T22 | Telstra News |

Restructuring Telstra: our most significant change since privatisation

By Andrew Penn November 12, 2020


Today at our annual Investor Day we announced an important milestone in our T22 journey – an important moment in Telstra’s long history – a proposed restructure of our business. I wanted to take a moment to explain what’s driving the changes and what happens next.

First let me outline today’s announcement.

We have announced the proposed restructuring of Telstra into three separate legal entities, under a parent company to be called Telstra Group. The three entities will be InfraCo Fixed, InfraCo Towers and a third entity – ServeCo. ServeCo is not a new brand name, we are just using it for the purpose of differentiating it from our infrastructure business because it is focussed on our products and services and customer support.

InfraCo Fixed will own and operate our passive physical infrastructure assets: the ducts, fibre, data centres, subsea cables and exchanges that underpin our fixed telecommunications network.

InfraCo Towers will own and operate our passive physical mobile tower assets, which we will look to monetise over time given the strong demand and compelling valuations for this type of high-quality infrastructure.

Finally, ServeCo will focus on how we create and innovate products and services for our customers and deliver the best possible customer experience, including maintaining our significant network leadership. ServeCo will also own the active parts of our network – things like software defined networking that allows us to operate in a dynamic way.

It’s important to understand that we are being very careful to hold onto key elements of our network in ServeCo – including the Radio Access Network equipment on our mobile towers, our spectrum holdings and the electronics that light up the fibre in our fixed network – these underpin our strategic advantage and differentiation. These are things we have built through decades of investment and innovation, that have made us, and will continue to make us, Australia’s leading telco.

What’s driving the change?

We spoke about the key drivers for the establishment of InfraCo when we launched our T22 strategy in June 2018. The challenges and disruptions of the last 6-12 months have reinforced these and three things in particular. Firstly, the increasing value of infrastructure assets globally; secondly, the importance of the digital economy, not only to business but to the whole of Australia and its economic recovery; and thirdly, the dependence of the digital economy on telecommunications as its platform.

Almost everything that happens today relies on telecommunications. If you think about every single Google search you do – that depends on the telco network. Every time you use an ATM or pay for something by EFTPOS – it depends on the telco network. Every time you book a taxi or order takeaway – it depends on the telco network. Every time you have logged onto work or school systems from home during COVID or have been part of a video call with colleagues, friends or family – it depends on the telco network. Telstra’s telecommunications network is not the only network in Australia but it is certainly the largest and the best and while it is largely invisible to most, it is absolutely central to our lives. In fact, even if you are not a customer of Telstra it is highly likely you depend on Telstra’s network nonetheless for many of the things you do everyday.

As our collective futures become increasingly digitised, these dependencies are only going to increase. Our proposed new corporate structure reflects this new world and will help us support the foundation for it – one that is in the interests of our shareholders, our employees, our customers, and ultimately one that benefits the country overall.

Why is this so important?

Two years ago, as part of our T22 strategy we created Telstra InfraCo – a standalone business unit to manage the vast majority of our infrastructure assets. It was created for three reasons – to provide greater transparency of Telstra’s infrastructure assets, to improve the efficiency of how we manage those assets, and thirdly to provide optionality in an evolving industry.

In the last two years we have done a lot of work in pursuit of these objectives. Telstra InfraCo is now a fully operational stand-alone business. It has its own leadership team and operations. Today’s announcement is the next step, not just in Telstra Infra Co’s establishment, but in the future operations of Telstra overall.

Any restructure is a complex process and this is undoubtedly our biggest and most complex since privatisation. It will take time to work our way through the commercial, regulatory and operational issues and there are many stakeholders to consider. That’s why we have announced our intentions today. We wanted to do so ahead of implementation so we can undertake a comprehensive consultation program to detail the many benefits this structure delivers.

The benefits are many:

For our customers, we will be just as focussed on ensuring we continue to invest in the networks that are enabling them to thrive in the digital economy as we are on creating the best possible service when they engage with us. We understand that customers should not have to care what telecommunications technology enables them; they just want it to work when they need it, to suit their needs and to be affordable. The bottom-line is we need all telecommunications technologies brought together holistically to meet the growing demand and support our digital interactions. That’s why having a business solely focussed on optimising every single aspect of the networks foundation infrastructure, and a business (through ServeCo) using the latest software, radio technology, electronics and network smarts to bring it to life and provide the best coverage and customer experience in the industry, is critical.

