New boss as Telstra eyes north

Andy Penn will take over from David Thodey as CEO of Telstra in May. Photo / AFP

Australia's largest telco, Telstra, is also pursuing an Asian expansion strategy, and on Friday appointed the man in charge of that expansion to run the entire company.

Andy Penn will take over from David Thodey in May.

Thodey, who has run the company for five years, has done a good job at Telstra. The shares have more than doubled from all-time lows during his tenure and he has overseen complex negotiations on using Telstra's phone network for the government's National Broadband Network.

But Penn takes over as Singtel-Optus nips at Telstra's heels; embarrassingly, it could overtake the former government-owned monopoly as Australia's leading telco provider.

Telstra has big ambitions for Asia. It wants to be earning about a third of its profits and revenue from the region in the next five years.

Telstra's steady flow of predictable and generous dividends makes it a favourite investment for Australia's retirees, who would rather have extra cash instead of profits being used to fund an Asian expansion.

Penn, like other executives leading an expansion to the north, will hope he can stare down the naysayers and hold the course. He's seen firsthand the cost of not doing so.

He was chief executive of fund manager AXA Asia Pacific when the company sold off its growing Asian operations to its French parent in a deal that netted A$17 million ($17.7 million). That deal is now seen by some as short-sighted.