The collision between the massive uncertainties about its future created by the impasse over its relationship with the proposed national broadband network and accelerating challenges within its own business appears to be creating tension and instability within Telstra.

By itself, the resignation of the highly-regarded Justine Milne from a position elevated in David Thodey’s first overhaul of his senior management team late last year could be regarded as a natural consequence of the latest structural changes, which would have seen Milne reporting to the new chief marketing officer, Kate McKenzie.

But, after last year’s resignations of David Moffatt and Holly Kramer, who along with Milne were favourites within former chief executive Sol Trujillo’s regime, it would appear the stresses within the ‘new’ Telstra are starting to show.

Milne, regarded as talented but difficult, was group managing director of voice, broadband and media. He was given responsibility for Telstra’s fixed line network in last year’s reshuffle. Now he’s gone, amid another reorganisation that sees McKenzie’s responsibilities increased, along with those of former Tabcorp executive Robert Nason and a new senior executive, Gordon Ballantyne, join the group from Hewlett Packard to run Telstra’s retail network.

There is no doubt that Thodey is a very different person to his predecessor, which is why he was appointed CEO. He is a much more of a consensus person that Trujillo and more collegiate. Trujillo was very demanding but also gave executives considerable authority within their own areas of responsibility. The sea-change in styles is said to be creating some confusion and friction.

Given the pressure Thodey and Telstra are under, it shouldn’t be at all surprising that anxiety levels are rising and decision-making is becoming more difficult and complex.

Over-shadowing everything Telstra does are the question marks created by the NBN and the grenades the federal government has said it is prepared to lob at Telstra if it doesn’t cooperate with NBN Co on the government’s terms.

Telstra, one way or another, faces structural separation and is battling to ensure it is paid a reasonable price for helping to destroy its dominant position in fixed-line communications.

Unless and until a deal is struck with NBN Co over access to Telstra infrastructure, the migration of Telstra’s customers and the displacement of its copper network its future remains very uncertain. It isn’t surprising that Thodey’s senior team includes a number of executives in acting capacities – it would be difficult to recruit high-level industry people to the group before its fate becomes clearer.

That may take some time, with Telstra and NBN Co said to be at least $4 billion apart on value. (Telstra’s destructive stalemate, March 19, Telstra’s ticking clock, March 18).

In the background is the stalled legislation to impose separation on Telstra and ‘encourage’ structural separation with the threat of denying it access to wireless spectrum and forcing the divestment of Foxtel, coercion that Telstra has countered by promising that any deal with the government will have to be put to its increasingly angry shareholders.

While the NBN dominates discussion, internally and externally, about Telstra’s affairs and future, the group is under extreme pressure at the coal faces of its key businesses.

The sudden acceleration in the decline of its fixed-line revenues and Telstra’s tardiness/inability to respond to it before it gathered momentum is a major concern for the group and its shareholders, as is its loss of share in fixed-line broadband and, critically, in wireless.

The broader responsibilities Milne was given last year were supposed to be a response to those issues.

Telstra, whose ability to respond with urgency was compromised by the delays and difficulties associated with the final phase of implementing its new IT platforms, has started re-pricing and repackaging its product range and rolling out new products but the continuing personnel changes in its consumer-facing roles tends to signal continuing dissatisfaction with its performance.

In the circumstances, the twin challenges of trying to negotiate acceptable terms for surrendering its fixed line position to NBN Co while responding to the erosion of not just that position but the wireless business so central to its post-NBN future are imposing enormous pressures on the new senior management team and board.

Thodey and his chairman, Catherine Livingstone, are presenting a gentler, more conciliatory and more team-oriented approach than the ‘crash-through-or-crash’-approach of their predecessors, Trujillo and his chairman Donald McGauchie. However, that sensitive new-age approach appears to have its own short-comings in the hostile environment in which Telstra is now trying to operate.

This article originally appeared in Business Spectator.