Telstra CEO Andrew Penn has revealed why the Australia-based telecom operator is betting big on 5G and Internet of Things (IoT) business.
First, Telstra’s revenue from Internet of Things business surged 36 percent in the first half of fiscal 2019. Telstra did not reveal the specific revenue from IoT. Telstra is connecting on average 2,000 things every single day to our IOT networks, including vehicles, machines, infrastructure, smart meters and sensors.
Second, Telstra already secured 5G spectrum at the December spectrum auction. Telstra has rolled out 5G into its network with more than 200 5G mobile base stations already live nationwide.
Telstra CEO believes that 5G will improve ARPU. 5G will enable new revenue streams. 5G will deliver immediate capital efficiency by reducing the cost per bit of data. It will free up capacity on 4G.
Telstra aims to bring 5G smartphones before its rivals. Telstra 5G network will be business ready this year.
Telstra will not increase Capex in fiscal 2019 though it is making investment in 5G network plans. In fact, Telstra will reduce its Capex in fiscal 2020 following the completion of its 3-year investment program.
The focus of Telstra networks head Nikos Katinakis, who joined the company after leaving Reliance Jio, was in the development of software defined networks (SDN) and 5G. Telstra added 132 new mobile sites including those delivered for the federal government’s Black Spot program. Telstra completed upgrades at 800 and added 313 small cells.
Telstra has cut mobile outage hours by 69 percent — since fiscal year 2017 — due to network investments.
Telstra reported income of $13.8 billion (–4.1 percent) and EBITDA of $4.3 billion (–16.4 percent) in the first half of financial year 2019.
Telstra added 239,000 retail post-paid mobile connections, including 115,000 services on Belong. Telstra Wholesale added 125,000 mobile services on pre-paid and post-paid.
Telstra’s fixed business added 64,000 new services including 22,000 from Belong. It added 308,000 new NBN connections.
Telstra announced its T22 strategy in June last year to simplify operations and reduce costs.
The strategies of Telstra CFO Robyn Denholm will assist the telecom operator to achieve $2.5 billion net productivity improvement by 2022.
Telstra expects income of $26.2 – $28.1 billion, EBITDA of $8.7 to 9.4 billion and capital expenditure of between $3.9 and $4.4 billion in fiscal 2019.