THE DISTILLERY: Sol searching

The commentariat performs a backflip on the legacy of Telstra's recent leaders, and there are suggestions National Australia Bank is catching up in tech.

No company has had to deal with more regulatory uncertainty or annual shareholder meeting outbursts in the last decade than Telstra Corporation. The takeaway from two commentaries this morning is that Australia’s largest telco has actually had two remarkable chief executives guiding it through that period.
Fairfax’s Elizabeth Knight argues that the legacy of former Telstra chief executive Sol Trujillo is improving by the day.
"Only three years ago it looked like he had blown up billions of dollars of Telstra shareholders' capital. But a lot has changed since then. The juicy compensation payments that the government is now paying to Telstra shareholders is the primary reason the company's shares have strongly outperformed the market. The other reason Trujillo's Telstra reign should be celebrated today is that he created a mobile network that was vastly superior to its competitors. While Optus and Vodafone are struggling to grow revenue in the mobile market, Telstra (for now at least) is still managing to do so.”
Let’s not forget the swathe of commentaries about Trujillo’s mad idea that people would place such importance on mobile phone internet access. Ha, what an idiot!
As we’ve since discovered, the new battle is over content. The Australian’s John Durie explains how Trujillo’s successor David Thodey – who leveraged his experience as managing director of government relations to repair the telco’s relationship with Canberra – has lined the company up to the leading provider of content in the telecommunications industry.
"The Telstra rivals have won the battle to split Telstra's control of the fixed-line infrastructure, but in the process the behemoth is making out like a bandit with transfer fees, and is wisely using the money to buy content rights, among other things. The argument is, if David Thodey is the gatekeeper to watching the AFL or NRL then he has erected enormous power and barriers to entry. Arguably, the AFL can seize back that power when the present rights expire, but it will be a big move because its choices, such as direct rights sales to individual consumers, contrast with the mass distribution available through free-to-air and Foxtel. The NBN will make it easier, but Foxtel is already there.”
Meanwhile, The Australian Financial Review’s Chanticleer columnist Tony Boyd explains how Commonwealth Bank of Australia still has the greatest technology footprint of all the major banks (it’s a topic he’s written on many times before). But, after some hiccoughs, National Australia Bank is finding its feet.

"After years of investing in its core banking systems, NAB is now showing that in certain areas it can leapfrog CBA, which is widely regarded as the bank with the most advanced technology systems. This face-off has implications for the entire banking sector because it is a test of the ability of a financial institution to integrate multiple products on one interface. It involves offering the latest mobile applications and harnessing the power of social media to build market share. NAB is challenging CBA’s technology leadership in a manner that is deliberately designed to cause it pain. By using the latest online platform technology, it is lowering the cost of doing business by at least 25 per cent and passing that on to customers. CommSec knows it must respond and it will, but that will involve spending millions.”
Meanwhile, Fairfax’s Adele Ferguson relays reports from The Guardian and the Financial Times that the European Union has backed away from imposing mandatory quotas for female representation on company boards, thanks largely to objections from Britain.
This issue is on the table in the western world in a big bad way, where it’s going to stay. But the arguments are like any criteria imposed on advancement. The proponents argue it’s the only way to encourage diversity, while critics contend that it’s unworkable and undermines the integrity of the system.
The Australian’s Asia Pacific editor Rowan Callick suggests that the new leader of the Chinese communist party might not matter so much. The party’s members are part of factions that realise its in their long-term interest to stick together, or they all fall down.
Beyond sticking together, writes Callick, they need to reform the party because old practices that got them this far won’t carry them through the next stage of economic and political development.
The Australian’s Robin Bromby runs through three scenarios that the coal sector is most likely to face to 2025. None of them could be considered bullish.
Elsewhere, Fairfax’s Michael West touches base again with corporate-analyst-turned-cattle-farmer Bruce Robertson, concerning his fight with Grid Australia that the writer describes as a "quintessential” case of corporate bullying.
And finally, The Australian’s demographics watcher Bernard Salt looks at the shifting preferences of Australians when it comes to getting to work, with some compliments for the ones that use their legs by walking or riding.

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