Slide 1: Presentation to FT Making Transformations Work Conference (ASX cover letter)
30 September 2008 Office of the Company Secretary For personal use only The Manager Level 41 242 Exhibition Street Company Announcements Office MELBOURNE VIC 3000 Australian Stock Exchange AUSTRALIA 4th Floor, 20 Bridge Street Telephone 03 9634 6400 SYDNEY NSW 2000 Facsimile 03 9632 3215 ELECTRONIC
Slide 2: End to End Transformation: From a telco to a media-comms company
END TO END TRANSFORMATION From a telco to a media-comms company Presentation to the FT Making Transformations Work Conference London For personal use only Tuesday 30 September 2008 By Sol Trujillo, CEO, Telstra Corporation Limited A COMPANY IN DECLINE – A TIME FOR DIAGNOSIS Today's conference is ext
Slide 3: Transformation strategy: put the customer at the centre
Telstra had little differentiation from more nimble competitors. There was very little integration across Telstra’s strong suite of telecoms and media assets. Telstra was competing on price, not value. Telstra had aging networks and too much complexity – three mobile networks and more than 1400 IT s
Slide 4: Partners, 2010 objectives and principles-based leadership
We chose strategic global partners such as Accenture, IBM, Alcatel-Lucent, Ericsson and Cisco. To deliver the differentiated customer experience, it was a rapid take-off from a series of parallel runways. Market based management; new network strategies; changing our product capabilities; and driving
Slide 5: Big bets: market-based management, networks and IT
Our big bets were all about differentiating our customer experience, by driving innovation and delivering premium value; o First, to drive our reinvention by embedding Market-Based Management throughout the organisation; o Second, to rebuild our infrastructure with next generation networks; o Third,
Slide 6: Next G and Next IP networks and IT transformation
o Our Next G™ network is driving mobile data growth of 44 percent and has attracted more than 500,000 wireless broadband subscribers whose ARPU is $90+ a month. • In April 2007, we launched our Next IP™ fixed network, which is fully integrated with our wireless broadband network. For personal use on
Slide 7: Organisational changes and regulatory approach
• Creating a single Product Management business unit to lead differentiation and integration as products converge, to deliver segmented product roadmaps and to improve speed to market; • Creating the company’s first business unit dedicated to servicing Australia’s 1.4 million small and medium enterp
Slide 8: Transformation changing lives and business productivity
Telstra’s transformation and value proposition is changing lives in Australia, improving productivity of businesses through real time transfer of data19 and increasing their ability to compete globally. • Three-quarters of users say Next G™ helped their business run more efficiently, particularly by
Slide 9: Lessons from the transformation
One of the lessons from our transformation is about the power of having a game-changing lightning rod that all the employees can get behind. In Telstra’s case, the iconic program element was our world-leading Next G™ network. It galvanised and inspired the whole workforce. Engineers who were sceptic
Slide 10: End to End Transformation: From telco to media comms company
Sol Trujillo For personal use only CEO Telstra Corporation Ltd END TO END TRANSFORMATION From telco to media comms company FT Making Transformations Work, London Tuesday 30 September, 2008
Slide 11: Press quotes on Telstra's decline
“Telstra's PSTN (fixed line) revenue is “ now in a slow but terminal decline. For personal use only Michael Sainsbury, The Australian, 22 April 2004 “(Telstra) has been unable to stem “ the market share losses in (its) fixed line and mobile businesses. John Durie, Australian Financial Review, 1 Dece
Slide 12: Press quotes on market share losses and sale readiness
“ Telstra has been losing market “ For personal use only share to more nimble players. Wayne Arnold, The New York Times, 10 June 2005 “Telstra is in trouble. Mr Trujillo must ready the firm for sale - a task “ that many consider to be Australia’s toughest corporate job. The Economist, 25 June 2005
Slide 13: Telstra's vision
For personal use only Telstra’s vision 1-click, 1-touch, 1-command, any screen, real-time experience
Slide 14: Telstra's transformation at a glance
For personal use only Telstra’s transformation at a glance
Slide 15: Market guidance summary
Market guidance summary* Long-term For personal use only Measure 2009 guidance Measure Management Objectives FY10 Total revenue growth 3-4% Revenue growth 3-4% CAGR from FY05 EBITDA growth 6-7% EBITDA margin 46-48% EBIT growth 6-8% Capex/sales Around 14% Accrued capex A$4.3-$4.6b Free cash flow A$6-
Slide 16: Press quote on need to re-engineer
For personal use only “ Timidity and slow movement are no longer an option as Telstra struggles to re-engineer itself to meet the “ realities of technological change. Garry Barker, The Sydney Morning Herald, 19 September 2005
Slide 17: Press quotes on Next G network
“ Telstra’s Next G™ network is attracting “ For personal use only users in droves and it has investors and international telcos talking. Lyndal McFarland, The Wall Street Journal, February 2007 “ It took Telstra just 10 months to build its Next G™ high-speed network “ which is the envy of the world.
