(Case derived from Telstra 2019 Annual Report, Small Caps website and Telstra corporate website)

Telstra is an Australian telecommunications provider. The company had a reported income in the 2019 Annual Report of $A27.8 billion (down 3.6 per cent). Net Profit after tax was $A2.1 billion (down 39.6 per cent).

Telstra has Australias first 5G Network

MOBILE PHONE market share:

Telstra 44% Optus 29% Vodaphone 19% TPG 3%

FIXED BROADBAND market share:

Telstra 51% TPG 22% Optus 17% Vocus 6%

The company created a Telstra 2022 Corporate Strategy with four strategic pillars:

1. Radically simplify the companys product offerings and eliminate customer pain points and create all digital experiences
2. Establish a standalone infrastructure business unit to drive performance and set up options past the National Broadband Network (NBN) rollout.
3. Greatly simplify the companys structure and ways of working to empower employees and better serve customers
4. Make industry leading cost reductions and portfolio management

The company is building up to $A 3 billion of capital expenditure works in the strategy which was announced in 2018 to go forward to 2022 investing in networks for the future and business digitalisation programs.

Over the 2019 annual reporting period the company:

• Simplified its plans from 1800 consumer and small business plans to just 20 in-market core fixed and mobile plans
• Had a 22% reduction to its call centres
• The companys 3.6 % decrease in income was blamed on costs with the NBN network
• The company had a 6% reduction of costs
• Employee numbers were cut by more than 5000.

COVID 19

Since the COVID-19 Pandemic, Telstra has made some adjustments to its original plans above. The company has put a halt to its job reductions and will attempt to focus on a productivity program to reduce fixed costs by $A2.5 billion by June 30, 2022. The company is temporarily pausing the mandatory disconnections of customers from fixed networks under the NBN (National Broadband Network) rollout. This will ensure customers who have not yet moved into the NBN can remain connected. The company has done these measures:

• Created unlimited data allowances on fixed broadband and extra mobile data for Telstra's consumer and small business customers;
• Provided 20,000 students and teachers across the country with internet access to educational content to support their online learning. The company has been working with national State and Territory leaders and companies such as Cisco WebEx and Microsoft Teams to enable virtual classrooms. Telstra is also working with several universities to increase network capacity.
• Launched My Telstra app for both Apple iOS and Google Android designed as a one-stop shop for Telstra. There are a number of self-help videos, self-service billing and technical support options including trouble-shooting guidelines. There have been reductions in contact centres and precautions or even temporary closures of some stores in various States dealing with COVID-19 outbreaks.

ANSWER THESE QUESTIONS:

1. Is Telstra a market leader, challenger or follower? Explain why
2. This is a mature market. What are challenges faced by companies in mature markets?
3. Looking at the information provided here, explain what type of strategy the company is pursuing in this current industry? Link to Week 8 topics.
4. Do you think the post-COVID 19 measures are relevant strategically? Why?