Telstra Telecommunications Company Financial Report Analysis

This report provides a comprehensive overview of Telstra Corporation's performance during the 2017-2018 financial year. It begins with an executive summary, followed by an introduction to Telstra, detailing its history and purpose of making a connected future. The report then delves into Telstra's values, corporate governance structure, and sustainability initiatives. It analyses the company's strategy and performance, including investments in new technologies like 5G and the Internet of Things, and the challenges posed by the NBN rollout and competition in the telecommunications market. The report identifies material risks, such as disruption, competition, people and culture, environmental hazards, network resilience, and cybersecurity. Furthermore, the report includes a director's review and a discussion of the remuneration report, concluding with recommendations for the future. References are also provided.

Telstra Telecommunications Company
Website: telstra.com.au
Customer Service: 00 852 3192 7420
Financial Year 2017-2018
1

Executive summary
In the following report there has been proper evaluation of the purpose that are
to be represented in the business field in Australia. Proper understanding and
presentation of values followed by the Telecom Company is well presented in
the report. The corporate governance and sustainability measures undertaken by
the organisation is properly put forward in the following report. The very
understandings of material risk, which are taken into consideration by the
management team before implementation of initial changes, are also presented
in the following report. Recommendations are also provided for future benefit
of the organisation, as there always remain a vacuum for upgrading of any
organisation
2

Contents
TOPIC PAGE
Telstra 3
Purpose 3
Values 3
Telstra Governance 4
Sustainability 5
Strategy and Performance 5
Material Risks 6
Director’s Review
Remuneration Report
8
8
3

Recommendation
10
Conclusion 10
References
11
Introduction Telstra
Telstra Corporation limited, or Telstra, is the largest company of telecommunication in
Australia. The company operates and builds markets of telecommunication networks, access
to the internet, mobile, television, and provides other services and products (Telstra.com.au,
2019).
Telstra was founded more than 43 years ago in Australia, and has a very long history. It first
started with the name of Postmaster General’s Department. It was originated with the
Australian Post. It is now a fully private company with its goal to become more customer
focused.
Purpose
The sole purpose of Telstra is to make a connected future for everyone, which will be
brilliant. Their main responsibility is to create new technologies, without which there will be
no brilliant future. It has to be build together, and it can only be done by Telstra. Their
4

aspiration is the future, which shall be connected brilliantly, and they need to build it for all
their customers (Telstra.com.au, 2019). It is their responsibility to everyone, the markets they
work in, and to the nation. It is important for everyone, as they serve all the people. There
will be no change, if the benefits apply only to a limited number of people. Transformation
takes place when maximum people receive the full benefits of the new technology, which
will create economic, cultural and social change.
Values
Their purpose will not complete everything. They need a value, to fulfil their purpose, to
express to the people that they will guide their way with new technologies. The values are
very important for their business.
Their values include
 They care for everyone.
 Better work, by being together.
 Trust them for delivering.
 Make simple out of complex.
 Look for courage.
By these values they measure all of their actions. Being an organization with values, they
must have
 Taking responsibility for everything.
 Firm determination, so nothing seems hard.
 Humility.
 Wish to learn new things.
 Courage for finding flaws, when the values are not being met.
No one can complete their values until they can get a proper strategy. By putting these values
and strategies to work, they can create a brilliant future for everyone.
Telstra Governance
The people at Telstra try to bring the best in them for excellence in all fields, which include
accountability, corporate governance, and transparency. This is very important for a long
5

term sustainability and performance of the company, and to enhance as well as protect the
interest of their stakeholders.
The framework in their governance plays an important role of supporting their business, and
also helps them to deliver their strategies. Thus, it helps them to provide a solid structure for
smooth work with clear objectives, so that there is monitoring of their performance, and help
in case of problems.
Their governance includes a framework that helps in clear accountability and making of
decisions throughout their business and gives a clear guidance of the behaviour standard, they
expect from all the employees.
Our governance framework includes:
 Clear, timely, and open communication with their shareholders.
 A board, which is skilled, diverse, independent, and experienced, and the structure of
the Committee are suited to their needs.
 A clear deputation, accountability and decision making framework.
 A powerful system that manages risk well, and has assurances.
 Telstra always value their policy framework and code of conduct that explains what
they stand for, and as a company, how they conduct themselves as they deliver their
strategy by working together.
Sustainability
The goal of Telstra is embedding environmental and social considerations in various ways
into their business, such that it will create a lot of value for the company, as well as its
shareholders.
Their strategy of sustainability always responds to those topics, which tend to be most
valuable for the organization, and the areas where they need to make a meaningful impact by
expertness.
They tend to see all the opportunities, and where they can use new innovations and solutions
which are mostly tech-based, to address the major opportunities and challenges of the society.
Strategy and Performance (FY 2018)
6

