The creation of Telstra Country Wide (TCW) appears to have stemmed the flow of country customers deserting the telecommunications carrier, helping it record a boost in customer numbers in the past few months.
Prior to its inception in the middle of last year, Telstra Country Wide's customer base was shrinking by about 5000 customers a quarter, as customers chose rival companies as their preselected long distance carrier. But in the past 4-5 months TCW has turned that around to record a monthly net increase in customer numbers, TCW group managing director Doug Campbell said.
Although it is a gain of only 500-1000 customers a week, it is turnaround from the previous trend.
"We have stopped a very serious move away from Telstra," he said. "That was significant part of what we set out to achieve."
Speaking on the eve of TCW's one year anniversary, Mr Campbell said the relocation of 28 local managers back into country areas, and the customer focus that created, had improved both the performance and perception of the carrier, and therefore its "churn" rates.
In its infancy the country-offshoot of Telstra has focussed on solving the long term problems which have tarnished the company's reputation, to eliminate the the 'war stories' (eds note - these is my words not Mr Campbell's) which abounded about its service record.
It was those war stories which prompted the the Besley Telecommunications Service Inquiry to conclude: "A significant proportion of those who live and work in rural and remote Australia have concerns regarding key aspects of services which, at this stage, are not adequate".
Earlier this month the Federal Government committed $163 million to help TCW overcome those concerns - concerns Mr Campbell said were slowly being allayed as the regional managers gradually fixed the problems.
"We are one of the few companies in Australia who have put their management back into rural areas," he said.
To a degree, the focus on the "tail of the average" has diverted some of the company's attention from selling the value-added, profit making products into rural Australia.
As a result, Mr Campbell predicted TCW's revenue in its first year of operation would be about $3.2 billion to $3.4b. At its launch last year the Telstra management estimated it would achieve $3.5b in sales in its first year.
But with a better public perception of the company, the Albury-based group managing director said TCW was on-track to meet its revenue and customer targets.
When TCW was launched Mr Campbell described country consumers as "sophisticated telecommunications users with unmet needs", thereby making it an undervalued market.
As infrastructure improved, the company would be better able to tap those needs with higher value services, he said, targetting small to medium-sized business and small corporations.
Two-way satellite internet, expansion of the ADSL roll-out and the launch of second generation, all planned for this year, would provide strong appeal to rural telecommunications users, he said.
The main Telstra board conducted a board meeting at TCW's base in Albury on Tuesday to discuss the new company's results, while TCW advisory board meeting is planned for Bowral next week.