For our employees, these changes will set us up to be a more sustainable and successful company in the longer term. Our employees will benefit from continuing to work for a market leading company at the cutting edge of telco technologies globally, with all of the benefits and opportunities that provides. Our T22 strategy has been about fundamentally transforming the business and the future is about leveraging the capabilities we have built and ensuring we have the right structure in place to innovate and deliver.

For the Government and the country, we are creating a business with a single-minded focus on creating the world class infrastructure that will underpin the digital economy which the Prime Minister has identified as crucial to Australia’s economic recovery. It will create new opportunities to raise more capital to invest in that infrastructure, and a structure that lets us benchmark against best-in-class infrastructure businesses around the world. It also creates optionality for a future when the nbn is privatised and could lead to greater network efficiency and reduced duplication.

We have spoken before about the importance for Australia to develop a future vision for Australia’s telecommunications industry to support the digital economy – a vision that is technology agnostic and provides an environment that is pro-investment and pro-innovation. A vision that considers not just the NBN but the success of the whole sector.

This structure supports such a vision.

Ultimately for our shareholders, it means we will continue to unlock the value of the company, improve the returns from our assets, and create further optionality for the future.

An important day

I hope this provides a real sense for why today is such a milestone, not just for Telstra but for our customers, employees, and shareholders. There’s no doubt the digital economy will shape our recovery, our society and our future, but it will only do so if the telecommunications platform that makes it possible is first class. What we have announced today is about doing just that.

T22 | Telstra News |

Extending our pause on job reductions

By Andrew Penn August 13, 2020

Today as part of our financial results, I updated the Telstra team about our plans to extend the hold on job reductions for our permanent employees in Australia and international locations until February next year due to COVID-19.

In March, at the start of the COVID-19 pandemic, we put all job reductions on hold for 6 months.

We did this because it was the right thing to do – it has given our people more certainty in what has been a very uncertain time. And it is what being a responsible, purpose-led business is all about – to step up and be there in times of need.

As we approach the end of that pause, it is clear that the impacts of COVID will be with us for some time. So today we are extending our decision to keep our T22-related productivity role reductions on hold for permanent Telstra employees until February next year.

However, we expect to propose some job reductions between October and February where projects have finished or work is no longer required, volumes have declined (e.g. nbn connections) or fixed-term contracts end.

Our shift to Agile teams is helping us deliver better outcomes for our customers so we will also continue to shift additional teams to working in this way. Any restructures such as this would be made to better align to the current needs of our business. This may at times impact a small number of roles but we are committed to keeping these to a minimum.

As challenging as this will be for the people impacted, it would not be the right decision to keep them onboard when the work they are doing has ended. We will try to redeploy as many people as possible as we usually do. Those impacted would be supported by our career transition program and industry-leading retrenchment benefits.

We are still absolutely committed to our T22 strategy which we need to continue executing at pace across all other parts of our roadmap. While we believe the decision to pause job reductions until February is the right one, we will still need to face into some of these hard decisions around productivity initiatives early next year.

We know many of our people are doing it tough at the moment and we hope this decision gives some certainty in what is a very challenging economic time for Australia – and many of the countries in which we operate.

Financial Results | T22 | Telstra News |

A transformative and challenging year: what you need to know about our 2020 financial results

By Telstra News August 13, 2020


“2020 is proving to be an enormously challenging year for everyone – for governments, businesses, communities, and for all of us as individuals. The emotional, mental and economic stresses as a result of the COVID-19 pandemic and necessary restrictions are profound.

“Through this extraordinary disruption – both the COVID-19 and bushfire crises – Telstra was challenged to adapt, to find new ways of supporting our customers, our people and the country in a time of need. I am very proud of the way our team responded, while dealing with the implications on themselves personally.

“The COVID-19 period has also highlighted that connectivity has never been more critical. We have witnessed a huge acceleration in the digital economy, an area now critical to fast economic recovery where Telstra has a key role to play. The reasons we introduced T22 two years ago – a need to rapidly simplify and digitise, to remove customer pain points, to remove legacy systems and processes – have never been more relevant and necessary.

“Importantly, it says a lot about the strength of our business and strategy that through all this we were able to meet guidance, maintain the dividend and provide guidance for the year ahead. We have also retained our strong balance sheet and A-band credit ratings.”

