Sol Trujillo yesterday delivered absolutely the right plan for
Telstra’s long-term growth, albeit one based on some unrealistic
assumptions, and an absolute disaster for any government plans to sell
its stake to the market next year, says John Durie in The Fin Review, and that’s exactly how he should be managing the company. But the marathon Telstra strategic review briefing yesterday
generated a sense of disconnect, says Stephen Bartholomeusz in The Age. Sol Trujillo unveiled a radical plan to overhaul the
infrastructure for all Telstra’s networks, both wire and wireless,
announced almost a quarter of his workforce could lose their jobs,
detailed $10 billion of new spending, revealed Sensis would be
integrated with Telstra, and talked ambitiously about creating a
new, integrated, customer-driven company. And yet. All that effort, capital and job losses and Trujillo
could only promise compound annual revenue growth of between 2 per
cent and 2.5 per cent over the next three years and, at best, 2.5
per cent over five years.

Those who sold down Telstra yesterday were clearly concerned
that the current year’s earnings are going to be even worse than
had been stated. Things are going to get even uglier before they begin to
recover, says Elizabeth Knight in The SMH. But at least it’s a credible plan to move to the offensive and a
long way from Telstra’s traditional defensive stand. The plan to leverage Telstra’s integrated nature with better
retail marketing and improved network rationalisation is not new –
the company has been banging on about it for years, says Alan Kohler in The Smage. But yesterday was the first time I felt a tremor of excitement
that Trujillo, Stewart and Winn could actually do it.

Investors bailed out of Macquarie Bank shares
yesterday as Australia’s biggest investment bank posted record
half-year results but failed to upgrade its outlook for full-year
earnings, reports The Australian. Macquarie announced that first-half earnings had increased by 88 per
cent to $482 million, but in the next breath warned the strong
first-half results should not be extrapolated because of the big
contribution from specialist fund performance fees.

And The Smage reports that food company Burns Philp is pushing ahead with its $2.1 billion
float of the spin-off business Goodman Fielder, after rejecting a
bid from a consortium of private equity investors.

On Wall Street, US stocks ended lower overnight, with the Dow Jones
snapping a four-session winning streak, after mixed
signals on inflation and a worrying sales outlook from Target. The Dow
ended down 10.73 points at 10,686 – MarketWatch has a full report here.