Telstra network to be 5G-ready by the first half of 2019
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 are:
- To radically simplify its product offerings, eliminate customer pain points and create all digital experience
- To establish a standalone infrastructure business to drive performance and set up optionality post the nbn rollout
- To greatly simplify its structure and ways of working to empower its people and serve its customers
- And to introduce an industry leading cost reduction programme and portfolio management
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 structure.
“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 2021.
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.
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