Telstra boss quits

Telstra has announced the resignation of its chief executive, Sol Trujillo - a move that could end its Mexican stand-off with the Australian government over the national broadband network.

No successor was announced.

American ex-pat Mr Trujillo will leave the company on June 30, the fourth anniversary of his arrival in Australia to became head of Telstra in July 2005.

Mr Trujillo has presided over a period of often stunning revenue growth and profit for Telstra, and infrastrure upgrades including an aggressive 3G roll-out - but will also be remembered for eliminating more than 10,000 jobs.

Today the company posted a first-half profit of $A1.92 billion, despite the recession coming within a whisker of analysts’ expectation of $A1.94 billion. The telco is projected to have $A10 billion in free cash flow by next year.

Blinked first
But despite his fiscal and operation chops, Mr Trujillo has had a tin ear for politics, running afoul of Australia’s Communications and IT Minister, Senator Stephen Conroy.

Telstra failed to submit a full bid for Australia’s national broadband network last year (Optus’ bid ran to 1000 pages). Instead, the company sent Senator Conroy a 13-page letter, which addressed the network in broad stokes only and included a series of political demands, including a no-separation guarantee and cheap government loans.

Shocking the market, Senator Conroy reacted by blocking Telstra from the $A4.7 billion tender.

Telstra's shares crashed on news of Senator Conroy's manoeuvre and kept falling, hard. Yesterday they were at $A2.77 on the ASX, down from $5.06 when Mr Trujillo took over in 2005.

"Three amigos" vamoose
Mr Trujillo is not the first casualty of the national broadband network botch-up.

On January 22, Telstra chief operating officer Greg Winn resigned to “pursue other interests” in his native US.

Earlier, a third American in the Australian telco’s gang of “three Amigos”, chief policy advisor Phil Burgess, also resigned to return home.

Mr Winn was widely regarded as Mr Trujillo's brain, and Mr Burgess as his muscle.

Telstra shares (ASX: TLS) were down 8 cents on early reaction to the news.

Please leave a forwarding address
What turned out to be Mr Trujillo's final event for Telstra, last week's World Mobile Congress in Barcelona, was distinguished by the chief executive losing a top-secret prototype Windows Mobile phone lent to him by Microsoft.

A spokesman for Testra said Mr Trujillo had six cellphones, and that it was hard to keep track of them all.