Telstra invests up to extra $3 billion on next generation network
Staff Writer |
Telstra committed to invest up to an extra $3 billion over three years on a major wave of customer-focused investments in its networks of the future and digitisation.
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Telstra CEO Andrew Penn said Telstra was making a strategic commitment to ensure continued technological leadership to significantly improve customer experiences.
Mr Penn made the announcement as Telstra released its financial year 2016 results and confirmed a $1.5 billion buy-back program for shareholders.
He said Telstra’s capex to sales ratio[1] in each of the next three financial years would increase to approximately 18 per cent, the highest since 2008-09 as Telstra was building up its 3G network.
“Our customers and our networks are our biggest assets. We must invest to set new standards and deliver excellent experiences for our customers,†Mr Penn said.
“This will position us to deliver significant customer benefits and reinforce our market differentiation over the longer term. It will also deliver business benefits such as capital efficiency, reduced operating costs and increased revenue.
“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.
“Telstra has a history of making investments ahead of the curve to create differentiation, such as 2G, 3G, LTE and Telstra Air which all delivered benefits for customers.
“The opportunity is clear as average monthly data consumption on our networks increased seven-fold over the past five years, with mobile traffic growing almost nine-fold in the same period. We are now accommodating and anticipating growth in the number of connected sensors and devices as well as specialised applications and services.â€
Mr Penn said details of the investment program would be progressively confirmed during FY17 to FY19 to maintain strategic advantage in a heavily competitive environment. Investments would continue to be aligned with Telstra’s capital management framework and target returns in excess of its return on invested capital, consistent with investment guidelines for organic investments. ■