– Andrew Penn, CEO

Here’s what you need to know about Telstra’s financial results for FY20.

Meeting our financial guidance and market expectations, and maintaining our dividend

On a reported basis Total Income(1) for the year decreased 5.9 per cent to $26.2 billion and NPAT decreased 14.4 per cent to 1.8 billion. Reported EBITDA was $8.9 billion. After adjusting for lease accounting on a like-for-like-basis(2), EBITDA decreased 0.3 per cent to $8.4 billion.

On a guidance basis(3), underlying EBITDA declined 9.7 per cent to $7.4 billion. Excluding the in-year nbn headwind(4) – which gives the clearest view of the long-term business – underlying EBITDA grew by approximately $40 million, with growth in the first half of the year offset by a second half decline.

The Board resolved to pay a fully-franked final dividend of 8 cents per share, comprising a final ordinary dividend of 5 cents per share and a final special dividend of 3 cents per share – bringing the total dividend for FY20 to 16 cents a share. This will see $1.9 billion returned to Telstra shareholders for the year.

Good progress at the midway point of our T22 strategy

“T22 remains our biggest focus and the things we set out to achieve when we launched the strategy – radically simplify and digitise, remove customer pain points, remove legacy systems and processes – remain just as relevant as the day they were announced. We are now past the halfway point in delivering T22, and while we expect to see challenging conditions continue in FY21, our strategy means we’re well-positioned to respond to whatever lies ahead.”

– Andrew Penn, CEO

Nearly three-quarters of the measures we use to measure progress against our T22 strategy are either now completed or on track for delivery. Highlights from the most recent year of our transformation journey include the early success of Telstra Plus and the My Telstra app and rapid movement on digitising our business to meet future demands.

Telstra Plus, our rewards program for customers, has passed one year in operation and 4.3 billion points have already been redeemed for discounts on devices, accessories and more. More than two million customers have already joined Telstra Plus – a milestone that was achieved ahead of schedule. We also launched Telstra Plus for small and medium businesses to reward our business customers who continue to choose us for their needs.

The My Telstra app, which replaced our 24×7 app and has already been downloaded 3.7 million times, gives our customers a new two-way in-app messaging service for customer service enquiries. It also tracks orders, shows outages and faults in your area, and provides easy access to billing and payment options. The success of the app contributed to a growth in digital engagement, accelerated by the impacts of the COVID-19 pandemic – over 71 per cent of our service transactions happened via digital channels, up from 53 per cent at the end of FY19.

“This acceleration to digital channels and the workforce capacity challenges we have faced offshore have also provoked our thinking on our customer service model for the future. As a consequence, we will be investing even more in digital including messaging.

“Under our T22 strategy, our aspiration had been to reduce the number of calls to our call centres by two thirds by FY22, and we are very close to that run rate now. This means that over time we will need a smaller call centre workforce for our consumer and small business customers, and our aspiration is that by the end of our T22 program all in-bound calls from these customers will be answered in Australia. Today we are already at more than 60 per cent.”

– Andrew Penn, CEO

Continuing to lead and progress on 5G, and strong growth in numbers of mobile services

We know that 5G will shape the 2020s. More than 10 million people now live, work or pass through the 53 cities and towns in our 5G footprint every day, and approximately a third of Australia’s population is covered with 5G. We’ve exceeded our FY20 target of deploying 5G in 35 cities, and we are the clear leader in 5G in Australia as well as being at the forefront globally.

In FY20 we also invested in extending our network to provide more coverage in regional and remote areas, including deploying a world-first technology that effectively doubled the range of a 4G mobile base station increasing it to up to 200km, as well as deploying a technology that extended the range of our NB-IOT coverage to nearly four million square kilometres across the country. In the five years to end of June this year, we have invested $7.5 billion in our network, with $3 billion of that invested in regional areas alone.

“Earlier this year we decided to bring forward $500 million of capital expenditure planned for the second half of FY21 into calendar year 2020. This is enabling us to accelerate our 5G rollout further while injecting much-needed investment into the economy. As a result, late last month I announced that we have increased our ambition and plan to cover 75 per cent of the population with our 5G network by June next year.”

