Telstra shareholders who turned out for the industry giant's AGM today, were told in no uncertain terms that Telstra had no ambitions to perform on the global telco stage. Its sights however are "focused absolutely" on Asia.
"We do not aspire to be a global telco," CEO Ziggy Switkowski said, but "we are serious about being an Asian-based regional player," he added.
"Our relationship with Pacific Century CyberWorks (PCCW) and Hong Kong Telecom exemplifies our long-term commitment to that area."
The PCCW deal has spearheaded the Aussie telco's move into Asia, Switkowski said and Telstra will now look to partner with other companies of Pan-Asian character. In fact, over the next five years 20-25 percent of Telstra's value is expected to come from its Asian businesses, according to Switkowski.
Whilst Switkowski acknowledged the stockmarket's focus away from telecommunications stocks, he pointed out that Telstra's share performance is in line with other global telcecommunications players. Telstra shares have dropped 15 percent in the last 6 months, whilst US telco shares have fallen on average 20 percent and 21 percent in Europe.
The long-term value potential of Telstra was never more apparent than during the latest round of Telstra-2 (T2) share instalments, when 99 percent of T2 shareholders bought the second instalment, Chairman, Bob Mansfield claimed.
"There is no doubt that Telstra is in good shape," Mansfield said, comparing the AU$3,500,000 billion one-off Olympics budget with Telstra's AU$4 billion average capital expenditure per annum.
"Telstra's commitment to Australia compares to a Sydney Olympics every year," Mansfield added.
On the full privatisation issue Mansfield said, "I believe the privatisation of Telstra is a matter not of if but when."
Switkowski agreed, saying that the telecommunications market would be driven by competition not regulation.
It's time "outdated regulations" are wound back as competition becomes more entrenched, Switkowski said.
Switkowski said that in the first four months of the 2000/2001 financial year, revenue growth was similar to that of the previous year.
"In the first four months of this financial year, our revenue growth is similar to last year's and profit margins, aggregated across all our businesses, remain strong," he added. This leaves Telstra "well placed to move with confidence into the world ahead," he said.
The CEO said that Telstra was committed to improving the telephony services of its 3 million regional and rural customers and of Telstra's one million online customers, "this is only the start".
"We're broadbanding Australia and have already launched ADSL."
The telco predicts that within two years, 90 percent of Australians will have ADSL Internet access and predicts it will connect 1 million broadband customers over the next five years.
With 50 competitors in the Australian telcommunications arena and an industry that is set to grow at about 10 percent per annum - well ahead of GDP growth - "Telstra will capture a significant amount of this growth," Switkowski said.
