Telstra chases growth curve

On the back of positive half-year results, Telstra said today that it was targeting revenue growth of five percent, striving to improve service quality and looking for further opportunities in the mobile and broadband market.

After outlining his review of Telstra's fiscal first half earnings -- which included an after-tax profit of almost $2.3 billion -- CEO Dr Ziggy Switowski said he doesn't expect business and government customers to boost the company's growth. He said although this sector accounted for around a fifth to a quarter of Telstra's business, these customers increasingly demanded discounts from vendors.

“Lately there has been renewed commentary and interest in IT&T, but no invigorated commitment to spend more money. Budgets are held tight, discussions with telcos are very aggressive, the focus is on improved service.

“Our view is that in the long term in our industry; consumer growth is very attractive; SMEs are comparable and attractive. Corporate and government growth is the most complex, most price competitive, arguably the most exciting, but we'll be lucky to get zero to one percent growth for some time.”

Looking ahead, the Australian telecommunications giant forecast revenue growth from the company's key mobile division in the current second half ending 30 June, 2004. Switowski would not outline how the company would improve its mobile revenue, saying “we do not telegraph our punches”.

Telstra also hoped to achieve a domestic growth rate in line with industry growth within two calendar years and to meet its $800 million cost reduction targets on the same timetable. On customer service, Telstra said performance was improving with Six Sigma projects, yet Switowski said there was still “lots of work to be done”.

Pointing out that all industry watchers could serve up examples of poor Telstra service, Switowski said Telstra had a long history of customer service.

“However one percent of the time we really do a bad job. That can mean 1,000 times a month. That's too high,” he said. “We're looking at narrowing that and reaching 100 percent service delivery. Are we close? No, we're not. Are we, as a telco on global scene, good at delivering service? Yes, we are.

“We are as solid as a rock. We are not dismissive of challenges in the future, but remain upbeat about ability to compete with challenges to enhance and retain our position in an increasingly competitive market,” Switowski said.