– Andrew Penn, CEO

We continued to grow our customer base in FY20. At the end of June, we announced refreshed plans for mobile customers that included increased data allowances and saw 5G included on most plans. Our multi-brand strategy delivered subscriber growth, adding 240,000 retail postpaid handheld mobile services including 154,000 from Belong. We also added 171,000 retail prepaid handheld unique users, 347,000 wholesale services, and 652,000 IoT services. Overall mobile revenue declined $461 million in FY20. Reported postpaid handheld ARPU declined 8.2 per cent, or 6.8 per cent excluding the impact of COVID-19 on international roaming.

In our fixed business, revenue continued to be impacted by nbn migration alongside the continued decline of voice and legacy services and operational issues. We continued our market-leading share with 46 per cent of the estimated nbn market excluding satellite through a focus on differentiated customer experiences like our award-winning Telstra Smart Modem.

“nbn wholesale pricing remains the largest negative impact on our fixed business. Without some sort of long-term change leading to improvement in RSP economics, the risk of retail price increases, reduced customer experience or customers moving onto other networks such as 5G will increase. In Telstra’s case the profitability of reselling the nbn is negligible at best – that is not sustainable.

“Notwithstanding these comments I do want to acknowledge and applaud nbn’s response to COVID. nbn acted swiftly to increase capacity to RSPs during this time at no charge enabling RSPs to support their customers as they moved quickly to work and study from home.”

– Andrew Penn, CEO

Reducing underlying fixed costs in our business

During the year we reduced underlying fixed costs(5) by $615 million or 9.2 per cent, bringing underlying fixed cost reductions achieved since FY16 to $1.8 billion. This puts us on track to achieve our $2.5 billion net cost reduction target in FY22.

Since we launched T22 in June 2018, we have announced 12,000 indirect role reductions and 7,300 direct workforce role reductions. At the end of June 2020, the direct workforce was around 5,700 lower than two years ago – this figure includes 1,600 new roles recruited in areas like software engineering and cyber security and some roles brought on board in response to COVID-19.

“In March we put all job reductions on hold for six months to give our people certainty during this difficult time. As we approach the end of that pause, it is clear that the impacts of COVID-19 will be with us for some time.

“We have therefore made the decision to keep our T22 productivity role reductions on hold for permanent Telstra employees in Australia and internationally until February next year. We know many are doing it tough at the moment, and we hope this decision will give some certainty to our people in what is a very challenging time for Australia – and many of the countries in which we operate.”

– Andrew Penn, CEO

Taking decisive action on COVID-19

In March, we provided employees with pandemic leave, shifted our office-based workers to working from home, and put further job reduction announcements on hold. We also put assistance measures in place for customers, helped small businesses shift online or go into hibernation, recruited temporary employees for customer service roles in Australia, and extended all sponsorship agreements that would have expired during 2020. We estimate the financial impact of COVID-19 during FY20 was approximately $200 million in underlying EBITDA.

“The enormous, ongoing disruption and pain caused by the COVID-19 pandemic has made the past few months extraordinarily challenging for everyone. However, we have been thoughtful about the best ways we can make a difference and have taken strong and decisive action to support our employees, our customers, and the community.”

– Andrew Penn, CEO

Leading the way as a responsible business

Through 2020 we have battled devastating bushfires and the COVID-19 pandemic as a country, and we have stepped up to support the community in many ways. During the bushfires, we provided critical infrastructure for emergency services and community evacuation centres, answered more than 55,000 calls from customers making enquiries and seeking support, and paid the mobile phone bills of around 10,000 firefighters and SES volunteers over December and January. Telstra also provided free access to our nationwide payphone network and Telstra Air Wi-Fi hotspots. These investments in supporting customers and restoring bushfire damage to infrastructure will amount to $44 million across FY20 and FY21.

During the year, we became carbon neutral in our operations and Belong became carbon neutral in its products and services, while we also made progress on our commitment to sourcing 100 per cent renewable energy by 2025 and reducing absolute emissions by 50 per cent by 2030. To be a responsible business means taking meaningful action, and climate change is a perfect example of where we can think deeply about the role business should play in society.

This period of COVID-19 has provided a chance to experience our world as a quieter environment and under clearer skies. If ever there was encouragement for bolder and more significant action on climate it is now.

Telstra is currently cooperating with the Australian Competition and Consumer Commission (ACCC) as they conduct an investigation into Telstra’s sales, complaint handling and debt collection practices, to determine whether there has been misleading or deceptive conduct, unconscionable conduct, or false or misleading representations. Having considered all the information available, Telstra has made a provision of $50 million in its FY20 accounts for any penalties.

