Radical changes coming to Telstra: Less plans & less staff

The headlines today will read that Telstra are slashing 8,000 jobs – which is a big part of their plan – but it’s all part of a much wider revamp of the company as it heads toward 2022 and the most competitive time in its history.

Announced to the Stock Exchange this morning, Telstra CEO Andy Penn has outlined a strategic change in direction for the business, with four key areas of focus.

1. Simplify Product offering & eliminate customer pain points
2. Establish a standalone infrastructure business
3. Simplify their corporate structure, and;
4. Cost reduction program

Make no mistake about it, it’s a huge undertaking for the Telco giant, and given the state of their share price in recent months and years, much needed – but I’ll leave that to business analysts to outline.

It also comes at a time when CEO Andy Penn is under increasing pressure, with NBN chipping into their customer numbers, and the above share price woes – there’s speculation his time is almost up with outgoing NBN CEO Bill Morrow slated as a leading candidate for the role.

So what’s it all mean.

For consumers they are reducing the number of plans on offer from almost 2,000 down to just 20 core plans.  That’s a huge deal given the complexity of their plans today.

There will also be “no more complex bills” and an elimination of “charges for excess data” in what Telstra is describing as an industry leading approach.

This kicks off next month with what they describe as plans with “All the data you need without the worry” which sounds like a bigger toe in the “unlimited” waters, though as we know they won’t be marketed that way after the ACCC got involved.

Customer service “should” improve over this strategic 2022 period, with a move to “effortless digital service”, as well as a likely benefit from the reduction in management levels – though the 8,000 job losses could be detrimental to their ability to actual offer great customer service – we’ll have to wait and see on that one.

On the business side of things, a new company called “Telstra InfraCo” will own all the core network assets.  Interestingly this excludes the mobile network (including backhaul), but includes all the other network backhaul, HFC network, Fibre Network, Undersea cables, datacentres and more.

The plan is for this to be a business they could separately sell or list on the stock exchange in an NBN connected world.

All that will be implemented by June 2019.

While there will be 8,000 less staff and contractors, there will also be 25% less executives in middle-management – creating a leaner business with 1,500 new roles in “critical capability areas”.

This is radical, big change for Telstra – at the consumer end, in Mobile in particular, we’ll have to see what these new-look plans are and how easy they are to understand.  At the face of it, they’re on the right track.