Telstra will become Sol less at the end of June

On the 30 June, Telstra CEO Sol Trujillo will leave the company and return back home to the US.

Donald McGauchie, chairman of Telstra, said, Trujillo and the telco's Board agreed that now was a suitable time for a transition to a new CEO given Telstra's transformation is well advanced and on track.

The Board, through its nomination committee, is prepared with succession planning and will now formally commence a wide-ranging search for a suitable successor.

It expects to make an appointment by 30 June 2009.

"On behalf of the Telstra Board I would like to congratulate Sol on his outstanding leadership and extraordinary achievements," McGauchie said.

"His vision, strategic direction and commitment to execution have positioned Telstra as a media communications company with a wide range of options for ongoing growth.

He claimed, under Trujillo's leadership, Telstra has significantly outperformed the market and its global peers, producing world-leading results within the telecommunications sector.

"The Next G network is undeniably the world's best national mobile broadband network and stands as Sol's crowning achievement," said McGauchie

Trujillo thanked the Telstra Board and the company's employees for their strong support and commitment since his arrival in July 2005.

He said he would continue to drive the business until his departure at the end of June and work with the Board and senior management to ensure a smooth transition.

"I would particularly like to thank my senior management team and Telstra's employees who are truly committed to bringing world-leading services to our customers. The results we have achieved together over the past four years make me incredibly proud," Trujillo said.

The announcement comes off the back of the telco's latest financial results.

According to Telstra, it has had strong first half result with free cash flow growing by 44 percent to $1.9billion, while also continuing to outperform domestic and global peers in key products and segments.

However, in fiscal 2009 Telstra results are affected by reduced calling volumes, as people manage their usage down more than expected in the deteriorating macro environment. Also, there have been one-off costs such as the Victorian bushfires and Queensland floods, meeting higher customer contacts into call centres and the accelerated roll-out of our T[life] stores.

The telco continues to expect revenue growth in the range of 3-4 percent this year, it now expects EBITDA growth in the range of 5-6 percent (previously 6-7 percent) and EBIT growth in the range of 3-5 percent (previously 6-8 percent).

All other guidance measures remain unchanged. As made clear in recent months, guidance is unaffected by the National Broadband Network process.

At the product level, Telstra achieved mobile services revenue growth of 12.4 percent to $3,066 million. We added 371k new SIOs, of which 284k were postpaid services.

At the end of December, the wireless broadband SIO base reached 828,000, which it believes is close to 50percent of the total market.

Retail broadband revenue in the half was $1,204 million, up 31.3percent year-on-year. The number of customers on high-speed broadband plans (20Mbps or more) more than doubled to 200,000 helping ARPU increase 6.1 percent.

IP and data revenue growth accelerated to 10.7 percent, driven by a 28.2 percent increase in IP access revenue to $323 million world-class growth resulting from Telstra's investment in cutting edge technology.

In terms of costs, total operating expenses (before depreciation and amortisation) grew by 1.7 percent to $7,428 million. Accrued capital expenditure declined $246 million or 10.6 percent in the half to $2,074 million. We invested $530 million - a decline of 16.4 percent - to complete the first release of the IT transformation.