can understand some of those decisions.
I maintain my focus on the future of the company and I do see very good things happening there, which I fully support in broad terms, and I am therefore more than happy to cheer Telstra on during the extraordinarily difficult period of transition.
Paul Budde
- Telstra Corporation Limited – Financial Statistics
- Telstra Corporation Limited – Company Overview and Operating Statistics
- Australia – National Broadband Network – Overview & Analysis
- Australia – National Broadband Network – Critical Considerations
- Australia – National Broadband Network – Competition and Regulations
- Australia – National Broadband Network – Deployment Strategies
- Australia – National Broadband Network – Early Projects
- Australia – National Broadband Network – Industry at crossroads
- Australia – National Broadband Network – NBN Co and Infrastructure
- Australia – National Broadband Network – Overview & Analysis
- Australia – National Broadband Network – Telstra
- Australia – National Broadband Network based on Trans-sector model
- Australia – National Broadband Network Trans-sector projects
- Australia – National Broadband Network – Government’s Trans-Sector Conference
March 9th, 2010 at 2:51 pm
Paul,
Like your comment, and find myself agreeing with you, but want to understand why the government is not giving consideration to Telstra shareholders for the fact that with the NBN, Telstra shareholders seemingly are again about to be punished as the government wants to punish Telstra for the sins of the Howard government in not hiving off the infrastructure before they floated.
Since they sold the shares with the infrastructure intact, it seems grossly unfair for Conroy, and Rudd to screw Telstra, and their shareholders. (full disclosure, yes our family does own Telstra shares)
Separate issue – why in the world is Rudd going ahead with a country wide Internet filter that most of the industry will not work, and doing it with secret lists etc…, it seems we are going down the path of China, What is that really about, and why is Rudd so determined to ignore the public on this issue??