Slide 18: World leading mobile performance
World leading mobile performance For personal use only 12.3% Mobile Services Revenue 7.2% 3.0% 2.9% 2.1% -0.2% -1.1% -3.3% -4.5% Sp ca st ne lia n Ita m * an e y ro e lia rm ile pe ce N ai Fr ng Eu fon an tu l ni co Au afo Op Te ra KP Ge ob Te s fo a le ng da Or M d le Te Vo Si T- Vo Source: Company
Slide 19: Press quote on neglected networks and IT
For personal use only “ It's about time someone did the hard yards on Telstra's shockingly neglected networks and IT mess. A problem too big to deal with was swept under the carpet and festered, continuing to compromise the “ company's ability to service its customers, develop products and fix its n
Slide 20: Integration: 1-click, 1-touch, 1-command
Integration 1-click, 1-touch, 1-command... For personal use only Email BigPond Music Mobile TV Downloads Photos Search My Account Maps
Slide 21: Integration: any screen, any device, any medium
Integration ...any screen, any device, For personal use only any medium, real-time
Slide 22: Analyst view of Telstra as a media company
For personal use only “ We estimate that, by EBIT, Telstra is already the largest media company operating in Australia. Mobile phone “ technology is emerging as a significant media distribution option. ABN Amro, 22 September 2008
Slide 23: Changing product mix since transformation
Changing product mix since Transformation For personal use only $24.7b +$1.5b -$1.1b $22.2b +$0.4b -$0.2b +$0.2b +$1.7b Mobile Internet Fixed IP & data Advertising Other* access and +5pp to +6pp to -9pp to Directories 26%* 10%* 36%* FY05 FY08 * Percent of Sales Revenues Sales Revenue
Slide 24: Press review of Next G performance
“Telstra’s For personal use only Next G™ - based on performance alone, it’s clear there can be no other choice for mobile broadband... The fact that you can use it basically anywhere makes it perennially useful... we were able to play streaming videos in high quality mode“ with no buffering at all.
Slide 25: Investor comment on new revenue streams
For personal use only “ They're experiencing strong growth and it's coming from the new revenue streams such as mobiles and broadband “ which is what you want to see from a telco in transition. BT Investment Management, cited in the Australian Financial Review, 14 August 2008
Slide 26: World class domestic revenue growth
World class domestic revenue growth For personal use only 4.8% TELEFONICA 2.7% FRANCE TELECOM 2.4% BT 1.2% TELECOM NZ -1.7% TELENOR -2.7% DEUTSCHE TELEKOM -5.8% TELECOM ITALIA -6.5% -8.000% -5.867% -3.733% -1.600% 0.533% 2.667% 4.800% Source: Company reports
Slide 27: Game-changing event, speed and customer experience
For personal use only Game-changing event Game-changing speed Game-changing customer experience
Slide 28: For personal use only
For personal use only