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Telstra reveals new network strategy in wake of outages

Telstra reveals new network strategy in wake of outages

Australia's largest telco to pump $1.5 billion into "networks for the future"

Telstra CEO Andrew Penn

Telstra CEO Andrew Penn

Just months after being hit by a series of network outages, Telstra has unveiled a new strategic plan will see it pump up to $1.5 billion into building out its “networks for the future”.

The telco, which held its annual Investor Day on November 17, told shareholders that “refinements” to its corporate strategy would see it incrementally invest up to $3 billion in systems and operations, with the ultimate aim being to improve the “overall experience” of interacting with Telstra.

Telstra CEO, Andrew Penn, said the refined strategy reflected Telstra’s continued drive and focus on improving the experience it provided to customers and growing the core business and businesses close to its core.

The investment will include more than $1.5 billion in building networks “for the future,” and $1 billion in accelerating the digitisation of the business.

Additionally, up to $500 million will be spent on other customer experience-related improvements.

Penn said that Telstra’s investment in networks is a recognition that, as customers become more digital, they are increasingly reliant on Telstra’s network.

“We are faced with unprecedented demand on our network and a world of opportunity to deliver new experiences,” Penn said.

"Network traffic over our fixed and mobile networks will grow five times over the next five years, and the capacity to support this level of traffic growth is not yet built.

“We will leverage new technology to deliver higher availability and performance, and unlock new sources of differentiation for our customers."

The move to invest up to $1.5 billion in its networks follows a series of network troubles suffered by Telstra earlier in the year, with the company experiencing a nation-wide mobile network outage in February that wiped out mobile voice and data services across the country.

This was followed by further mobile network outages in March, May and again in July, some of which hit mobile networks, some of which resulted in troubles with customers’ NBN and ADSL voice and data services.

In June, following a several major mobile network outages, Penn announced that the telco would spend $250 million on network improvements.

While the $1.5 billion network investment figure eclipses Penn’s previous commitment, it will include spend in four separate areas.

These include building the fundamental platforms for the “networks of the future,” including software defined networks for 2020 and beyond; enhancing mobile differentiation by readying for 5G; supporting the transition to NBN by providing greater speeds and availability; and evolving network resilience to deliver scale and reliability for future network growth.

“The changes to our strategy are not major, however they are an important signal to shareholders, employees, and our customers that we will be relentless in delivering customer experience improvements and discipline in how we invest in our networks and growth businesses,” Penn added.

"It will also enable us to respond strongly to increasing competitive intensity, the accelerating rollout of the NBN, and the greater demand for data in an ever-increasingly connected world."

The announcement comes as the Telecommunications Industry Ombudsman (TIO) reveals that it received a 3.2 per cent drop in customer complaints about the telco for the year ending September 2016.

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