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Saviour Sol preaches his mobile makeover
By Geoff Elliott in San Diego
The Australian (WSJ)
Saturday, May 23, 2009

Sol Trujillo was back among friends in San Diego this week and doing what he seems to do best -- selling himself.

Having slipped out of Australia a little over a week ago ahead of his June 30 resignation date, Trujillo is on the executive circuit hustings.  He was making his pitch at the annual Future in Review conference, one of the planet's leading technology forums where over the years Trujillo has been a regular attendee.

Life as a CEO was about making bets, he proclaimed to an audience of more than 200 delegates -- a group of heavyweights of the tech and telco game, like Mark Hurd, chairman and chief executive officer of computer giant Hewlett-Packard.

Trujillo crowed that his bets at Telstra had paid off.  Telstra's Next G mobile network was the envy of the world;  the fastest thing on the planet.

It not only "fundamentally changed how the company operated but I would argue changed Australia".

Trujillo, as Communications Minister Stephen Conroy acknowledged this week, deserves plenty of credit for the Next G rollout and, it must be said, the modernisation of Telstra's core networks.  Financially, Next G has been a big winner for Telstra.

But Australians have a healthy scepticism for an extravagant sales pitch and Trujillo's presentation, including his claims that Telstra's mobile network was running at 21 megabits per second, was 30 minutes of hyperbole that in itself said much about why a man like Trujillo was always going to find it difficult to fit in with Australian culture.

US telecommunication and technology CEOs are never short of ego and on that score Trujillo is clearly one of the kings.  "One of the bets we made at Telstra was that (the mobile device) would become something you use for virtually everything," Trujillo said.

Now, in Australia "people are not only making voice calls, not only texting but they are making video calls".  But Trujillo didn't stop there.  "They are delivering healthcare.  Educational field trips are being taken by children who live in the interior of the country or the bush and going to the Great Barrier Reef and literally seeing all the marine life, everything that they can without having to get on a bus or an aeroplane or whatever to get there."

For a reporter who covered the dotcom boom and bust, the irony of Trujillo's rhetorical extravagance was not that it was pointing to the future, rather it just sounded like a warmed over speech from a telco executive in the year 2000 looking to keep air in the dotcom bubble.

Even in the evangelical-like cauldron of true believers in the all things tech that conferences like Future in Review tend to attract, this was rich.

In fact, to the credit of conference founder Mark Anderson, panellists and chief executives are tested at the forum and more than a few delegates raised their eyebrows over Trujillo's claims.

Kamran Elahian is the chairman and co-founder of a Silicon Valley venture capital firm and has helped launch more than 10 tech companies.  He got to his feet at the end of Trujillo's presentation.

"I have a fundamental question about what you've been saying," Elahian began.  "I have not seen, either in the US or Europe, seven megabits a second service on my mobile.

"To be honest, I still have trouble living in Silicon Valley having a continuous phone call going from my office to my home," he added, at which point delegates erupted into knowing laughter and gave him a round of applause.

"I'm just curious how is it that you are talking about 21 megabits a second;  are you talking about per user or per cell?" he asked, the cell being a transmission point in the network.

Elahian said that to run at 21Mbps continuously there would need to be a massive backhaul network of fibre.  "That is a pretty significant expense, knowing how big Australia is -- that would cost a gazillion dollars, not just a billion dollars, so did you get a government bailout or something?

"It just doesn't sound (as if) what you're saying matches the claims that even Qualcomm are claiming," he said, referring to a San Diego-based wireless technology company.

"That's a great question," said Trujillo, who quickly climbed down from his claims and said the 21Mbps was the best-case scenario on the network and that the average was considerably lower than that.

But Elahian's reference to a government bailout was an astute observation that drives home an emerging theme about Australia's telecommunication policy and Telstra's role.

The Rudd Government's national broadband network as a taxpayer-backed, nation-building project rescues a failed industry structure and helps starts a new one in the ashes.

The fibre-optic network plan is the gazillion-dollar gorilla that Elahian was talking about, to support not only massive and instant data transfer of files to a customer's computer at the home, but also the kind of futuristic mobile wireless services that the industry has been predicting for years.  Australia is getting at least a taste of it with Telstra's Next G network.

But Trujillo was having none of the national-building talk.  As a historic monopoly with control over the wholesale network, using the old copper wires that San Diego internet pioneer Larry Smarr says technology can only ramp up so far and has reached the end of its days, the new network has always been the threat to its business.

Telstra will be forced to compete as a retail company, only on more of an even footing with others.  Trujillo could barely conceal his scorn for the Rudd broadband plan, telling The Weekend Australian:  "I'll comment in four or five years -- let's see if it ever happens.  We'll draw a conclusion if it happens."

He also spent time at the conference railing against government intervention.

"I can give you thousands of examples in our industry around the world, because I have worked around the world, where governments have built, owned and controlled things and that is generally where you don't see innovation," he said.

Never mind government's historic role in telecommunications and more specifically the internet, which Smarr pointedly reminded Trujillo was created by the US government after Trujillo cited the web as an example of the free market.

Well, Trujillo allowed, the government can be a catalyst, which to many Australians in the audience appeared to be exactly the argument behind NBN.

"Sol is just sore because the federal Government eventually saw through his 2005 FTTN (fibre to the node) strategy that he designed to re-create the historic fixed-line Telstra monopoly," said Simon Hackett after Trujillo's presentation.

Hackett is the chief executive and founder of Adelaide-based internet company Internode.  He said the Government's announcement was designed to permanently bust Telstra's monopoly.

The global financial crisis, he said, had given the Rudd Government licence to be bold and Telstra's own "naked aggression toward both government and market shown over the last four years has ultimately empowered the Government to act in the way that it has".

Chris Hancock, chairman of the Internet Industry Association and chief executive of the university-wide internet network AARNET, said the costs of the new, $43 billion network were nothing considering the benefits to Australian society.

"The intangibles are the key -- social inclusion, regional engagement, democratic participation, environmental regulation and access to health -- I defy anyone to argue the cost issues against the delivery of these services for our future," he said.

"Let's not lament a potential cost issues over the future and the future of our children -- avoidance on this issue now will see us step back 50 years."

Hancock said at the tech conference in San Diego that Australia and its digital economy strategy had put the country on the map.

For his part, Trujillo kept his distance from the other Australians present.  Asked what he was going to do next, he said:  "I don't know."

It seemed to be a hint of the humility that, had he used it while he was in Australia, might have served him and Telstra shareholders a little better.,25197,25533184-15306,00.html