Switkowski sees top line revenue growth trend of 5pc
Wednesday, March 7, 2001, 14:10
AAP
Telstra chief executive Ziggy Switkowski said he expects trends for top line revenue growth to be around 5 per cent for a little while.
“That will be the trend for a little while until some of the new businesses kick in in a material way,” he told reporters.
Earlier, in a speech, Switkowski said the natural market for Telstra to expand internationally is Asia, because the company is part of the fast growing AsiaPacific region.
He said Telstra's alliance with Richard Li's Pacific Century CyberWorks in Hong Kong would make Telstra a serious player in Asia.
“This won't transform the identity and character of Telstra but it will make us a serious Asianbased regional player with a powerful domestic franchise,” he said.
“We do not aspire to becoming a global telco but we are determined to be a focused, strong Asian based regional one with international relevance and global reach, while still setting the pace at home.”
As well, Switkowski said the deal positions Telstra to expand its presence in Asia.
“While nothing has been promised regarding access to China, and we have not counted on any benefits from this in our analysis of the PCCWHKT transaction, we clearly have options to expand north to China in the medium term.
“We also have the option of expanding in SouthEast Asia, a region we have had some experience in the past.”
Switkowski also said that worldwide investor sentiment toward telcos is generally subdued at the moment.
There were concerns about heavily leveraged balance sheets, cost of third generation (3G) spectrum, margin compression and competition.
In this environment, Telstra stands apart, he said.
“We have strong cash flows, a healthy balance sheet and a strong A credit rating,” he said.
Switkowski added that CAPEX spending for Telstra is substantial and the company is on track to spend $4.3 billion by full year.
Telstra's effective cost containment efforts have produced overall margin expansion, not reduction.
“We are not burdened by a series of costly minority equity investments with little strategic or operating influence,” he said.
“We are not distracted by considerations of alternative structures the integrated fullservice model providing products across all of the communications space to all Australians is and will be our primary strategy,” he said. “We have not lost focus.”
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