There is further proof of the perilous state the IT&T industry with Telstra issuing a warning that it would suffer a steep decline in its revenue growth - for the first time in its recorded history.
The telco estimates revenue growth in the current half-year will be at just one percent, compared to five percent in the first half, leading to a shortfall of AU$400 million.
Telstra CEO Ziggy Switkowski said a number of factors were weighted towards the loss in revenue, including general economy issues.
However, Switkowski says the company could contribute a quarter of its losses to the ACCC's decision to lower wholesale prices, which he slated as 'irrational'.
-Competition and pricing has been quite fierce,"
-Further effects have been intensified by pricing in the wholesale area," Switkowski said.
When quizzed on whether further job cuts would arise from its current financial status, Switkowski said, -the focus on reduction and productivity improvements means re-issuing processes and revisiting how we manage our employees".
The company, however, -has not put in place any new headcount targets," he added.
Another contributing factor to Telstra's profit loss is its provision of One.Tel's bad debt of AU$36 million, which Switkowski believes will be a good investment in the long run due to the customers it acquires from the insolvent telco.
On a more positive note, Telstra believes the industry as a whole will resume attractive growth next year, once the knock on effects of the dot com crash has subsided.
-We expect to be back at historical growth by this time next financial year," Switkowski said.
Telstra claims priorities the company has put in place still remain intact, regardless of its AU$650 million cost cuts over the coming year.
-We're still confident about the growth from broadband, wireless, wholesale, and our international expansion. Regional Australia will still get a proper focus of attention," Switkowski said.
I was surprised when I got a phone call from MobileNet on my One.Tel mobile phone number. I asked them how come Telstra just barged in and got all the One.Tel business. They said an arrangement had been made till 24/6/01 when One.Tel numbers would be disconnected unless they signed with MobileNet. Pretty aggressive!!