Telstra to spend $500m on improving mobile network

CEO Penn reveals other investment plans including investing in regional Australia as well as network engineering and access technologies

Telstra reveals network investment plans for FY16 and FY17

Telstra reveals network investment plans for FY16 and FY17

Telecommunications vendor, Telstra (ASX:TLS), has made public its network investment plans for the financial years 2016 and 2017. They include spending an extra $500 million on improving its mobile network in the next two years.

The company said that these investments are in line with its vision of making Telstra a “world class technology company that empowers people to connect”.

The additional spending would lift Telstra's total investment in its network to more than $5 billion over the three years to 2017.

Telstra CEO, Andrew Penn, making his first public address in the role, announced the investments the company will be making in the near future.

According to Penn, who was speaking at a Committee for Economic Development of Australia (CEDA) lunch, Telstra will be increasing its investment into its mobile network.

“We will continue to expand our 4G footprint to 99 per cent of the population. We will increase our overall footprint to more than 2.5m square kilometres. We will build in excess of 750 new mobile base stations, increasing the total network to more than 9000 sites and bringing coverage to new communities in regional Australia," he said.

“It’s not just about the cities. We are investing in regional Australia. Telstra was awarded more than 80 per cent of the work in the Government’s black-spot programme. We look forward to continuing to partner with government to provide network access to areas that would otherwise not get it,” he said.

In addition, it plans to deploy in excess of 750 small cells providing in-fill in areas of low signal strength.

“We will start rapidly deploying the next generation of LTE technology including voice over LTE, LTE broadcast and the next stage of LTE advanced delivering peak network speeds of up to 600 mbps. Telstra’s network will be the best equipped to meet the explosion in video traffic.”

And it is not just about the mobile network. It is also investing in point-to-point peer solutions for business and enterprise customers.

“That is why we are investing in innovation in network engineering and access technologies. Working with small cells and video optimisation to boost network performance, trialling balloon technology with Google to boost coverage where it is too remote to put a tower and experimenting with drone technology,” he added.

Penn addressed three technologies that Telstra will be focusing on. The first is resulting from a massive shift to mobile with the Internet of Things.

“Connected things, or the Internet of Things is the fastest growing part of our mobiles business today. [As such, we will be focusing on the] future of connected electric vehicles [as] Telstra provides the sim card connection for all Tesla model S electric cars in Australia to our network,” he mentioned.

The second, is the Cloud. In April, the company completed the acquisition of Pacnet and Penn claimed it is a key strategic asset as it provides critical network infrastructure to expand its Cloud services in the region.

“Our Cloud business has been growing at 20-30 per cent per annum over the last three years; with Pacnet we are very well placed to continue strong growth in the future as we expand into Asia.”

The last area he stated is machine learning.

“We are all familiar with big data which will accelerate with the trend of connected devices and cloud. However, it is the combination of this, with advancements in machine learning, that is taking us into the world of artificial intelligence and it is in this area that the rate of innovation is accelerating the fastest,” he indicated.

That is why Telstra will be investing heavily in building a new digital first business. Some areas he pointed out include intelligent video and electronic health.

Penn also highlighted some other areas the company will be focusing on. They include:
• Continuing to put the customer at the heart of everything it does
• Opening a new purpose-built Innovation Centre in Melbourne in August
• Opening a customer experience centre in Jakarta in August to support Asian customers

“I am a technology optimist. I see great opportunity for those of us that embrace this change, great opportunity for those of us that embrace technology innovation and great opportunity for Australian companies and Australia. Telstra is no longer simply a phone company – technology pervades everything we do,” Penn concluded.

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