“I strongly believe that being a responsible business – supporting our people, customers and the economy – creates long-term value for shareholders. Central to this is how we live up to our organisational purpose and values, not just what is in our contracts. Despite our aspirations and hard work, we know we don’t always get things right. Our practices have also let down some of our customers in Indigenous communities. The lessons we are learning from this are helping us re-define our understanding of what responsible business looks like and we must hold ourselves accountable to these standards.”

– Andrew Penn, CEO

Looking ahead to FY21

Telstra provided financial guidance for FY21 on a range of metrics(6). For FY21 Total Income is expected to be in the range of $23.2 to $25.1 billion, underlying EBITDA in the range of $6.5 to $7.0 billion, net one-off nbn DA receipts (less nbn net cost to connect (C2C)) in the range of $0.7 to $1.0 billion, capital expenditure of $2.8 to $3.2 billion, and free cashflow after operating lease payments of $2.8 to $3.3 billion. The in-year nbn headwind for FY21 is expected to have a negative impact on underlying EBITDA of approximately $700 million. To achieve growth excluding the in-year nbn headwind in FY21, underlying EBITDA will need to be around the mid-point of the guidance range. Guidance for FY21 underlying EBITA assumes an estimated negative impact from the COVID-19 pandemic in FY21 of approximately $400 million.

Telstra also adjusted its T22 target for Return on Invested Capital (ROIC) to be greater than 7 per cent by FY23. Several things have changed since we set our ROIC ambition as part of the launch of our T22 strategy. We have experienced deeper competition across products and slower return to growth, especially in mobile. In addition, AASB16 was implemented resulting in a 1 percentage point reduction in ROIC, which previously caused us to push out our target by a year. In this same period our Weighted Average Cost of Capital (WACC) has also reduced by approximately 1.5 percentage points. We have invested, and will continue to invest, for long-term returns and opportunities, especially in mobile and our T22 strategy, the benefits of which will be realised over time. Our long-term ambition is to grow ROIC.

More information on our financial results is available on our Investor Relations website.

Things you need to know

(1) Excluding finance income.

(2) Reported lease adjusted EBITDA includes all mobile handset leases as operating expenses, and all rent/other leases below EBITDA.

(3) FY20 guidance assumed wholesale product price stability and no impairments in and to investments or property, plant and equipment and intangible assets, and excluded any proceeds on the sale of businesses, mergers and acquisitions and purchase of spectrum. The guidance also assumed the nbn rollout and migration in FY20 was broadly in accordance with the nbn Corporate Plan 2020. Guidance was provided on the basis of AASB16 Leases and assumed impacts consistent with management estimates. Capex was measured on an accrued basis and excluded expenditure on spectrum and externally funded capex and capitalised leases under AASB16 Leases. Underlying EBITDA excludes net one-off nbn DA receipts less nbn net C2C, one-off restructuring costs and guidance adjustments but includes depreciation of mobile lease right-of-use assets. In-year nbn headwind is defined as the net negative recurring EBITDA impact on our business based on management best estimates including key input of the nbn Corporate Plan 2020.

(4) See note 3. As at 30 June 2020, the in-year nbn headwind was ~$830 million.

(5) Underlying fixed costs excludes one-off nbn DA and nbn net C2C, one-off restructuring costs and guidance adjustments.

(6) FY21 guidance assumes no impairments in and to investments or non-current tangible and intangible assets, and excludes any proceeds on the sale of businesses, mergers and acquisitions and purchase of spectrum. The guidance is based on management best estimates of nbn impacts including input from the nbn Corporate Plan currently published at time of issue of this guidance. Total income excludes finance income. Underlying EBITDA excludes net one-off nbn DA receipts less nbn net C2C, one-off restructuring costs and guidance adjustments but includes depreciation of mobile lease right-of-use assets. Guidance for FY21 underlying EBITDA assumes an estimated negative impact from the COVID-19 pandemic in FY21 of approximately $400 million. This estimate is approximately $200 million greater than the estimated negative impact from the COVID-19 pandemic for FY20 underlying EBITDA. In-year nbn headwind is defined as the net negative recurring EBITDA impact on our business. Capex is measured on an accrued basis and excludes spectrum and guidance adjustments, externally funded capex, and capitalised leases. Free cashflow is defined as ‘operating cash flows’ less ‘investing cash flows’ less ‘payments for operating lease liabilities’ and excludes spectrum and guidance adjustments.

