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Telstra has reiterated its goal of resetting its Enterprise business following its “disappointing” performance, according to the telco’s top brass.
During Telstra’s annual general meeting on 15 October, chairman Craig Dunn said the performance of the telco’s Enterprise business was “disappointing”, when going over its results from the last financial year.
During the 12 months to 30 June 2024, Telstra Enterprise Australia recorded a 2.2 decline in total income, down to approximately $4.6 billion. Of Telstra’s major business segments, Enterprise was the only one to record a decline during the financial year.
As a product, Fixed Enterprise recorded a 2.7 per cent loss in product income, down to $3.5 billion, and earnings before interest, tax, depreciation and amortisation (EBITDA) fell 66.9 per cent, to $136 million.
Within its FY24 report, which was released in August, Telstra said it started the reset of its Enterprise business in May.
“[Enterprise’s] turnaround is important to get right,” Dunn said.
“Vicki and our management team are facing into these challenges and the board believes they’re making the right decisions here. The reset of this business, however, will take time, discipline and focus.”
Brady reiterated Dunn’s sentiment, adding that Fixed Enterprise has “faced into underperformance”.
She flagged network applications and services (NAS) in particular, which saw related income fell during the financial by 1.6 per cent to approximately $2.8 billion due to declines across calling applications, professional services and equipment sales.
As a result, Telstra decided to begin the reset of that business.
“This includes reducing our NAS product portfolio by two thirds over the next few years and focusing on where we are clearly differentiated. We have also reorganised our teams to deliver better for customers and reduce our cost base,” Brady said.
“The reset of our Enterprise business will take time, but I am confident in the initial actions we have taken. These necessary choices and decisions in Enterprise, together with our additional action on cost, mean we are confident in achieving our $350 million cost reduction ambition by the end of FY25.
“Changes that affect our people are never easy and I do not underestimate the impact they have. We continued to support our people through change and minimise the impact on our customers.”