David Thodey will step down as CEO of Telstra.
CFO Andrew Penn has been appointed to replace Thodey and will take the top job in May.
Thodey today announced his retirement after almost six years in the job. Early in his tenure, the share price reached record lows but has risen in recent years with increased profitability, market dominance in mobile phones, and a new deal with the government worth $11.2 billion on the rollout of the National Broadband Network.
Since 2009, Telstra has become a remarkably different company.
“Our journey to being a world class customer service organisation is generational progress. We have achieved much change but there is a lot more to do,” Thodey said.
“We have provided customers with outstanding connectivity choices, a world class mobile network and new technology to make their lives easier. Andy is ideally placed to keep Telstra on that journey and I’m delighted he has been appointed.”
Telstra’s transformation from its telco’s roots has been rapid under Thodey’s leadership, with significant investments in media. It bought a global video streaming platform, Ooyala, last year for more than $US250 million and also bought a strategic stake in a digital document signing company, Docusign. While the terms of the deal were never disclosed, Docusign was worth an estimated $US1.6 billion.
Thodey will assist with Penn’s transition from 1 May until the end of the financial year, and will remain available to Telstra until late August.
Michael McCarthy, chief markets strategist at CMC Markets, told Business Insider Thodey was leaving Telstra on a high. “During his tenure he resoundingly answered the key strategic issue of the impending obsolescence of the copper network with the NBN deal,” McCarthy said. “His legacy includes a rejuvenated leadership team, a cultural shift to face customers and a growth plan in Asia. Andrew Penn is a strong internal candidate for the role, given his previous experience as CEO at AXA Asia Pacific, and his appointment is probably the result of a pre-determined succession plan.”
Under Thodey’s leadership Telstra dramatically improved its reputation for customer service and its 4G network is on the verge of covering 95% of the population.
Telstra chairman Catherine Livingstone noted Telstra’s value more than doubled from below $40 billion to above $80 billion with Thodey in charge.
“David has been an outstanding chief executive for our customers, shareholders and employees. His passion for customer service and instigating true cultural change has had an enormously positive effect on our company, which has been reflected in our financial performance in recent years,” Livingstone said.
Thodey, 60, joined the number one Australian telco in 2001 as Group Managing Director of Telstra Mobiles and then Group Managing Director of Telstra Enterprises and Government in 2002, before stepping up to CEO in 2009.
Born in Perth, Thodey held positions in IBM before joining Telstra in 2001 as head of the company’s mobile division.
Thodey has been among a handful of CEOs in Australia taking a strong interest in disruptive startups. A few years ago Telstra launched its own startup incubator, Muru-D, which provides working space and access to corporate expertise, providing $40,000 cash investments for a 6% stake.
Last week Telstra posted a $2.1 billion net profit, a rise of 21.7% for the first half of the financial year, and around $100 million ahead of analyst expectations.
Revenue from the mobile division was double expectations, increasing almost 10% for the first six month of the year.
Thodey is widely seen to have reinvented the company, having dumped legacy assets including its stake in Sensis, the phone directory provider.
He has had many achievements over his 6 years in the job. But, possibly none stands testament to his excellent stewardship than the almost 120% appreciation in the Telstra share price.
He also has plans for the telco to continue investing in new technology.