TELSTRA has turned its back on the tumultuous Sol Trujillo era, choosing a peacemaker as its new chief executive as it is forced to adapt to a new telecommunications landscape.
The Age can reveal that David Thodey, the head of the company's government and enterprise division, will be unveiled as early as today as the man who will steer Telstra through an uncertain future.
It is believed that Perth-born Mr Thodey was chosen yesterday at a board meeting, narrowly beating out chief financial officer John Stanhope, a 40-year veteran of the company.
Mr Thodey, 54, is described as urbane and articulate, and is rumoured to have been the preferred candidate of the Future Fund - which, with 16 per cent of Telstra's shares, is its largest shareholder - and the Federal Government. Analysts and former colleagues have also sung the praises of Mr Thodey, who is a former chief executive of IBM's Australia and New Zealand operations.
His perceived popularity with the Government could be vital as Telstra struggles to maintain its dominance over Australia's telecommunications industry. The announcement that the Government would take a majority stake in the proposed national broadband network (NBN) gave Telstra a severe shock.
That announcement last month was accompanied by a discussion paper in which the Government canvassed a suite of tough regulatory changes that could be imposed on Telstra, including a separation of its retail and wholesale arms and the forced divestiture of some assets.
The combative stance of Mr Trujillo and Telstra chairman Donald McGauchie led to Telstra's ejection from the NBN tender process after they submitted a non-conforming bid late last year, a miscalculation that has wiped billions of dollars off the company's market value.
There have also been reports that Future Fund chairman David Murray has applied pressure to the Telstra board over the rancorous relationship with the Government and the company's falling share price, which has cost the fund about $2 billion since December.
The appointment, the climax of weeks of speculation, casts doubt on whether Mr Trujillo will actually stay on until June 30, the date named for his departure when it was announced earlier this year that he was leaving after four years at the helm.
In an opinion piece published exclusively in The Age today, American-born Mr Trujillo defends his performance at the helm of the company, which was radically reshaped on his watch.
He says the company has "improved growth and boosted productivity, while also improving network quality and employee engagement".
Mr Trujillo points to the implementation of Telstra's Next G mobile broadband network as one of his crowning achievements, and vigorously defends the company's controversial IT transformation, which has been dogged by reports of cost blow-outs and angry customers.
"Remember, this very complex, integrated transformation program was put together in a short, two-three month period after I arrived," Mr Trujillo says.
"Some parts have come in under budget and some have been over, but overall there has been no cost blow-out. In fact, we are within 2 per cent of our original overall transformation costings, despite the significantly increased scope of the transformation."
More controversially, Mr Trujillo mounts a defence of his handling of the NBN debacle, which left him and Mr McGauchie fighting accusations of arrogance and poor judgement.
"Our responsibility toshareholders extends to our perspectives on the NBN. ... We could have agreed to many things that might have generated positive headlines but ultimately destroyed returns and long-term value,'' he says.
Mr Thodey will now face the challenge of moulding Telstra in his image. Even before he was named, one observer close to
the company said it was essential that he dismantle Mr Trujillo's legacy.
"He's a diplomat, Thodey, and he'll probably wait until Sol has left the building before he starts wielding the new broom,'' the observer said.
"But the challenge for him is to step up and eliminate a few people who have swallowed Sol's line hook, line and sinker, and are probably just as culpable in stuffing things up.''
