Telstra (ASX: TLS) has announced the creation of a digital division after recording a lower than expected takeup of its digital Sensis offering.
Speaking at the Telstra investor briefing in Sydney today, CEO David Thodey said the company's plans to transform the directory subsidiary into a tool for small businesses wanting to connect with customers using digital platforms had not worked out as anticipated.
"We went into this year with some plans and the plans didn't work out the way we had anticipated," Thodey said.
"Sensis has just finished the metro campaign, and we've had a first real look at how that is going and,...based from what we anticipated, where we are at is good, but not quite where we wanted our product to be."
With the digital media sector still in its infancy, Thodey said monetising on the offering has proved challenging.
"It is still in its early days, and the market shift to digital marketing is happening faster than expected," he said. "Digital demand is taking longer to monetise than expected."
Using the event as an opportunity to announce that Telstra will consolidate its media business, Thodey said a greater move into the digital space is necessary.
"Telstra is a leader in online digital media with multiple assets which, including Foxtel, earn $4 billion in annual revenues and employ approximately 4000 people," he said.
"Telstra's digital media division will bring these assets together for the first time and enable us to implement a co-ordinated media strategy that delivers long-term shareholder value."
Commencing at the start of next year, Thodey said the digital media division will be headed by Rick Ellis, who is currently working as the chief executive of Television New Zealand.
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