Following the Wednesday announcement of sweeping corporate changes that are set to go into effect over the next few years, Australian telecommunications company Telstra's stock fell to 7-year lows.

Speaking with CNBC's "Capital Connection," the company's CEO, Andrew Penn, said the changes — which will include 8,000 job cuts — were needed because the company is "at a tipping point."

"The telco industry is going through a very challenging and dynamic period right now, but at the same time, demand for telecommunication products and services has never been greater," Penn said.

While that is a global phenomenon, Penn said the issue was particularly acute in Australia due to the roll out of the country's government-owned monopoly broadband network.

As part of its large-scale changes, the company plans to create a standalone business unit, called Telstra InfraCo, that will include Telstra's fixed network infrastructure.

With consumers today frustrated with the complexity of products and services offered by telecommunications firms, Telstra needs to make short-term "tough economic decisions" in order to secure its future, he added.

"We have to leave behind about 500 million (Australian dollars) worth of changes that we've previously received," Penn said, "but we believe that's the right decision and we're also going to radically simplify our products and services."