Overview:

The Telstra results were not well-received by the market. However, they came as no surprise to BuddeComm, as we have been predicting this for some time. The company has finally embarked on a serious transformation process and this will take a few years. During that period revenues could further decline or, at best, remain static. Margins and profits will most certainly fall as the company embarks on a serious competition drive.

However, it has now clearly set its eyes on the future and, with clear goals in mind, will move in a far more focussed direction; under such circumstances Telstra is a force to be reckoned with.

There are two separate issues here. How will the company perform in the transition period over the next few years, during which time revenues and profits will remain under pressure, competition will be fierce, and users will be less loyal than ever before? And how well will the company perform in the new areas it needs to develop within a totally changed environment? We report on the first positive signs in this direction.

1. Synopsis
2. Angry investor’s reaction
2.1 Investors were ignorant
2.2 Telstra could never deliver on investment promises
2.3 Flawed strategies from the very beginning
2.4 Investors believed the fairy tale
2.5 Telstra now on the right track
2.6 What’s the alternative?
3. Analysis and comments on the results
3.1 Telstra paying for previous mismanagement
3.2 Winning customers back – but lower ARPUs and profits
3.3 Commoditising market
3.4 the market moved on while Telstra was gaming the system
3.5 Now Telstra is moving on
4. Background
4.1 Telstra in Transition
4.2 Company Overview
4.3 Telstra and the NBN
4.4 NBN – Industry at crossroads

Table 1 - Headline statistics – Telstra results 2010
Table 2 – Key statistics fixed products – Telstra results 2010
Table 3 - Key statistics mobile products– Telstra results 2010
Table 4 – Telstra Group total revenue – 1994-2010