Telstra challenged to fly like Qantas

THE head of Australia’s biggest listed investment company says Telstra must work out where it will fit into a rapidly changing industry, with the challenge from aggressive rivals only getting started.

The $7.4 billion Australian Foundation Investment Company has slimmed down its holding in Telstra but bought into Qantas Airways for the first time.

AFIC managing director Mark Freeman said there were lessons for Telstra management in the revival of Qantas, which was seeking a government handout less than five years ago as it confronted cashed-up international rivals.

On Telstra, Mr Freeman said the group, which has more investors than any other Australian company, had to work out what kind of business it wanted to transform itself into.

“It really needs to think about what it wants to be in three or five years’ time,” Mr Freeman said.

“The industry is changing. TPG is coming in and they are going to be very aggressive. If you think back to Qantas five years ago, I think they really worked out what they wanted to be and how to compete and we are seeing the outcomes.”

Telstra yesterday began swinging the axe through its line-up of mobile plans as it sought to simplify its business and address key customer bugbears such as excess data charges. Among the changes, excess data charges were scrapped on its medium and large-sized mobile plans.

Mr Freeman spoke as AFIC, Australia’s oldest listed investment company, posted a 13.7 per cent rise in profit to $279 million for the year to June.

Listed investment companies operate the same way as managed funds, investing in stocks on behalf of investors. AFIC has reduced its holdings in financial heavyweight AMP after the Royal Commission.