Xx) Telstra

. Started as a sate-owned monopoly in ICT industry in Australia but in 1990s when it was privatised and faced competition from mobile phone players like Optus, Vodaphone, etc and more recently NBN.

. It is a telecommunication firm that is trying to avoid becoming a "dumb-pipe" Internet provider by developing a growth strategy around 4 criteria

i) grow network application services (NAS)
ii) invest in Asia
iii) build a successful media and IPTV business
iv) build new revenue streams like software, e-health, etc
plus earnings to be accretive & return on invested capital within 3 years

. 40% of Telstra's revenue comes from mobile phones, mostly data; previously, revenue was dominated by voice calls

. Under threat from global tech giants and new industry players like Google, Apple, etc with smart phones, etc

. Started investing in Australian and USA start-up companies & Chinese Internet services (like car sales website, eg Autohome) but low margins businesses

. Philippines ICT industry with San Miguel (large beverage/food conglomerate based in Philippines)

. Moving into health care, ie partnering with Medgate, a major Swiss provider of on-line healthcare services & virtual doctor consultation

. Negotiating to buy Pacnet for $ 1b. (enterprise services and submarine cable company)

. Telstra had 6 main challenges (2015)
- customer control
- connectivity
- integration
- admissions
- ehealth
- efficiency

NB As increasing demand for mobile services via the Internet of things oocur, with content being important, Telstra's core business is now connectivity with increasing focus on developments in media (HFC network, Foxtel, etc), Asia, software development, e-health (its ReadyCare program where GPs are available over the phone for consultations), connecting cars, etc.

David Thodey (when CEO), Telstra pulled out of Sensis, SouFun & CSL.

In 2016 Telstra appears to be performing well with record revenues and is dominating the Australian mobile and broadband markets. On the other hand, there are challenges for the A$ 66 b.  telecom, eg
- Telstra's phone and Internet infrastructure vs. A$ 56 b.National Broadband Network
- web based services such as WhatsApp, Skype, etc
- major overseas investments (see below)

These have made the copper-line call revenue fall by 41% in the past 7 years

Telstra needs to invest in
i) being agile to speed up its processes
ii) innovation, eg  digitalisation of business, government and health sectors with high-speed broadband, Internet video services, cloud computing, etc.. This includes
- Gurrowa Innovation Lab (access to a global innovation network of universities, start-ups and strategic partners that concentrates on solving customers' problems , ie creating value for customers; employs staff who are adaptable and curious; uses multidisciplinary teams with engineering expertise, focusing on customer orientation, with an understanding of the end users' experience, etc. Some of the opportunities identified include cloud capabilities, health business, etc)
- other examples include muru-D (an incubator that works with the start-up community), Telstra Ventures (made 26 investments including Telstra Health & Ooyala - software group), telstra Home, (built organically to deliver the Internet of Things to people's homes). Health is a major opportunity with A $105 b. spent on health care in Australia (2003/14); over 2 years Telstra spent around A$ 240 m. in buying digital health business. Also, it is expanding into quantum computing plus collaborative relationships with Ericsson and Cisco
iii) expansion, eg network applications (including buying Pacnet which has significant connectivity infrastructure and services such as managed networks, cloud and network security) and e-health (see above) plus venturing into riskier markets like Indonesia, Philippines, etc.. In the Philippines, Telstra plans to partner San Miguel (local beer and food giant) to build the country's third national mobile network (estimated to cost around $US 3.5 b.); Telstra plans a 40% stake in the venture.  As the Philippines lacks fixed-line infrastructure, most people will experience broadband from smart phone, not a computer.

Telstra's is previous overseas investments in Hong Kong, China, Indonesia and Vietnam have given varied results, eg it wrote off around A300 m. in China on Octave Investments; it lost A$ 2 b.  on its investment in Hong Kong Telecom. On the other hand, during Sol Trujillo's tenure, Telstra made good money in China from the real estate portal (SouFun) and a car sale website (Autohome)

Telstra is repositioning itself as a technology company (rather than a telco) with its cloud and network applications. It is focusing on taking mid-term risks for long-term gain
Telstra has also increased its investment in core mobile business with A$5 b. spent to improve the service while preparing for the launch of 5G services with Ericsson

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