After just one day pressing the Melbourne flesh, Telstra’s new CEO Sol Trujillo must have already made chairman Don McGauchie a very happy old farmer and Nick Minchin an equally pleased federal finance minister.

Trujillo is just what McGauchie and Minchin wanted: a good salesman capable of promising some blue sky to get T3 away at a reasonable price – and the journalists and analysts all seem to be buying it. Whether or not Trujillo can deliver on those promises doesn’t really matter as the deed will be long done before anyone finds out.

Trujillo might well be the goods – and let’s hope so, because Telstra’s health is important to us all. But nothing he said over the weekend alters the company’s main reality: it is trying to defend very fat margins that inevitably attract competition that will reduce them. Using Citigroup Smith Barney estimates, more than half of Telstra’s $20 billion in domestic sales this financial will be profit before interest, tax, depreciation and amortisation. Telecommunications being what they are, the depreciation side should not be downplayed, so take out the D, A and goodwill and the business has earnings before interest and tax of $7 billion – a 35% margin. The bottom line after the interest and tax bills: $4,428 million – 22% of domestic sales. Nice.

Margins in the mobile business are an order of magnitude fatter again, which is why that’s where there’s some half decent competition. As long as the newer players want to increase market share, margins will fall. There’s no magic answer to that, which is why the federal government didn’t want Ziggy Switkowski to be CEO during the T3 process. With a charming new can-do type guy there, the market just might give the benefit of the doubt to talk about being “customer-oriented, market-focused” and “catching the vision or catching the bus.” (Can anyone tell me a business that shouldn’t be customer-oriented and market focused?)

Talk of breaking down silos is encouraging, as is keeping Sensis instead of taking the quick buck by floating it off. But Trujillo’s real role in T3 is to offer a little sizzle. We all know the steak.

Michael Pascoe is associate editor of the Eureka Report, an online service for investors, which will launch next month.