Our strategy for our growth businesses is designed to realise opportunities in new portfolios and to pursue growth opportunities that leverage our existing strengths.
The strategy focuses on our Network Applications and Services (NAS) portfolio, Asian growth and longer term growth opportunities such as Telstra Health, Telstra Media, the Telstra Software Group (TSG) and Telstra Ventures.
Network Applications & Services (NAS)
The NAS portfolio provides our business, enterprise and government customers in Australia and internationally with managed network services, collaboration and security services along with a range of software as a service solutions.
With another year of strong growth, we continued to make progress in growing scale and regional capabilities while making progress improving profitability for our NAS business, with revenue growth of 23.2 per cent.
During the year we established partnerships with leading global technology partners like Cisco, Amazon Web Services, VMware and IBM to expand our cloud services and deliver future innovation.
We also acquired Bridge Point, one of Queensland’s leading providers of information, security, networking and data management solutions as part of our strategy to accelerate Telstra’s expertise in emerging technologies.
Our Asian growth strategy has three pillars: to leverage Telstra’s strong foundation of connectivity in the region to deliver integrated solutions to enterprise and wholesale carrier customers; to pursue deeper in-country investment opportunities in mobility and connectivity; and to bring a suite of innovative new software based solutions to market over the longer term, through targeted investments in the region.
We provide wholesale and enterprise customers with a wide range of end-to-end solutions across data, voice, satellite and managed network services. Through our strategic investments, we now have the largest subsea cable network in Asia Pacific, with licences in Asia, Europe and the Americas and we facilitate access to more than 2,000 Points of Presence around the world. We also have a 54.3 per cent stake in Autohome, the leading online destination for car buyers in China.
In April 2015, we substantially extended our reach and asset base in Asia by completing the acquisition of Pacnet Limited, a provider of connectivity, managed services and data centre services to carriers, multinational corporations and governments in the Asia-Pacific region.
Pacnet increases the scale and scope of our international connectivity assets. The completed acquisition doubles Telstra’s customers in Asia, and greatly increases our network reach and data centre capabilities.
The Pacnet Business Services joint venture in China offers IP VPN connectivity services and together with state-of-the-art data centres in Tianjin and Chongqing, will enable us to provide a seamless service offering to our customers in and out of China.
Our joint venture with Telkom Indonesia, telkomtelstra launched in May 2015, with a suite of NAS solutions aimed at domestic enterprises and multinationals operating in Indonesia.
Telstra Health was formally launched as a standalone business unit in October 2014 and is working to become Australia’s leading provider of integrated eHealth solutions. We are creating new solutions that leverage Telstra’s existing strengths in connectivity and build on our investment in successful eHealth companies. By partnering with the health sector, our aim is for these new solutions to bring the digital revolution to healthcare.
Telstra Health made a number of additional six acquisitions and investments during the year, including global health analytics firm Dr Foster, aged care software vendor iCare Health, hospital software vendor Emerging Systems, GP desktop and hospital software vendor CloudMed.
We also recently launched ReadyCare, a joint venture between Telstra and Swiss telemedicine provider, Medgate. ReadyCare is a GP telemedicine service that gives Australians the choice to connect to a GP 24/7 via phone or video to receive advice, diagnosis, treatment and prescriptions.
This means Telstra Health now offers solutions for primary care, aged and residential care, hospitals, radiology and pathology, pharmacy, Indigenous care, specialists, analytics and telemedicine.
In addition to these investments and acquisitions, the business has been able to bring a number of new solutions to market to solve key health challenges.
MyCareManager Case Study
In April 2015, Telstra Health launched MyCareManager, an integrated eHealth product designed to help disability, community and residential aged care providers deliver innovative services and information from a distance. MyCareManager allows clients, family members and carers to be more involved in the treatment and monitoring of illness or injury through an online portal, telemonitoring through wireless health devices and video conferencing. It allows carers to better utilise clinic-based specialists, manage chronic disease and reduce staff travel while helping clients to engage in their own care and remain at home for longer. For more information, visit www.mycaremanager.com.au.
Telstra Software Group (TSG)
Software will continue to be a key focus area as we drive our growth for the future in new technologies and new technology companies.
The TSG aims to create long-term global growth in markets adjacent to Telstra’s core business, where software disrupts traditional business models.
A key milestone for TSG was the acquisition of Ooyala, a Silicon Valley-based leader in video streaming and analytics. Ooyala has a fast growing global footprint of large-scale broadcasters, operators, media companies, enterprises and high profile enterprises that use Ooyala to build more engaged and more profitable audiences.
We increased our investment in Ooyala, building on the stake already held by Telstra Ventures Group. Our ownership interest is now 97.3 per cent. We have since enhanced Ooyala’s capability by acquiring Videoplaza, with its video ad-serving platforms and programmatic trading solutions, and Nativ, which offers cloud based media logistics and workflow software.
Another key priority for Telstra is to foster technology innovation. Our start-up accelerator program, muru-D, a subsidiary of TSG, identifies and supports start-ups to create valuable technology products and services through a six month acceleration program, with muru-D taking a small equity stake in each start-up.
Building on the great success of the inaugural program, our second group of start-ups graduated in May, with all teams securing paying customers.
In April, muru-D launched in Singapore, aspiring to attract the region’s best digital talent and the successful start-ups will commence the program in September 2015.
Telstra Ventures, our corporate venture capital group founded in 2011, continued to invest in breakthrough companies that are strategically important to Telstra. Telstra Ventures invests in high growth opportunities offering technology and solutions that leverage Telstra’s assets and enable us to offer new products and services to our customers.
For example, we work with Whispir*** and DocuSign to sell their products into Telstra’s business, enterprise and government customer base. During the year, we made nine new investments. Telstra Ventures’ portfolio now consists of investments in 20 companies in Australia, the United States and Asia.
Telstra acquired Globecast Australia in June 2015, as part of our strategy to develop deeper capabilities in media services for the global broadcast industry. Globecast Australia has specific capabilities in the delivery of media services, over both satellite and fibre as well as strong linkages between its domestic networking capabilities and international points of media connectivity.
Globecast Australia also provides the innovative Globecam live point of view camera at sporting events, Direct to Home satellite transmission, IPTV managed services, IP streaming, encoding and satellite management services.
Telstra is Australia’s leading aggregator of entertainment products, including subscription TV, streaming video, music, and leading sport and news content across all fixed and mobile platforms. This year, we saw solid growth of our premium television product, Foxtel from Telstra, with a 18.4 per cent increase in subscribers driven by the introduction of new $25 Entertainment packs and the new iQ3 set top box.
Our goal is for Telstra to lead the industry in giving customers a great content experience. We want to do this by not only aggregating great content, but also providing the broadest content experience of any Australian provider. Rather than restrict our customers’ choices, we are open to hosting all Subscription Video on Demand services on our platforms and making it easy for them to get all the content they want in the one place.
Growth also continued across key content areas, particularly in our AFL and NRL digital sports properties where live video views increased by over 70 per cent and 100 per cent respectively in the past year.
We partnered with the three major streaming video providers ‘Presto, Stan^^^ and Netflix@‘ and agreed a partnership with the market leader in streaming entertainment devices, Roku^^, to launch Telstra TV our next generation of streaming device, in the new year.
We also recently announced we would give Australian music fans a great music experience as the only telco in Australia to offer a 12 month membership to Apple Music^.