Telstra Building Foyer - Sydney
T22 | Telstra News |

Emerging from COVID-19 – fast, smart and connected

By Andrew Penn April 8, 2020

Here is an update that I shared today with Telstra employees.

Team,

As you know, I normally keep my communications short, but given the complexities of these unprecedented times I wanted to share with you all of the thinking, planning and actions underway.

Telstra has seen many crises over its long history and our crisis management procedures and approach is tried and tested. Bushfires, floods, cyclones all take their toll on our networks and systems and our people work tirelessly to make sure the country and our customers stay connected. Indeed our crisis management team has been stood up for most of the summer, due first to the devastating bushfires that swept the Eastern states, and since in response to COVID-19.

One of the most challenging things about the COVID-19 crisis is staying clear-headed about managing our response while living through it personally. We are all affected, whether it is concern over elderly parents and grandparents, concern for job security, grief over a way of life lost or fear of the virus itself and what it may mean. It would be naïve to think that our own responses and leadership are unaffected by the impact of COVID-19 on us personally, so let us be kind to each other during this time.

Indeed, as new social distancing restrictions and forced isolation has come into effect, remaining connected has never been more important. Connected to our families, connected to our friends, connected to our studies, connected to our work, connected to the people and things we love. In only a few short weeks we have moved to a world where working, learning, celebrating, grieving and connecting socially online is the new norm.

As an organisation responsible for enabling so much of this connectivity, and as one of Australia’s largest companies, we are living this crisis on the front line. Like many Australians we are stepping up for our communities and for this I want to say thank you.

If we ever needed proof about the role of big business in our lives, in our communities and in our society, it is playing out in front of us right now. Telecommunications, technology, power, food supply, logistics, healthcare – so many businesses in so many sectors on which we all depend being challenged to the extreme but stepping up.

Unknowing of what we were about to face, just eight weeks ago I spoke to an audience in Melbourne about responsible business and what it might mean in the 2020s. I spoke about the role big business in particular plays in our society and why it is so important. I spoke about how it is impossible today to view business as independent from society, particularly big business. Society is rightly holding us more accountable than ever before for our actions. What we do and how we act therefore matters.

It is against this background that I wanted to share an update on how we have responded to the COVID-19 crisis so far and how we are adapting our plans and beginning to think of the post-COVID-19 period.

Playing our part in a time of crisis

In these extraordinary circumstances we have challenged ourselves to look beyond just our role in keeping people connected but what more we can do for our people, for our customers and for our economy.

To support our people our first step was to give you certainty and security. As you are aware, we have been on a major and necessary transformation as we had been responding to the changes in our industry structure with the NBN. One of the challenging aspects of that transformation has been a significant but necessary reduction in our workforce. However, given the current environment we put on hold any further job reductions over the next six months to give our people certainty at a time when they need it most. In fact, to help manage call centre volumes we announced three weeks ago that we would be recruiting another 1,000 temporary roles in Australia and today we increased that by another 2,500, to a total of 3,500 joining us or our partners.

Many of these people have been laid off from other companies and we are really pleased to be able to offer them an opportunity at a critical time.

In addition to employment, we were the first major company to introduce a new global epidemic and pandemic leave policy for our people in Australia, including paid leave for our casual employees. To support our more than 25,000 people now working from home we have provided additional mobile data to assist if at any stage they needed to use their own data to stay connected.

These are challenging circumstances and I am also conscious our customers have significant issues contacting us at the moment. As well as bringing on more people we continue to look at ways to address these issues including diverting internal employees to help with this demand as well as offering self-service options. Rest assured, along with your health and safety, we are working around the clock to improve our customer services to keep Australia connected.

To support our customers we are providing unlimited data for home and small business broadband customers, extra data for consumer and small business mobile customers and free unlimited local, national and 13/1300 calls and calls to Australian mobiles for pensioners on landlines. For our small business customers we are providing free or heavily discounted access to specialist online digital business tools and discounted mobile broadband plans to help them rapidly move their business online. We have also launched our new My Telstra App to allow customers to increasingly self-serve rather than calling us, and for those consumer and small business customers unable to pay their bills we have suspended late payment fees and disconnections until at least the end of April.

Today we are announcing a range of additional support measures to help keep people connected at this challenging time.

