Tough Aussie operator takes fixed line

Sol Trujillo, on a flying visit to Wellington to meet staff and customers. Picture / Mark Mitchell

Telstra chief executive Sol Trujillo has generated a reputation as a tough operator by butting heads with the Australian Government over regulation and board appointments and by stripping thousands of jobs from the company.

But yesterday in Wellington there was little sign of abrasiveness as he downplayed the notion that his first visit here since he became Telstra boss had much to do with the more favourable environment for subsidiary TelstraClear under the shakeup of network regulation the Government proposed in May.

Instead, his one-day visit was about reviewing TelstraClear's operations and meeting staff and customers, something he likes to do "periodically over all of our businesses".

He did not meet any government representatives, and despite Telecom buying about A$500 million of wholesale services from Telstra each year, he also has yet to meet Telecom chief executive Theresa Gattung who, ironically, was in Australia yesterday.

Trujillo said the Government's move to open up Telecom's copper wire local network to rivals looked like great news for TelstraClear.

Although the ultimate shape of regulation was uncertain, "obviously we believe that creating a level playing field is a good policy".

It would encourage more investment and a better infrastructure environment because companies like TelstraClear "can compete even more robustly than they do today ... There's an opportunity to do even more with the right environment, the right competitive structure".

In New Zealand a plan to spend $50 million on a high-speed mobile and data network in Tauranga, with the possibility of a wider introduction of such services, has been the recent feature of TelstraClear's investment plans, but Trujillo said the company's opportunities now lay "primarily in the fixed line world".

Should the new regulations meet expectations, "there can be even more investment, bringing more broadband and accelerating broadband with interesting features and services, like we do in Australia".

He believed Telecom was getting an easier ride from Australian regulators than TelstraClear was getting in New Zealand.

But it's safe to say Telecom would like an easier ride from Telstra in Australia, where the prospects of its disastrous AAPT investment depend largely on the prices and terms it can negotiate for the purchase of wholesale services from Trujillo's much larger incumbent.

Sol Trujillo

* Left regional American telco US West in June 2000 after 26 years with a US$72 million golden handshake when it was taken over by Qwest.

* Nov 2000-late 2002: Chief executive and chairman of San Diego high-tech firm Graviton, which collapsed after he left.

* March 2003-April 2004: Chief executive of European mobile giant Orange. Boosted the company's revenue by 10 per cent but copped flak over the divestment of its Thai joint venture.

* July 2005: Since taking over as Telstra's chief executive more than A$16 billion has been wiped from its value but he has still pocketed A$8.7 million in remuneration, including a A$2.6 million bonus.