Trujillo to step down from Telstra

trujillo

Sol Trujillo Quits Telstra

Sol Trujillo, the colourful frontman of Australian carrier Telstra, is to step down on June 30 and return home to the US.

Trujillo did not give a reason for his departure, but his four year tenure as chief executive of Telstra has been marked by controversy, mainly over the country’s proposed nationwide fibre network.

The Telstra CEO has continually butted heads with the Australian government regarding plans to roll out a next generation broadband infrastructure. Late last year, Telstra and its biggest rival Optus lodged bids for the rollout of the nationwide network designed to bring broadband connectivity to at least 90 per cent of the population.

The bids marked the next stage of a multi-billion dollar investment in the country’s infrastructure that has been continually delayed by political wrangling. But more delays lay ahead, with Telstra putting the ball back in the government’s court by submitting a non-compliant proposal for the build out.

Under the incumbent’s proposal, Telstra would invest up to A$5bn of its own capital and the government would provide A$4.7bn in the form of a concessional loan. The proposed fibre network would cover up to 90 per cent of the population and would be capable of providing downlink speeds between 25Mbps and 50Mbps in 65 per cent to 75 per cent of the footprint, with downlink speeds of between 12Mbps and 20Mbps in the remainder of the footprint.

This proposal differed slightly from the government’s initial request, which asked for speeds of at least 12Mbps to be delivered to 98 per cent of Australian homes. The original price was expected to extend to about A$8bn, but in mid-2008, Trujillo commented that a A$14bn price tag now seems more likely, and in light of the global economic crisis, may be higher still.

But the more controversial aspect of Telstra’s proposal was that the company’s bid is tied to assurances that the government will seek no further separation of the operator. Telstra’s rivals, including Optus, have been calling for the government to split Telstra’s network business from its retail and wholesale arms in a bid to promote competition.