David McIntyre in Sydney | August 18, 2008
TELSTRA chief executive Sol Trujillo says Australia's biggest telecommunications company has many options for growth, including offshore expansion, even if it doesn't build the national broadband network.
"We are interested" in building the broadband network," Mr Trujillo told Sky Business News."I'm the guy who raised the idea in August 2005.
"But if it doesn't happen, our business plan isn't contingent on it."
The federal government has set aside $4.7 billion to help fund the building of a high-speed broadband network to reach 98 per cent of the population, although the total cost may be as high as $25 billion.
"We are interested in doing it under the right circumstances," Mr Trujillo said.
"We have to earn a competitive return, it has to be done in the right sequence and with the right technology."
Telstra executives and board members have said the company wants an 18 per cent per annum return on their investment in the network, if they win the contract. They have also said the company will wholly own the new infrastructure and do not want any change to Melbourne-based Telstra's structure, including splitting the network, wholesale and retail divisions into separate operating units.
Mr Trujillo said Telstra could invest to expand the hybrid fibre coaxial, or cable, network it already had in the five largest cities. Customers already could get download speeds of 30 megabits per second (Mbps) through that network, he said.
Telstra also could spend more money to develop its Chinese business or expand to other countries, Mr Trujillo said.
Otherwise, Telstra could return funds to investors through share buybacks or higher dividend payments, he said.
Last week, Telstra reported an increase in full-year profit of 13.3 per cent to $3.71 billion, missing analysts estimates, after broadband and mobile revenue lifted and declines slowed in its traditional fixed line revenue.
Telstra forecast earnings before interest and tax this financial year to grow six per cent to eight per cent from $6.23 billion.
"We are very focused on delivering," Mr Trujillo said.
"We know how to differentiate, we know how to deliver and we know how to win."
Telstra is three years through a five-year transformation program that involves transferring customers to new computer systems and updating internal networks.
The company said it had moved 3.3 million customers and 4.3 million services to its new IT platform, missing its objective of moving five million customers to the new platform by June.
"We've had one milestone that we've missed out of a few hundred so far," Mr Trujillo said.
Telstra had been very careful to get the transfer right, because changing customer files to the new system was an extremely complicated process, he said.
Mr Trujillo said any economic slowdown was more likely to help Telstra than hurt its earnings.
"In tough economic times, most of us look for ways to save money. Maybe we have to be more mindful of travel and the cost of fuel. So it becomes more practical to use a device to make a video call.
Telstra shares closed last week at $4.42, having fallen 5.8 per cent this year. The S&P/ASX 200 Index has declined 21 per cent in the same time.
AAP