Telstra said it will invest up to AUD 3 billion more into networks and digitisation over the next three years, in a move CEO Andrew Penn said will ensure the company’s technological leadership and a significantly improved customer experience. "Our customers and our networks are our biggest assets. We must invest to set new standards and deliver excellent experiences for our customers," Penn said.
The CEO will gradually disclose more details about the investment programme over the course of 2017-2019, but said a significant proportion of the incremental investment will go towards transforming the next generation of networks. The announcement follows several serious service disruptions at Telstra earlier this year due to network problems. After reviewing the problems, the company first pledged AUD 50 million extra investment and then another AUD 250 million.
Under the new investment programme, Telstra said it will retire legacy systems and invest in the evolution of the network with a set of architectural advances such as virtualisation and increased automation. This will build a dynamic and programmable next generation network around the virtualisation of functions across network domains.
The carrier will further boost capacity in key networks to cater for increasing demand for core services and undertake an ongoing evolution of 4G network capabilities as foundations are laid for the 5G network. The work will have distinct streams to support consumer and enterprise customers, recognising the often unique needs of larger business partners. The mobile focus areas will include the 4G network evolution and readiness for 5G, LTE-broadcast, voice over LTE and the Internet of Things.
Telstra will also make strategic investments in its fixed network services, taking into account the ongoing NBN roll-out in Australia, particularly in ADSL service areas. This move reflects the rapid increases in data consumption in recent years with home and business users.
Investing in digitisation will build on work in recent years to remove manual processes. Telstra’s digitisation programme will include expanding digitally-enabled sales and service channels so that customers can interact with Telstra on their terms, as well as introducing capability to better pre-empt issues faced by customers. Telstra will develop a flexible, software-defined network architecture, so new capabilities of the network investment are fully integrated with sales and service channels. A simpler product architecture which is easy for customers to understand will improve the way in which products are delivered, meaning all new products would be ‘born digital’.
Penn made the announcement as Telstra released its financial year 2016 results and confirmed an AUD 1.5 billion buy-back programme for shareholders. He said Telstra’s capex to sales ratio in each of the next three financial years will increase to 18 percent, the highest since 2008-09 when Telstra was building its 3G network.