In the financial year of 2018, the market of telecommunications in Australia faced many
problems, including the challenging and dynamic conditions, whose factors were driven by
the network rollout of NBN, competition in the mobile industry, and the new innovations in
technology.
At that same time, Telstra Company continued seeing the new and various opportunities that
would help their business to grow, by delivering good services along with the latest products
to their customers, as new technologies and internet have become common to homes,
workplaces and communities.
Since the beginning of 2016, Telstra has invested around $1.8 billion for the future networks,
so that it would help them to deliver the new technology of 5G to their customers as soon as
possible and make improvements.
During the financial year of 2018, they installed one of the greatest enabled networks of
Internet of Things, in the world. They also introduced the Internet of Things technology, in
the mobile networks by turning on the narrowband, as well as the Cat M1. In 2018, they
activated around 300 new base stations for mobile network and better service. It was done as
a part of the Federal Governments new strategy for bringing better network coverage to rural
and regional areas. It was the Mobile Back Spot Program (Telstra.com.au, 2019). The speed
and coverage of networks were also improved as the 4GX was launched. The Australian
people now use double the speed of original speed. During the financial year of 2018, they
opened their own 5G Innovation Centre, on the Queensland’s Gold Coast, so that they could
improve and contribute to the development of 5G (abc.net.au, 2019).
They are continuously building different and new types of digital platforms, which will
enable the simplification of their business, so that it will lead to the saving of lot of money
and the improved experience of customers. They have also invested in the foundation of
buildings and its capabilities, resources in the mobile industry, and fixing the problems of the
customers by working in new ways. Delivering the people, a good service without
interruption has been their main aim of the Financial Year of 2018.
Material Risk
Management of their risks and grabbing the opportunities is very crucial for the proper
functioning of their governance, as they continuously monitor the potential threats to their
organization and try to identify and overcome them.
7

Following are the most material risks for the organization.
1. Disruption, competition and transformation – The challenges faced by Australia and
the whole world keeps on increasing as the scale and speed of technological
competition and innovation increases. As the environment of technology is changing
rapidly at a very fast rate, the challenge that Telstra faeces are very significant and it
is because of the rollout of NBN network (Gregory, 2015). The rollout of the NBN
network may lead to Telstra being no longer predominant in the fixed line provider of
wholesale in Australia and thus will result to a great loss in its revenue, as the
businesses and the people, will change to NBN broadband services. Thus they
presented with the new strategy of Telstra2022 that will help in enabling them to take
new steps towards their goal and give the solutions for new challenges and problems.
2. People and their culture – In order to transform their organization, they need to shift
significantly on the way in which they operate, and the ways in which their customers
are served. They focus on building an enabled and agile culture, which is based on
accountability and simplicity and the leadership is strongly driven. They are planning
to have a smaller workforce in the future, and will adapt to ways that will be very
agile for dealing with the changes that are rapid, during work. They also have in place
two programs that are new and will be brought for the employees support. One of
them is a program for transition for all those employees who left the organization to
have support of increased outplacement. The second is for those employees who are
currently left working in Telstra will be also provided a transition that will help them
to increase their skills and provide them to work in new ways that shall be agile for
their organization. To implement these programs, Telstra intends to invest $50 million
as an initial funding.
3. Healthy and safe environment – There are a lot of risks for the employees working as
they have to deal with electrical instruments all the time. There are also a risk to the
people and hazard related to the environment, their products and in those facilities in
which they operate. If they fail to manage these risks, it may lead to the downfall of
the organization and its reputation, including the fact that there may be a legal action
filed by the people and the stakeholders (Cummings, Ryan and Schaper, 2018)
4. Network and business resilience – The most key source of competition lies in the
reliability, scale, and most importantly, the speed of their network. They realize the
importance of a good service to their customers as it is most important than ever in the
8

