• Australian telco unveils its latest five-year strategy
• Its key pillars are heavily influenced by the use and impact of AI
• Telstra will ‘double down’ on connectivity while increasing automation and efficiencies, moves that are set to lead to further headcount reductions

Australia’s incumbent network operator, Telstra, has unveiled a new five-year strategy, dubbed Connected Future 30 (because it runs until mid-2030), that is heavily influenced by the expected needs of customers in the AI era. 

CEO Vicki Brady presented the strategy at the telco’s investor day, noting that “we’re at an inflection point, as technology and connectivity are transforming again. Customer needs are changing, and the connectivity we provide has got to get more sophisticated and flexible. How we anticipate and meet changing needs will be crucial.” 

She added that the strategy will “see us double down on connectivity and radically innovate in the core of our business… we will push the boundaries of our network leadership… At moments like this, we think it’s really important to be really clear on who we are and what we do… the environment we’re competing in is moving fast and we must move fast too.”

For Telstra, meeting those needs involves a renewed focus on digital infrastructure. “There’s no version of the future that doesn’t rely on technology and it all needs to be connected. As a connectivity and digital infrastructure business with a long history of innovation, this is a massive opportunity for us,” noted the CEO. 

Telstra has already been investing in this focus: In the current financial year, which ends on 30 June, Telstra not only has a “business as usual” capital expenditure (capex) budget of up to AUS $3.4bn (US$2.2bn) but also a “strategic investment” budget of up to AUS $500m (US$323m) for its intercity fibre network rollout and for the fibre infrastructure that connects the new ground stations of satellite operator partner Viasat. 

And this puts Telstra’s InfraCo division back at the heart of its strategy: It wasn’t so prominent in the T25 strategy that is just ending, which Brady inherited from previous Telstra CEO Andy Penn in 2022. 

Now, though, InfraCo is tasked with providing the “solutions supporting the new era of AI and connectivity” and exploring “new growth opportunities with partners”, the operator noted in its investor presentation. 

In its arsenal, InfraCo has two “large” and five “small” datacentres of its own, links to about 150 third-party datacentre facilities, and more than 7,500 fixed network sites, of which more than 100 are “potential edge sites that have 160 MW [megawatts] of capacity”, the telco noted. 

Telstra, of course, is aiming to make great use of AI itself to drive efficiencies and improve productivity. It has teamed up with Accenture and Microsoft to enhance its customer engagements, develop autonomous network operations and enhance its software development process. With Accenture, it has formed an AI-focused joint venture and the partners recently launched a Silicon Valley hub to “accelerate Telstra’s foundational AI architecture that will power AI use cases and unlock business intelligence”.  

Digital infrastructure is just one of the three pillars of the new strategy, the others being “customer engagement” and what Telstra calls “network as a product”, which is a way of saying it wants to generate greater “value” from its network assets by ensuring high levels of availability and optimum levels of service. To that end, Telstra has developed a Network Experience Index to measure its performance and progress. 

Part of the network-as-product approach does, though, include the development of new business opportunities through network exposure via APIs, which it plans to achieve through its involvement in the Aduna joint venture setup with other telcos and Ericsson late last year to streamline access to network APIs. 

Of course, with a greater focus on the use of AI and automated processes, that’s going to have an impact on the way Telstra operates and on its headcount. Without citing any numbers, Brady stated that AI will “be a significant unlock when it comes to enabling our workforce… we will embrace AI, as every business will need to, and we expect the pace of change over the next five years to be extraordinary… We can’t predict exactly what our business will look like in 2030 but we expect our workforce to be smaller than it is today,” she said. The company ended 2024 with about 31,000 staff. 

Brady has already overseen a significant headcount reduction of about 2,800 staff, announced a year ago, when the telcos’ enterprise service division came under scrutiny. And now, according to Telstra CFO Michael Ackland, various options, including divestment, are being explored for the company’s Enterprise Network Applications and Services (NAS) fixed line unit, reports ARN.  

The Telstra team will be happy to see its new strategy in the headlines following a week of fending off accusations from rival TPG that it has been misleading the Australian public about the extent of its mobile service coverage, accusations that it has understandably refuted – see Telco coverage spat highlights hard times for Australia’s telcos.

- Ray Le Maistre, Editorial Director, TelecomTV