Australia's largest telco is reeling after losing a huge government contract to build a nationwide high-speed Internet network.

The outfit was expected to win the contract by default and had even been pussyfooting around with the government in a bid to squeeze more money out of the deal. However, the government said that Telstra had no plans to build the service for small businesses and squashed the telco's bid. The company's share price fell as shareholders panicked.

Now Telstra said the rejected bid won’t affect earnings targets or business strategy. A statement, which was signed off by Chairman Donald McGauchie and Chief Executive Officer Sol Trujillo, said that the company  was in an enviable financial position and strong fundamentals are no different today than they were last week.

The outfit is three years into a five-year plan to raise profit by slashing its workforce by as much as 12,000.

More here.