Telstra investors face share price fall unless management puts jobs and broadband first
November 6, 2008
Senior Telstra management’s aggressive and uncompromising stance on the Federal Government’s National Broadband Network (NBN) is putting at risk thousands of jobs for Telstra workers and could lead to a $11.9 billion drop in the company’s value, say unions.
Unions today distributed a research report to shareholders attending the Telstra Investor Day briefing in Sydney calling on the company’s senior management to change its direction.
The ACTU-commissioned report warns that Telstra management is jeopardising the company’s future and is playing a ‘dangerous game of brinkmanship’ by threatening to walk away from the NBN tender.
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.
ACTU Secretary Jeff Lawrence said:
“Telstra management has again threatened to walk away from the broadband tender.
“Telstra’s Chief Financial Officer John Stanhope warned this week the company will not bid for the broadband network unless it is guaranteed a favourable regulatory framework that delivers an exorbitant 18% rate of return.
”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 and that it adopts a more co-operative and constructive approach to its relations with all stakeholders, including the regulators.
“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.
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2 Responses to “Telstra investors face share price fall unless management puts jobs and broadband first”
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Why can’t Telstra just do the right thing? Why is it so hard for them to actually work with staff and their unions to finalize an agreement? Afterall Telstra staff keep voting for a collective agreement instead of a non-negotiable non-union agreement!
Come on Telstra - look after your workers and our broadband!
What rights? I was forced to take a redundancy (if I didn’t take it I would be fired) against my wishes after work place harassment from my Team Leader. My Level 5 backed my Team Leader and the Union was too slow to respond and assist me against this Corporate Bullying.
I was let down by both Telstra and the Union so I was left alone with no job 5 months short of my 10 year anniversary at the Company.