Telstra chief flags Asian push

Telstra CEO tells shareholders Asia's growing middle class will provide telco with opportunities for growth and expansion.

Telstra Corporation (TLS) chief executive officer David Thodey says the rise of Asia’s middle class will create an enormous appetite for quality goods and services in the region and the telco will be aggressively pursuing opportunities to capitalise on the increased demand.

Addressing shareholders at the group's annual general meeting, Mr Thodey said Asia’s rise was creating opportunities for Telstra to expand its footprint across Asia, and would help Australian, European and American companies make the leap into Asian markets. 

"That’s why we are making strategic investments across Asia, such as new data centres in Singapore and cloud-enabled nodes in Singapore and Hong Kong," he said.

"We have also enabled our Hong Kong customers to access Telstra 4G mobile services while visiting Australia and our Australian customers to access CSL 4G mobile services while visiting Hong Kong."

Mr Thodey said the telco was expecting continued growth in fiscal 2014, forecasting low single digit total income and earnings before interest, taxation, depreciation and amortisation (EBITDA)  growth, with free cashflow between $4.6 and $5.1 million.

"We expect capital expenditure to be around 15% of sales as we continue to build out our 4G mobile network and complete the build of the NBN transit network," he said.

Thodey addresses job loss concerns

Mr Thodey also sought to address the recent changes at the group's contact centres, an issue he said many people ha draised with him.

"There are two aspects to this question – firstly, the issue of off shoring work and, secondly, the issue of the quality of the service you receive from offshore contact centre consultants," he said.

Mr Thodey said contact centre work in general was declining because customers increasingly wanted to contact the telco through online channels.

"Forty per cent of customer transactions were completed online in 2013 – compared to only 30% in 2012 – and this percentage will grow again this year," he said.

Chairman Catherine Livingstone also prepared a statement on the restructure of the group's operations business unit, in response to media reports and pre-asked shareholder questions.

"The size and nature of our workforce is re-balancing to reflect the fact that some parts of our business are reducing in size, while other parts are growing," she said.

"We are responding to the changing market structure, including the establishment of the NBN, and changing demand for our fixed line services.

"So while we have proposed that, in our Operations workforce, certain roles will reduce by around 1,100 jobs by June next year, we have made other announcements recently that could result in close to 1,000 jobs being added by Operations in other areas."

Change to NBN may change agreements: Livingstone

Ms Livingstone also told shareholders a move by the Abbott government to predominantly use fibre to the node in the rollout of the national broadband network  could result in the renegotiation of some aspects of the company's existing agreements.

"In the meantime, Telstra will continue to fulfil the obligations set out for us in the existing agreements, and continue to work constructively with the government and NBN Co. and in the best interests of our shareholders," she said.

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