Telstra boss expects fewer customer calls

Telstra will axe one in four of its executive and middle management jobs and consolidate its back-office operations as it cuts 25 per cent of its 32,000 strong workforce over the next three years to save $1 billion.

Telstra chief executive Andy Penn insists the shake up will mean better service for customers.

"Many of the calls that come in today are because customers have got issues and frustrations and questions, which we hope to eliminate by fundamentally changing the nature of our products and services for them," he told ABC TV.

Mr Penn said the current range of 1800 plans on offer to business and personal customers would be slashed to 20 to help remove frustration many felt about issues including excess data costs.

He said the telecommunications sector had never been under more pressure, with the development of the NBN, significant increased competition and huge pressure to invest in new technologies.

The announcement on Wednesday is part of a raft of structural changes unveiled at the telco that have sent Telstra shares down more than seven per cent in early trade on the ASX, with the stock touching $2.70 - it's lowest level since 2011 - before closing 4.8 per cent lower at $2.77.

In May, Telstra warned that its 2017/18 earnings will likely be at the bottom of its guidance range of $10.1 billion to $10.6 billion, blaming increasing competition in mobile and fixed broadband, and rising costs from the national broadband network.

While the telco is sticking by that forecast, it now expects a fall in earnings for 2019 to between $8.7 billion and $9.4 billion - excluding restructuring costs of about $600 million.

Telstra expects its earnings to be affected by the increased rollout of the NBN in 2019 but believes it can save an extra $1 billion from improved productivity as a result of its restructure.

Australian Associated Press