Aussie telco urged to fight separation 

Source: ONE NewsTelstra mobile phone

Telstra shareholders have urged the Australian telco to stand up to the federal government's plan to split its business and to withdraw its support for a national broadband network (NBN).

In a three-hour-long question and answer session at Telstra's annual general meeting on Wednesday, retail shareholders voiced their opinions on the legislative reforms, executive remuneration and Telstra's customer service.

Fronting his first annual meeting as chief executive, David Thodey repeated that his main focus is on improving customer service.

He also said Telstra remained "positively and constructively" engaged with the government on the NBN, but was unable to promise that a mutually accepted agreement would be reached.

Legislation currently before parliament seeks to split Telstra's wholesale and retail businesses with the aim rolling out the $AU43 billion NBN in an evenly competitive marketplace.

Telstra has previously indicated it would consider selling assets to the NBN at an acceptable price and focussing on its retail operations.

But shareholders who spoke at the meeting were unanimously opposed to Telstra's separation, saying it would destroy shareholder value.

Shareholder Terry Jackson described the process as "the theft of our assets by an autocratic government".

He said Telstra should ignore the government's separation proposal, and the NBN.

"I think we should let them die on the vine," he told the meeting.

"I think that it's an absolute disaster for the country, for the taxpayer if they ever get stuck with the bill. So please don't do anything to assist them, don't vend any of our assets."

Telstra was being punished for its success, another shareholder said, while others launched personal attacks on Federal Communications Minister Stephen Conroy.

"As far as that fellow who is trying to bring on this broadband, he's obviously got some problem," one shareholder said.

Telstra's board did not comment on the progress of its talks with the government, although Chairman Catherine Livingstone hinted it would be a long process.

"The details of any arrangements are not even close," she said.

"We are working through very complex discussions and if you think about the concept of rolling out the network as proposed it's going to take up to eight years."

The recent accidental tabling of confidential documents related to the matter by Senator Conroy in the Senate had not caused any damage as they were "not relevant to the NBN discussions so there was nothing to infer or conclude from that information", Livingstone said.

Meanwhile, more than 98% of shareholder votes were cast in favour of Telstra's remuneration report for the 2008/09 financial year, which included a $9.06 million package for former chief executive Sol Trujillo, who departed in May.

However, several shareholders voiced their concerns about Trujillo's pay, with Australian Shareholders Association representative Michael Perry describing his final pay packet as "excessively generous in both terms and quantum".
 
"Whilst it may have been to the letter of the contract, it was simply far too much," Perry told the meeting.

In her opening address Livingstone said Telstra had frozen the fixed salary of its directors for the current financial year and reduced short-term incentives.

She also thanked recently departed board members Donald McGauchie, who was chairman, and Peter Willcox, and outgoing director Charles Macek, for their years of service - but made no mention of Trujillo.

Thodey reiterated Telstra's guidance for low single digit growth in revenue, earnings before interest, tax, depreciation and amortisation (EBITDA) and EBIT in the current financial year.

Telstra shares closed up one cent at $3.23 on Wednesday.