industry of technology. During problems like network congestion, they understand the
effect it does on the people who are frustrated. They, thus continue meeting the high
consumption of data. Their work on 5G will soon help everyone to enjoy a much
faster data access at lower costs.
5. Privacy and cyber security – Ensuring that the customers get complete privacy is very
important for their business. Thus they work at Telstra to make sure that the data of
the customers are no misused, lost, or disclosed without proper authorization. If they
fail to maintain the privacy of the customers, it may lead to the erosion of the
confidence of the customers, which will damage their reputation that will bring down
the brand (Senarathna, Yeoh, Warren and Salzman, 2016). It will then lead to
penalties and legal actions. Thus to avoid these problems, they regularly update their
privacy statements and procedures, which explain how the new changes in
technologies will affect their ways of storing and collecting personal information.
Director’s review
 Principal review – Their principal activity in the financial year of 2018 was to provide
information services and telecommunication for all customers, both domestic and
international. In this year, there has been no notable change in the activity’s nature.
 Business strategies, prospects and developments – Information is based on the
strategies of the business and the prospects of the financial years in the future by
OFR, and also refers to the developments which are likely to happen in the operations
and results of Telstra in the future (Telstra.com.au, 2019).
 Events after the end of the Financial Year – There are no events that the directors are
aware of, that has either affected or will affect the financial condition of the company
in the future.
Remuneration Report
As they had outlined in their remuneration report of 2017, they had introduced Executive
Variable Remuneration Plan in the financial year of 2018 that has combined with their
previously arranged Short Term Incentive and Long Term Incentive to provide an incentive
plan which is variable and simplified enough for a term of 5 years or more (Telstra.com.au,
2019).
9

The philosophy of their remuneration is based on the linking of the financial rewards directly
to the performance of the company and the contributions of the employees.
The full year results of Telstra in the Financial Year of 2018 were fully in line with the solid
results of guidance delivering in the challenging conditions of the market and the increased
intensity of the competition. The Board of Directors assessed that the final results of FY18,
has a positive result and improved two measures financially, one is the improvement of the
experience of customers, and the second is the progress that they made on the strategy of
Telstra2022.
Recommendations
Telstra’s project of Telstra 2022 is a new innovation, which will surely make some changes
for the good, but for these changes to happen on the outside, the changes must be done from
the inside.
Telstra needs to make more profit annually, by maintaining the same service to the people.
As time will pass, the services shall be made better as it is the time for new technologies.
There could also be implementation of Environmental regulation and performance. Telstra as
a reputed organization needs to follows all the laws of environment safety and cleanliness,
and the regulatory permissions necessary to its operations.
In the case of non-compliance, Telstra needs to do a full internal review so that a
reoccurrence risk is minimized.
Conclusion
Telstra is one of the most important telecommunication network services that connect the
Australian people. It is very safe and secure and one of the fastest network providers. The
organization follows all the community guidelines and maintains the services to the people.
10

References
abc.net.au, (2019) ABC Available from https://www.abc.net.au/news/2018-08-16/telstras-
full-year-profit-falls-8pc-to-$3.6bn/10123392 Accessed on 11 April 2019
Cummings, E., Ryan, A. and Schaper, L.K. eds., 2018. Connecting the System to Enhance the
Practitioner and Consumer Experience in Healthcare: Selected Papers from the 26th
Australian National Health Informatics Conference (HIC 2018) (Vol. 252). IOS Press
Gregory, M.A., 2015. Telecommunications disruption. Australian Journal of
Telecommunications and the Digital Economy, 3(2), p.ii.
Senarathna, I., Yeoh, W., Warren, M. and Salzman, S., 2016. Security and privacy concerns
for Australian SMEs cloud adoption: Empirical study of metropolitan vs regional
SMEs. Australasian Journal of Information Systems, 20.
Telstra.com.au, (2019) TELSTRA Available at https://www.telstra.com.au/aboutus/our-
company Accessed on 12 April 2019
Telstra.com.au, (2019) TELSTRA Available at https://www.telstra.com.au/aboutus/our-
company/present/purpose-values Accessed on 12 April 2019
Telstra.com.au, (2019) TELSTRA Available at
https://www.telstra.com.au/aboutus/investors/governance-at-telstra Accessed on 14 April
2019
Telstra.com.au, (2019) TELSTRA Available at
https://www.telstra.com.au/content/dam/tcom/about-us/investors/pdf%20F/2018-Annual-
Report.pdf Accessed on 11 April 2019
Telstra.com.au, (2019) TELSTRA Available at
https://www.telstra.com.au/content/dam/tcom/about-us/investors/pdf%20F/2018-Annual-
Report-singlepages.pdf Accessed on 10 April 2019
11