Telstra has spent upwards of a $1 billion just over the past year alone in order to ‘win back’ customers through improving customer service and facilitating management structures to reduce complexity throughout its bureaucratic system as the Telco positions itself for a NBN future.

With a chequered past in relation to previous transformation attempts that were lead by Mr Thodey’s predecessors Sol Trujillo and Ziggy Switkowski, Telstra will need to work hard to deliver a successful outcome. However if there’s one super positive strategy they have up their sleeve, it’s got to be the $11 billion windfall from the NBN Co and government deal which the respective parties would not like to see fail.

“We still have lots of market share to win and we need to be organised better to do that. But we have said we will improve services, drive out costs and grow market share. And we are doing that. We are delivering,” Ballantyne says.

“The strategy that David (Thodey) has put in place is all about moving from a business unit focus to a functional structure.

“We have now moved to a world where we have single accountability for service, we have single accountability for products and services and innovation, single accountability for operations and our media strategy and our international strategy.”

Read more at the australian.com.au – Telstra chief overhauls Telstra for NBN game

Telstra have advised the ASX that they do not expect the ACCC to approve their plans to structurally separate the company and transfer 10 million fixed line customers on to the NBN Co’s new fibre network before their upcoming shareholders vote.

The two biggest hurdles that Telstra need to clear before it can reap the $11 billion deal with the NBN Co are still up in the air although the Telco remains confident that they will eventually get there.

The first issue was to have the structural separation plans approved by the ACCC prior to the shareholder vote on October 18. This has yet to be resolved, however Telstra have declared they will still proceed with the second hurdle, which is to take their separation proposal to the shareholders at the upcoming annual meeting.

“We do not expect ACCC approval will be received before the AGM,” Telstra told the ASX.

Updated by Ronnie on October 3, 2011

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Despite all the recent media speculation stating that the ACCC was deeply concerned with Telstra’s structural separation submission and that it may set back the National Broadband Network roll out, Telstra CEO David Thodey has come out and quashed all reports by stating that the Telco is still on track to reach a deal with the competition watchdog very soon.

“It’s no change to what we’ve said before,” he said. “We’ve got some work to do and we’re working productively with (the ACCC).”

Mr Thodey said that he expects approval from Australian Competition & Consumer Commission to be reached in time before the Telxo brings it’s retail and wholesale structural separation plans to a shareholder vote on October 18, 2011.

Updated by Ronnie on September 9, 2011

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Telstra CEO David Thodey admitted that he wasn’t surprised with the ACCC’s warning about the Telco’s structural separation plans. This statement comes as a direct result from the recent concerns aired by the ACCC in relation to Telstra’s wireless services competing against the NBN Co’s upcoming national broadband network.

According to an article at Computerworld, Mr Thodey stated that… “The ACCC has raised a number of concerns but they do not really come as a surprise to us at all,” and… “We to believe the issues can be resolved in away consistent with our principle of protecting shareholder value and the company will continue to work closely with the ACCC to address the concerns with a view to obtaining acceptance to the structural separation undertaking and draft migration plan before the AGM on 18 October 2011.”

Telstra and the ACCC have been in regular consultation over the structural separation of the Telecommunication provider. So I suspect that the emergence of these recent events will not in any way hinder the separation process nor the upcoming shareholder vote.

Updated Friday 02/09/2011

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A fundamental component for the Government’s vision of a National Broadband Network to become a reality is the structural separation of Telstra. This has now hit a major hurdle with the ACCC flagging concerns over Telstra’s plans to restructure the company.

It was expected that Telstra’s submission to the ACCC would pave the way to an $11 billion deal with the NBN Co to share it’s vital infrastructure. However a green light from the competition regulator has not been granted as they are concerned with the Telco’s pre-conditional promise of ‘not competing’ with the NBN through its wireless services offerings.

This concern could be a major setback for the NBN’s development schedule and Telstra’s structural separation plans unless immediate action is taken by the Telco to make important changes to their proposal. Although this latest issue should not halt NBN proceedings entirely, it still managed to unsettle investors as Telstra shares took a dive after the announcement was made.

Opposition communication spokesman Malcolm Turnbull didn’t waste any time to attack the integrity of the Government by stating the comments showed the Government was putting its political interests ahead of the national interest. While the Minister of Communication Stephen Conroy said this issue was a matter for the ACCC and he looked forward to the final determination.

Joined by the Minister of Broadband and Communications Stephen Conroy, NBN Co CEO Mike Quigley and Telstra boss David Thodey, the Prime Minister stated the deal would involve giving the $38 billion National Broadband Network (NBN) access to Telstra’s fixed line copper PSTN network.

Telstra’s shares were also halted from trading in New Zealand during the announcement this morning and are expected to significantly rise once trading resumes from yesterday’s closing value of $3.03. Investors have been reluctant up until now to buy into Telstra amid fears of uncertainty with the Labor government’s NBN project.

