20 June 2018
| Natalie Bannerman
Telstra has unveiled a number of new strategies as part of its Telstra22 plan, including its plan for 5G and creation of a new infrastructure business unit.
The three-year plan is comprised of four key pillars, which
Speaking on the company roadmap,
Telstra CEO, Andrew Penn, said: "We will take a bolder stance
and use the disruption in the telecommunications industry to
lead the market for the benefit of our customers, employees and
shareholders. We have worked hard preparing Telstra for this
market dynamic while ensuring we did not act precipitously.
However, we are now at a tipping point where we must act more
boldly if we are to continue to be the nation’s
leading telecommunications company."
While there is a feeling of hope and transformation, Penn
also confirmed the loss of 8,000 jobs, including removing one
in four executive and middle management roles to flatten the
"We are creating a new Telstra that is able to continue to
lead the market. In the future our workforce will be a smaller,
knowledge-based one with a structure and way of working that is
agile enough to deal with rapid change. This means that some
roles will no longer be required, some will change and there
will also be new ones created. We understand the impact this
will have on our employees and once we make decisions on
specific changes, we are committed to talking to impacted staff
first and ensuring we support them through this period."
On the topic of 5G Penn said "the network investments have
been critical as Telstra builds capability in software-defined
networking and prepares to lead the market and win in 5G. We
will be network ready in the first half of FY19 with full
rollout to capital cities, regional centres and other high
demand areas by FY20".
Digging down into the specifics of the four pillars, the
first on radically simplifying its product
offerings, eliminate customer pain points and create all
digital experience, Telstra says it will
simplify its products by getting rid of more than 1,800
consumer and small business plans and instead introducing 20
core plans supported by a digital service that simplifies the
entire process. The process will start next month, with all
customers being moved to the new product range by 30 June
As for pillar two, which will establish a standalone
infrastructure business to drive performance and set up
optionality post the nbn rollout, effective from 1 July,
Telstra will create a wholly owned standalone infrastructure
business unit called InfraCo. It will have its own CEO
reporting to Penn.
"As technology innovation is increasingly relying on
connectivity, the role of telecommunications infrastructure is
becoming more important. There is virtually no technological
innovation happening today that does not rely on a high
quality, reliable, safe and secure telecommunications
network. In this world our infrastructure assets are
becoming more valuable. By creating a new infrastructure
focused business unit we will better optimise and manage these
assets," explained Penn.
The third pillar of greatly simplifying its structure and
ways of working to empower its people and serve its customers,
the company says it will implement a new streamlined operating
model and organisational structure to be announced in July.
And the fourth pillar to introduce an industry leading cost
reduction programme and portfolio management, has been in the
works for a number of years according to Telstra. The company
says two years ago it began narrowing its strategy to ensure
all new growth investments were more closely focused on
offerings close to the core of the business. It has also
avoided consumer opportunities. The company will monetise
assets of up to $2 billion over the next two years to
strengthen the balance sheet. It is also increasing its target
for its productivity program by a further $1 billion to reduce
underlying core fixed costs by $2.5 billion by 2022.