Telstra says it has transferred nearly 80 per cent of its customers to the new billing systems that former "Amigo" Greg Winn once bravely predicted would be finished by the end of 2007. But a major portion of the $1.5 billion information technology overhaul Telstra announced in 2005 continues to cause headaches for the giant carrier as it enters the final 18 months of its five-year, $20 billion transformation program. The bumpy ride has led to a surge in complaints from customers angry with the disruption the billing project has caused, and pressure is mounting on Telstra to detail the extent of its problems when it hands down its full-year results on August 13. But Telstra, as recently as this week, remained adamant the project was largely on track. "Nearly 8 million customers have been migrated. We have been migrating customers in stages and this will continue as we focus on completing our system enhancements," a spokeswoman said yesterday. Since Telstra began the switch to new systems, customer complaints over billing have soared. According to figures from the Telecommunications Industry Ombudsman, total complaints about Telstra for fixed-line, mobile and broadband services jumped from 4265 in the March quarter of 2008 to just under 18,000 in the same quarter this year. According to some sources, Telstra is now briefing analysts that the transformation is six to nine months behind schedule. But the problems are not entirely unexpected, as similar projects have a history of bedevilling telcos and utilities. Analysts say the completion is not so far off track that Telstra will miss financial targets for 2009-10 set out at its annual investor briefing last November. It predicted free cash flow of between $6 billion and $7 billion for 2009-10. "Although it's behind, it's not behind enough for them to materially miss their 2010 targets," one analyst told The Australian Financial Review. "It won't make people materially change their view on Telstra as an investment." The telco declined to comment on whether its projected 40 per cent reduction in information technology capital expenditure for 2008-09, compared with 2007-08's $1.25 billion, would be met. But some say shuffling of information technology costs between operating and capital budgets could carry a sting beyond the nominal end of the transformation program next November. "Everything that [former chief executive Sol] Trujillo did was designed to be optimised for FY10. So watch out for FY11," said one analyst who declined to be named. The next major portions of the information technology upgrade - the installation of new operational support systems for mobile and broadband services - remained on track, Telstra chief information officer John McInerney said yesterday. Operational support systems, or OSS, include those managing customer assurance, fulfilment and inventory. Mobile OSS had been installed as scheduled during the final quarter of 2008-09 and were operational, Mr McInerney said. Broadband OSS was on track to be in place in mid 2009-10, he said. "From our perspective that side of the program is going quite well." But Mr McInerney also acknowledged that the move to new billing systems last year had caused pain among staff and customers. "Looking back, there are some things we would do differently," he said. "I wish there was a magic potion that could protect all customers and staff from change." Numerous reports have pointed to difficulties with the Kenan billing and Oracle-owned Siebel CRM systems Telstra is using. Systems integrator Accenture, former employer of now-departed Telstra transformation chief Tom Lamming, has also come under fire. Mr McInerney said criticism of Accenture was wide of the mark. "We get a lot of criticism about the nature of our relationship with Accenture and I honestly don't think it is warranted. I have owned that relationship since day one and I certainly don't protect it for the sake of it. I have plenty of other vendors I work with day in and day out, so they certainly know they are under pressure to deliver." But despite Telstra's line that the program has achieved much when assessed against its ambitious goals, it is clearly running behind the schedule Mr Winn announced in 2005. "We think we will have most of the IT transformation . . . [the] front of house, CRM and bill systems . . . done by the end of 2007. The first quarter of 2008, we will be decommissioned," Mr Winn told analysts and the media 31/2 years ago. "In fact we have financial commitments with our suppliers being complete within 24 months of starting," he said at the time. With characteristic forthrightness, Mr Winn also said Telstra would cut the number of systems and applications it used from about 1500 to approximately 300 by 2009-10. But Mr McInerney shied away yesterday from committing to hard numbers. "This has changed from being a pure numbers game to doing what is right for the business," he said.