Annual Report 2015
AA

Strategy and Performance


Drive value from the core

To continue to grow our revenue and our customer base, we are focused on driving value from our core including through network leadership and simplifying the business.

Our core refers to our key domestic products, services and costs that make up the bulk of our business today.

 

Highlights Drive value from the core

 

Investing in network superiority

Telstra’s customers have come to rely on our networks to connect them to the people and things they love.

We recently announced a further increase to our mobile network investment with the aim of providing our customers with the best possible network experience.

We will increase our total capex investments to 15 per cent of sales for the next two years, providing over half a billion dollars more for investment in our mobile services. In total, over the three years to June 2017, we expect to have invested more than $5 billion into Telstra’s leading mobile network.

Increasing coverage across Australia

Our mobile network remains the largest and most reliable mobile network in Australia and now covers over 2.4 million square kilometres of the Australian landmass and 99.3 per cent of the Australian population. We pride ourselves on delivering a world class mobile network experience for our customers and our focus is on extending and enhancing the network’s capability to deliver reliability, performance and functionality for our customers.

Our core network not only supports Telstra’s services, but underpins the operations of some of Australia’s largest organisations.

With mobile connectivity a key part of modern life, the availability of high speed mobile services has expanded significantly. Our 4G service now reaches 94 per cent of the Australian population. We have also expanded the reach of 4GX, with the service now available in over 1,200 suburbs and towns.

4GX is based on Telstra’s newly acquired 700MHz spectrum band and delivers higher typical mobile download speeds and better in-building 4G coverage on compatible devices in 4GX areas. This allows more Australians to experience ultra-fast mobile internet and gives our customers a better experience.

In June, we were selected to participate in one of the largest ever expansions of mobile coverage in regional and remote Australia, through the Federal Government’s Mobile Black Spot Programme.

We will build 429 new 3G/4G towers over the next three years and a further 250 4G data only small cells, representing a combined investment of more than $340 million in regional and remote Australia by Telstra, the Federal Government and several State and Local Governments.

Making Wi-Fi more accessible

In June, we also launched Australia’s largest Wi-Fi Network, Telstra Air®, which gives Telstra home broadband customers[1] the ability to use their broadband allowance at thousands of hotspots in Australia and millions of hotspots overseas.

The Telstra Air Network® in Australia comprises Telstra built Wi-Fi hotspots at selected payphone sites and retail stores, as well as hotspots created by our Telstra Air members, known as ‘homespots’.

Uniquely in Australia, Telstra Air member’s homespots are created using innovative Wi-Fi sharing technology which sees members share a piece of their home broadband bandwidth and in return gain access to the Telstra Air Network.

Telstra has reached a number of deals with local governments to bring Telstra Air to civic spaces and will start to roll out hundreds of additional public hotspots in the first half of FY16.

We have also joined exclusively with world leading Wi-Fi provider Fon to allow Telstra Air members to access their home broadband allowance at more than 16 million Fon hotspots overseas.

[1] With an eligible gateway device.

Case Study

Telstra Air

Read the full Case Study below.

 

Telstra Air Case Study

At launch, Telstra switched on more than 4,000 hotspots in more than 250 towns and cities across Australia.

How to logon

Eligible Telstra home broadband customers with an ADSL, Cable or NBN connection and a compatible gateway can become members of Telstra Air. More than a million home broadband customers already have a Telstra Air-ready gateway so can join the Telstra Air network if they wish to do so.

After they are enrolled to use the service, customers can use the Telstra Air App (available on iOS and Android devices). Customers are able to locate and connect to their nearest Telstra Air hotspot in Australia or Fon Spot when travelling overseas. Customers can find out more, including information on compatible gateways at Telstra.com/air.
 

Customer and revenue growth

Our network superiority and customer advocacy initiatives continue to attract new customers. With an increasing appetite for data, our higher value plans with increased data allowances are becoming even more attractive to customers.

We had another strong year in the mobiles product portfolio, with the strongest revenue growth in four years. Retail customer services increased by 664,000, bringing the total number to 16.7 million.

With the expansion of our 4G network there are now 7.7 million 4G devices on our network.

While there was continued decline in the number of fixed voice services, this decline was the lowest seen in five years, driven by successful bundling of our fixed products. The total number of customers on a bundled plan increased by 280,000 to 2.2 million, or 71 per cent of the retail fixed data customer base.

Retail fixed data revenue increased 7.3 per cent due to increased subscriber growth and higher average revenue per user. We now have 3.1 million retail fixed data customers, an increase of 189,000.

 

NBN

The revised NBN Definitive Agreements we reached with NBN Co and the Commonwealth to support a multi-technology model for the NBN have now come into effect. While these were finalised, NBN Co continued to deploy its fibre-to-the-premise network in parts of Australia, as well as their fixed wireless network in regional areas.

Telstra is Australia’s leading provider of consumer and business services on the NBN fibre-to-the-premises network. As the NBN roll-out continues, we are seeing good momentum. As at 30 June 2015 we had 211,000 NBN connections, made up of 161,000 voice and data bundles, 9,000 data only and 41,000 voice only services. These customers now have access to higher speeds, which is driving increased use of video streaming, as well as helping businesses take advantage of online sales, cloud computing and video collaboration.

In the first areas where NBN Co built its fibre-to-the-premise network, the migration of eligible services has taken place and the disconnection of Telstra’s legacy copper and HFC networks has occurred. This represents a fundamental change in industry structure and a lot of work has gone into ensuring the migration of services to the NBN has occurred with minimum disruption.

Across the sector, the experience of Australian consumers and businesses adopting an NBN service is not a consistently positive one. Telstra has developed a number of initiatives to improve the experience of Telstra customers connecting to the NBN, such as giving consumer customers greater flexibility through a simple Self Install Kit for connecting on NBN fibre and establishing an NBN customer service centre of excellence in Hobart.

These initiatives have underpinned a significant increase in customer advocacy scores for our NBN services year-on-year. We look forward to continued improvements in this area, which should be helped by changes to the Migration Plan that were recently accepted by the Australian Competition and Consumer Commission (ACCC).

 

Simplifying the business

The rate of technology innovation is accelerating and changing the face of our industry. Simplifying our business is therefore a critical component of our strategic agenda, both in removing complexity from our core, and being more adaptable and responsive to market needs.

Our simplification strategy is centred on driving customer advocacy, productivity and organisational agility through simplified processes, products, systems and networks.

Enhancing the customer experience

We continued to roll out our multi-year Digital First program, aimed at using digital tools throughout the company to improve the speed and quality of the service we offer to customers. The program included:

  • significant customer experience improvements for our Global Enterprise and Services and Telstra Business Managed Customers in the way they manage invoices through the enhancement of T Analyst®, our online billing and reporting tool
  • with the launch of Contextual Care, some new ADSL customers can scan a unique QR code to instantly receive personalised help via a 24×7 tailored self-service mobile support website.

Simplifying our products

We saw significant cost savings as a result of our product and platform simplification agenda, where we removed underutilised products, exited unused applications, and simplified our pricing plans and parts of our IT and network infrastructure.