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Telstra cites investment model

By Samantha Broun for CNN

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Telstra CEO Sol Trujillo says he expects strong broadband growth to continue.

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Australia
Telstra Corporation Limited

SYDNEY, Australia (CNN) -- Government regulations will be the key factor in determining future investments, Australia's largest communications company, Telstra Corp, said Thursday.

Telstra has said regulatory constraints could cost it more than Aust. $850 million in the current financial year.

"What we're looking for is more freedom to be able to compete," Chief Executive Sol Trujillo said at a press conference in Sydney.

"We will target investments to where we can create value for our shareholders and limit those that lack shareholder safeguards, such as the fiber-to-the-node access network," Trujillo said.

He said Telstra's revenue priorities will focus on Internet and Internet Protocol (IP) services from both fixed and wireless broadband, its Sensis directory assistance service and on staying competitive in the mobile phone market.

Telstra posted strong growth in the Internet and mobile market in the December 2005 half, with Internet revenue up 42 percent and mobiles up 4.6 percent.

Trujillo said Telstra had outpaced rival SingTel Optus in broadband growth by 4-to-1 in the first half.

"So you can see we've had a very aggressive growth rate. My expectation there is that will continue," Trujillo told reporters.

But Trujillo said revenue from Telstra's fixed-line operations was continuing to fall as consumers switch to mobile and the Internet.

Telstra is being prepared for full privatization of the government's remaining 51 percent stake, starting later this year with a staged selloff that ultimately is expected to raise about $20 billion.

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