Saturday, May 09, 2009

What do you do with a BA in English

The musical Avenue Q opens in Melbourne in June. One of its songs is What do You Do With a BA in English.

A few years ago I introduced David Thodey at a conference and noted that the answer was "become a GMD at Telstra." That has now become "become CEO of Telstra".

Meanwhile outgoing CEO Sol Trujillo has written his own veledictory for the Smage. He claims "many people forget how Telstra's critics described it before I arrived: timid, bureaucratic, slow-moving, indecisive and siloed." He goes on to claim that his legacy has been "to transform, rewire, and unwire the company with fixed and mobile investments, Telstra has improved growth and boosted productivity while improving network quality and employee engagement." Finally he claims "we have created a New Telstra — one that is competitive, differentiated, innovative and continually enhancing the customer experience."

There is much to dispute in all this. One of the biggest remains how much of the "transformation" really amounts to innovative or market genius versus how much relates to the decision to prosecute the exercise of market power for all its worth. What Sol describes as being "regulatory focussed" was the previous policy of recognising that excessive use of Telstra's incumbent position will merely bring bigger and more severe retribution.

And this is indeed what has come to pass. There is no doubt that underlying the Rudd Government's broadband plans remains a core purpose of dealing with the structural issues in the industry. Stephen Conroy repeated this as recently as last Thursday at a Paull Budde roundtable where he said he wanted to redress the errors of twenty years of policy by both sides of politics.

This was the point the strategies of previous Telstra management had sought to avoid. I am fascinated by the fact I didn't see it would happen. I used to debate with Telecom NZs Teresa Gattung as far back as 2001 how Telstra management would behave once privatised. Theresa said they would go completelt feral, whereas I said that they wouldn't because it would be a short run play at best.

In the end she was right and I was wrong. The process started earlier than the full privatisation though because once the coalition had control of the Senate in 2004 the full sale of Telstra was effectively a "done deal". In the long run though I was right, it has been a flawed short-run strategy. And Theresa herself fell on her own version of brinkmanship with the New Zealand government.

In an article headed Trujillo takes one last swipe at critics Matt O'Sullivan quotes Sol as saying "I'm going to go and spend some time with my parents … and children because I have been gone for six years out of the US. That's my first priority." Given that Matt has pursued Sol endlessly on exactly how little time he actually spent in Australia, I was disappointed that he let that comment go through to the keeper.

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