“Telstra will operate its New Zealand and Australian businesses as part of a single transtasman market,” said chief executive David Thodey late yesterday, announcing his first series of changes since taking the reins in June.

The sweeping restructure - which took place in parallel to federal government efforts to prod the telco into structurally separating as the price of participating in its National Broadband Network - saw the creation of two new domestic divisions (see summary below), and the creation of a new International unit - which will include Telstra’s various interests outside Australia and New Zealand.

TelstraClear spokesman Chris Mirams downplayed the change, saying the two operations had always been close, and that it would be “business as usual”.

More products in common
The tighter Australia-New Zealand integration will focus on shared back-office functions such as finance, administration, legal and HR, according to media reports across the Tasman.

Mr Mirams would not comment on that point, but did say that it would make sense for Telstra and TelstraClear to release more products and services that were the same across both operations - both at the corporate end of town "where we're already close" and "across the board".

Telstra and TelstraClear currently follow different paths in several areas; in part reflecting their different positions in the pecking order of their respective markets.

For example, Telstra is manoeuvring to participate in the Australian government’s fibre-to-the-premise project, while TelstraClear is one of the biggest critics of Crown fibre here; and Telstra operates its own 3G mobile network, while TelstraClear has resold Telecom (and soon Vodafone) cellular service here.

But the two also share a number of strategies, chiefly expanding their cable networks, and ramping up their TV-over-fibre plans (Telstra owns 50% of Sky TV’s Australian sister company, Foxtel, but may be forced to divest its stake).

Job cuts
Mr Mirams denied a report in Australian trade newsletter CommsDay that job cuts are expected at TelstraClear.

None were planned in relation to the Australia-New Zealand restructure, said Mr Mirams. A feasibility study was already underway, which could see up to 170 TelstraClear call centre positions in Paraparaumu and Christchurch offshored to Manila. 

Ironically, Telstra has been bringing jobs home from the Philippines, so closer alignment with its Australian parent could conceivably make TelstraClear less likely to off-shore the positions.

The company won't comment until a feasibility study is wrapped up in March.

Private company, government holding
TelstraClear is a 100% owned subsidiary of dominant Australian carrier Telstra (ASX: TLS).

The Australian government recently sold down its remaining stake in the privatised telco, but still maintains a 10% stake through its superannuation investment vehicle, the Future Fund. (Read: Telstra split: did Aussie govt just execute the ultimate insider trade?)

Mr Thodey, a Kiwi ex-pat, was chairman of TelstraClear up until his appointment as Telstra chief executive mid-year. Based in Sydney, he also served as Telstra’s group managing director for government and enterprise sales.

Led by independently-minded chief executive Dr Allan Freeth, TelstraClear doubled its profit to $18 million on revenue of $703 million for the 12 months to June 30.

TELSTRA RESTURCTURES
Late yesterday, chief executive David Thodey announced:

* New Zealand and Australian businesses to be run as part of a single transtasman market

* The creation of a new International unit, headed by Tarek Robbiati, that will take geographic and operational responsibility for CSL, Reach, Telstra's businesses in China, international sales and business development.

* The creation of two new product units, headed by Justin Milne and Philip Jones, to enable Telstra to compete effectively in fixed and mobile markets.

* The consolidation of network, technology and IT functions and the appointment of Michael Rocca as acting Chief Operations Officer

* The appointment of Robert Nason to lead a new Customer Satisfaction, Simplification & Productivity unit responsible for improving customer service.

* The creation of an Operating Committee, comprising the heads of customer-facing and product units, to meet weekly and focus on business performance.