Telstra Corporation Ltd (ASX:TLS) announces new organisational structure and leadership team

Source: Telstra presentation

In morning trade the Telstra Corporation Ltd (ASX: TLS) share price has edged higher after announcing a new organisational structure and leadership team.

At the time of writing the telco giant’s shares are almost 0.5% to $2.77.

What was in the update?

According to the release, effective from October 1 Telstra will have a new top line organisational structure and leadership team.

CEO Andrew Penn believes this is an important step in delivering its Telstra 2022 strategy and will help to ensure that it delivers rapidly and effectively on all commitments made to its customers and the market at its recent investor day.

He stated that: “At the heart of these changes is the simplification of our products and services built on new technology. By mid-next year we will have fully rolled out our market leading products and services. To help deliver these changes, we are announcing a new end-to-end products and technology division of Telstra. It means we will significantly increase our technical capabilities around product development and management.”

Telstra’s under pressure CEO believes that the changes will allow it to deliver market-leading innovation in networks and support the build out of 5G and Internet of Things.

Source: Telstra update

The simplified and streamline structure, which can be seen above, aims to remove “duplication, hierarchy and silos across the organisation.” This is expected to improve customer service, the efficiency of the business, its competitiveness, increase productivity, and ultimately reduce costs.

As part of the reshuffle there will be a number of new faces and the exit of some long-standing executives. One notable exit is the company’s CFO Warwick Bray. He has been in the role since 2015 and “led the delivery of approximately $700m pa in core fixed cost reduction, introduction of a new capital management framework and driven insight into Telstra’s financial performance through nbn structural change.”

Should you invest?

While I think that this is a step in the right direction, I wouldn’t be in a rush to invest. There’s still a long way to go until these changes have an impact and trading conditions could yet get tougher for Telstra and its peers TPG Telecom Ltd (ASX: TPM) and Vocus Group Ltd (ASX: VOC).

I would suggest investors keep their powder dry until there are signs of improvement.

Instead of Telstra's dividend I would snap up this dividend star of the future.

OUR #1 dividend pick to grow your wealth over the new financial year is revealed for FREE here!

Financial year 2018 is here and The Motley Fool’s dividend detective Andrew Page has revealed his must buy dividend share to grow your wealth in 2018.

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited, TPG Telecom Limited, and Vocus Communications Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.