Telstra management is putting jobs and broadband investment at risk

October 27, 2008

Senior Telstra management’s aggressive and uncompromising stance on the Federal Government’s National Broadband Network (NBN) is putting at risk $11.9 billion of shareholder value and could cost thousands of jobs for Telstra workers.

In a research report sent to Telstra’s institutional investors this week, the ACTU warns that Telstra management is jeopardising the company’s future and is playing a ‘dangerous game of brinkmanship’ by refusing to guarantee the company will tender for NBN.

The report highlights an analysis by Merrill Lynch and Citigroup which recently identified non-participation in the building of the National Broadband Network as the biggest financial risk to Telstra in the future.

Citigroup have estimated a value erosion of $11.9 billion from the company - a loss of almost $1 per share - if the company lost broadband customers and network contracts.

The ACTU report has been prepared ahead of the telco’s annual general meeting in late November.

ACTU Secretary Jeff Lawrence said:

“Telstra management has threatened to walk away from the broadband tender, warned they will not bid unless they can be assured of an exorbitant 18% rate of return, and is refusing to compromise on key aspects of the project.

“This aggressive and hardline approach is unacceptable. It is putting the long term interests of Telstra shareholders and the jobs of employees at risk.

“The National Broadband Network will be a crucial part of Australia’s infrastructure for the remainder of the twenty-first century.

“It is essential that Australia’s biggest telecommunications company is involved in the tender.

“The combative stance by Telstra’s senior management has the potential to cause a breakdown in relations with the Government, the industry regulator as well as its staff and customers.

“Telstra should move to repair the damage it is causing by adopting a more co-operative and constructive approach to its relations with all stakeholders.

“We believe that a new direction is required on the part of the leadership team in order to protect the long-term interests of both Telstra employees and shareholders.

“The company should abandon its hardline approach to the broadband tender and also drop its aggressive posture to dealing with Telstra employees.

“Institutional investors as well as the Federal Government will want to reduce all of the risks associated with a multi-billion dollar project such as this and so it will be essential for the successful bidder to have a stable and secure enterprise agreement in place,” Mr Lawrence said.

Written by TelstraUnions · Filed Under News 

Comments

One Response to “Telstra management is putting jobs and broadband investment at risk”

  1. payup on November 1st, 2008 3:09 am

    enuf ramblings, putup,shutup I want my fucking payrise

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