How Telstra is becoming a retailer

Before I start, I am active buyer, holder and seller of Telstra shares, and have been involved in the Telstra business as a supplier of retail services for many years. However, looking at the company’s profit results last week, it was interesting to note the transformation from traditional telco to shopper-focussed retailer.

I am not an analyst, but when a company puts $1 billion into driving a strategy to increase the number of customers with mobile phones, and signs up almost one million new mobile customers, I think shareholders should be happy. Why? Well, my son’s iPhone is low use and his spend is $120 per month. So one million “Jim’s” equates to an additional $1.44 billion a year in extra revenue for Telstra. This excludes the 139,000 retail broadband customers that were added to their existing customer base. That’s another $150 million. So I reckon the $1 billion investment into driving a stargey to increase the number of customers is money well spent.

So what’s happened? Why have shoppers chosen Telstra in the past six months? Let me take you through two case studies.

A 20-year-old male wants to migrate from a two year old Vodafone Nokia mobile. He is adamant about two things – the handset must be an Apple iPhone and the carrier must be Telstra. Why? He chooses iPhone because he has used Mac Book and iPods for some time, his music and file sharing are all Apple based, and he loves the operating system. He chooses Telstra because he has been away surfing in NSW, Victoria and Tasmania and his Vodafone network coverage has been poor. So into a shiny new Telstra store, choose phone, choose plan, find Dad’s details on the system, migrate number and away he goes; all done in 30 minutes. In January he goes to the Falls Festival in Tasmania and the surfs the west coast. Among the eight 20- somethings on the two week trip, his phone is the only that works and is constantly borrowed.

A 50 year old male moves house and downsizes into a unit. He wants connectivity so decides to upgrade his old Optus Nokia. He has seen his niece’s HTC Desire phone and wants one. Being a tech head, he beleives that Telstra’s Next G network is the best in the market for coverage and data speeds, so walks into shiny new Telstra store and goes through the same process as the 20 year old, but with the added bonus of the store staff migrating all his Nokia phone details onto the HTC in about five minutes.

The reason I tell you these stories, is that if you run a small to medium sized business and believe you can’t change, you’re wrong. If one of our largest companies, in only six months, can turn its focus on the shopper around, meet the market on pricing and build a significant gain in customer numbers…so can you.   
 

In his role as CEO of CROSSMARK, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this insightful blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia, NZ, the US and Europe. His international career in sales and marketing has seen him responsible for business in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands. CROSSMARK Asia Pacific is Australasia’s largest provider of retail marketing services, consulting to and servicing some of Australasia’s biggest retailers and manufacturers.