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Telstra Plans Massive Overhaul Focused on Digitization and Customer Engagement

August 22, 2016

Australian mobile and broadband giant Telstra will spend $2.3 billion to upgrade its networks over the next three years after the company was beset with a series of network outages. The move is a giant step toward digitization for the company and will also be spent on customer-focused enhancements.

The company plans to release specific details on the capital expenditures incrementally as part of a competitive upgrade strategy. According to CEO Andrew Penn, the investments will remedy the company’s recent and well-publicized series of network outages by transforming the next generation of its networks. Telstra will also address a number of customer pain points and focus on digitizing and simplifying its business to improve the overall customer experience.

“Our networks and the products and services they support are integral to the Telstra brand,” said Penn. “Network differentiation is a long-standing contributor to our success, underpinning our clear market leadership and shareholder returns.”

“There are a number of immediate actions that we believe will improve customer experiences,” he added. “We will simplify products and platforms – we need to retire old technology and systems that slow down and complicate how customers are served. We have plans for consumers, small and medium sized businesses, domestic and international enterprise users, governments and our wholesale customers. The investment is about setting the pace for the network and company of the future, just as we have done in each of the previous network generations.”

The company is set to unveil several new mobile and home broadband plans next week that will focus on streaming subscription inclusions, unmetered data on certain plans and a new app for managing access to streaming services. The company is referring to the new plans as network differentiators and is offering them in response to video streaming growth rates of more than 30 percent per year.

Telstra’s planned capital expenditures for network improvements are its largest since 2008-9, when the company built out its 3G network. The service provider plans to increase its capex to sales ratio to around 18 percent in each of the next three years as a commitment to transforming and digitizing its networks.

Edited by Alicia Young

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