Now that the deal has been signed and sealed, it also paves the way for many contractual obligations such as a $800 millionr deal with Optus to transfer its cable customers to the NBN and in effect, make it more difficult for the Liberal party to deliver it’s alternative broadband plans for Australia if it were to win the next election.

A significant factor driving an agreement with Telstra and the Government, namely that of the ‘competition and consumer safeguards bill’, holds the key to facilitating a NBN deal. This consists of withdrawing the caveats which would stop Telstra making any advancements in their Next G mobile network along with the forcible removable of any stake in FOXTEL.

If this vital piece of legislation can be passed prior to Christmas, then Mr Thodey can present his $9 billion case to Telstra’s shareholders  early next year. If successful, this would effectively pave the way for Telstra to migrate their customer base across to the NBN which would then witness their copper PSTN network made redundant.

I suspect that if a scenario such as this does come into fruition over the course of the next 12 months, then the National Broadband Network may become too entrenched for any future Government to demolish.

Split into Retail and Wholesale divisions and we’ll give you the option to buy 49% of the NBN. Maybe not quite that easy, however it’s been stated that Communications Minister Stephen Conroy and the Federal Government will offer Telstra the option to buy a 49% stake in the National Broadband Network if they structurally separate, or should I say functionally separate.

Dangling a lucrative NBN carrot such as the opportunity to own 49 percent of Australia’s next big thing since the Snowy Hydro Hydro Electricity Project will give incoming Telstra CEO David Thodey and the Telstra Board something to think about. It’s not just separation that they will need to consider, moreover this could very well mean that Telstra may have to hand over its existing fibre network among other goodies.

In other related NBN news, it appears that AUSTAR is also vying for a piece of the action. The regional Pay TV Provider has indicated that they have already held informal talks with the Federal Government regarding their wireless communication spectrum and how it could become a vital instrument for the National Broadband Network program.

AUSTAR currently holds a 2.3Ghz and 3.5Ghz band radio spectrum licence for regional Australia until 2015 which they purchased back in 2000 for $140 million. A Wireless and WiMax solution for many rural sectors of Australia could play a pivotal role in delivering high speed broadband Internet, voice and high definition TV services to these regions, especially using the soon to be obsolete analogue TV towers that are left behind.

Meanwhile, failed NBN bidding participant, Axia NetMedia, might not be out of the race just yet. In a Request For Proposals debriefing held recently, Axia NetMedia Global Development and Marketing Vice President ‘Mark Blake’ did not strike out his company’s potential inclusion into, at least, some of the NBN’s construction.

Although tight lipped on outcomes of the debriefing, Mr Blake did suggest that citing certain elements of their recent NBN proposal, he remained confident that specific parts could be used in the upcoming $43 Billion NBN. Furthermore, he admitted that the opportunity for participation had now become more possible, opposed to less.

Could it be likely that Axia NetMedia, like AUSTAR and Telstra, play a major role in the upcoming NBN construction process? From the sounds of Mark Blake, you’d be likely to think as much.

Keep informed with all the important news on the upcoming 100Mbps National Broadband Network right here at the Youcompare Blogs.

Sol Trujillo rides off into the Mexican sunset taking with him a suspected $20 million dollar bon voyage payout, while incoming CEO, David Thodey, is left to pick up the pieces and rekindle the severed relationship left behind between Telstra and the Australian Federal Government. The appointment of Thodey has also seen the resignation of Donald McGauchie, which is effective immediately, along with the appointment of Catherine Livingstone who will take on the company’s chair.

David Thodey was a likely internal candidate to succeed Trujillo. For one, he is an Australian who knows the Australian environment, and possibly a key that won Mr Thodey the board’s vote over three other rivals, including a British executive, was his close relationship with many key Government officials. To the contrary of Mr Trujillo, David Thodey has a calm nature and was not closely associated with Mr Trujillo, so this should also give him a great advantage in the political arena.

Trujillo was essentially hated by the Australian Federal Government. He only had himself to blame for being dropped from the Christmas Card mailing list as his hostile approach to the Australian Telecommunication environment and Federal Government made Trujillo highly unpopular. What’s more, in his time at Telstra since 2005, Good ol Sol personally axed 10,000 Telstra Jobs and was not liked by the ACCC, unions, customers or his own employees. His tenure at Telstra also witnessed the nose dive of Telstra shares by more than 25%, so I guess its safe to say that many Australian Mum’s and Dad’s are also on the list.

David Thodey has definitely got a huge work load ahead of him if he’s going too turn the tide. On his list of priorities will be the new National Broadband Network and the looming Structural Separation of Telstra whilst fending off concerns raised by investors. He certainly appears to have the port folio to pull it off and we wish him well.

David Thodey Background Summary
Kellogg Post-Graduate School General Management Program at Northwestern University in Chicago
Bachelor of Arts in Anthropology and English from Victoria University in New Zealand
Pre 2001 – Chief Executive Officer IBM Australia / New Zealand (22 year career)
2001 – Group Managing Director of Telstra Mobile of Telstra Corp
2003 – Group Managing Director of Telstra Business and Government of Telstra Corp