But by the time Penn was ready to take over from Thodey, Telstra’s monopoly was being dismantled by the National Broadband Network, a process which removed billions of dollars in value from Telstra’s books.

“I can’t honestly say that I fully understood or appreciated what telecommunications was when I joined the company, and it was a steep learning curve, those first 18 months,” Penn reflects.

“The NBN agreement had been approved by the shareholders but was awaiting regulatory approval from the ACCC, that’s the point where I joined the company, and I don’t think I fully appreciated what the whole NBN thing meant at that time for the industry ”

“I don’t think the company had its head fully around it.”

Telstra was given $11 billion in compensation by the federal government to cover for the loss of its monopoly, a number that Penn says has been wholly inadequate, given the lost earnings - between $2 billion to $3 billion annually between FY2016 and FY2022.

“I don’t think Telstra shareholders have been fully compensated, the government privatised Telstra for $70 billion dollars, some of which was attributable to the business (wholesale) that was then effectively renationalised through the NBN, but that’s all water under the bridge now.”

The NBN, for the most part, is in the rearview for Telstra but its corrosive effect on the telco’s books forced Penn to not only dramatically slash its dividend payout but also press go on a plan to complete rewiring Telstra as an organisation.

As the prospect of life as a low-margin fixed broadband reseller beckoned, Penn had to make Telstra the dominant mobile operator, a task that started in the worst possible way with a string of outages knocking out Telstra’s networks in 2016. The headlines were brutal and with Telstra’s share price wilting, Penn was the lightning rod for criticism from shareholders and customers. With analysts openly questioning the company’s strategy, Penn was at serious risk of losing his job.

“On those outages, wow, I thought where did that come from? I had been on the job for less than nine months, but that didn’t matter because you were still accountable as the CEO…that was a real wake-up call,” Penn says.

“Some of the toughest moments for me were in 2019, we had announced T22, we knew the strategy was sound, but Telstra is a complex beast and stakeholders wanted results and that put huge pressure.”

Andrew Penn

The outages galvanised Penn, billions were earmarked to improve the networks, and as the financial realities became more apparent, the company created the T22 transformation program. Announced in 2018, T22 was designed to slash billions of dollars in costs, including by cutting over 8,000 jobs.

External critics aside, the T22 strategy had to be sold internally to Telstra’s board and roster of senior executives. There were tough conversations, executives were turfed, but Penn was adamant about holding the course on the strategic overhaul.

“I am pretty emotionally resilient, and that helps. You have to make tough calls but you have to do them transparently, respectfully and be consistent, that’s the job,” he says.

“But it’s hard because there will be a lot of external criticism and a lot of noise….but you have to follow your convictions while being respectful.”

“Some of the toughest moments for me were in 2019, we had announced T22, we knew the strategy was sound, but Telstra is a complex beast and stakeholders wanted results and that put huge pressure, but what we couldn’t do was make knee-jerk decisions.”

Loading

Progress did come slowly, and there is still a fair bit of work left to be done. But Penn’s pragmatism and his willingness to endure criticism has allowed him to bow out at a time of his choosing.

“You don’t get to choose when you take on the role of a CEO but if you are lucky, you get to choose when you step down, which is what I am doing.”

As for life for after Telstra, Penn has enough feathers in his cap, not to mention the gumption, to take on new challenges.

“Whatever I do next I want to be able to make an impact...one of things I would stress is to build emotional resilience, that’s very much what I would have told my younger self...I like to try new things,” he says.

However, the one thing he won’t be dabbling in is politics.

“I am too old to go into politics, in the sense you have to win an electorate and put in the time. It’s easy to be critical of politicians, but it’s a tough gig, and you end up losing faith in humanity.”

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.