For those on the JobSeeker benefit, we will offer a discount on their existing services to relieve some of the burden. Those with a fixed connection or multiple mobile services can receive $20 off their bill, while others with a single mobile service can receive $10 off their bill. The offer will be available from 20 April for a period of six months. We have also launched a new $30/month mobile offer for anybody with a valid Healthcare card. The offer includes unlimited national calls and texts, no excess data charges and peace of mind data shaped after 2GB.

We are also supporting small businesses and from today we are offering small businesses with a 10-digit account number who have had to cease trading the option to suspend their fixed business services until they need them reinstated. We will also divert their affected fixed business phone services to another fixed or mobile service of their choice, regardless of the carrier, at no cost for the period the suspension is active.

As we announced yesterday, we are proud to be doing our part in helping to bridge the gap by providing 20,000 disadvantaged students and teachers across the country with internet access to educational content to support their online learning through the Department of Education and Catholic Education.

As previously announced, to support the economy we have brought forward $500 million of capex from the second half of FY21 into this calendar year providing the economy with much-needed investment at this time. We will be deploying this capex to increase capacity in our network and accelerate further the rollout of 5G among other key projects supporting the digital enablement of our customers’ businesses and operations. Other measures include extending all our many sponsorships expiring this year for another 12 months and accelerating payment terms for small businesses in the short term as we move to 20-day payment terms by 30 June 2020.

That is today, but what of tomorrow?

Re-focussing our work, effort and resources

Since the start of COVID-19 Telstra’s primary focus has been on protecting the health and safety of our employees, helping our customers stay connected, and playing a role in contributing to the national response. The prospect of expanded and ongoing restrictions means we must all now accept we are in a new reality and we have to pivot our operational approach from crisis management to a more sustainable model – not business as usual – but a version that retains the flexibility to respond to the very dynamic environment we are now in.

Our T22 strategy was launched two years ago and we have been making good progress as we approach its midpoint. At its heart the strategy is premised on radically simplifying our business and removing customer pain points, digitising and moving customers to digital channels, simplifying our structure, introducing new ways of working, establishing InfraCo and leaving our legacy behind.

Since the beginning of the program we have reduced 1800 consumer products to just 20 whilst eliminating excess data charges on new plans and other fees. We have built new digital technology stacks enabling a more than doubling of digital interactions with our customers. We have introduced new technology solutions for our small business and enterprise customers enabling them to operate online at scale. We have removed three layers of management and moved 10,000 people to agile ways of working. We were the first telco to launch 5G here in Australia and one of the first globally, and we have continued to maintain our clear technology and 5G leadership with 5G coverage in selected areas in 32 cities and regional areas across the country.

The principles and initiatives that sit at the heart of our T22 program are exactly those that are helping us respond to this crisis. Indeed they are exactly those that we will need to support our customers and to be successful in this new reality.

Notwithstanding the veracity and relevance of our strategy to this new emerging reality we are also looking at how we focus our work, effort and resources particularly over the next 3-6 months in response to the challenges COVID-19 presents all of us. In so doing there are five key priorities that are driving all of these decisions.

  • Firstly, protecting our people’s health, safety and wellbeing – ensuring we support the parts of our workforce working from home and those still on the front line both practically and emotionally;
  • Secondly, keeping our customers connected and prioritising essential services;
  • Thirdly, building more capacity and flexibility into our network to manage demand from home-based working and education to meet the changing connectivity needs of our customers and leveraging our mobile leadership;
  • Fourthly, securing our financial stability so we are future-ready – while we have a role to play in supporting our people, our customers and the economy we also have a responsibility to ensure Telstra stays strong; and,
  • Fifthly, ensuring that we emerge from COVID-19 with strong growth potential from our core business. This includes new opportunities such as Telstra Health where we are providing additional funding to leverage our existing investments in digital technologies that support electronic prescriptioning, electronic medical records in hospitals and aged care, telemedicine where our volumes have tripled over recent weeks, and national registries which can play a crucial role in disease management.

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The final piece for us is recognising we are in a new reality and we have to adjust our operating approach to this.

Adapting quickly

Looking further ahead, the lessons from history are that the economy post-crisis always looks very different to the economy pre-crisis. It will change because people will change their behaviour. Many people will stay working from home, the adoption rates of banking, shopping and schooling online will increase faster than we have ever seen before and the new ways of socialising online will become permanent features of our lives.

Those ideas will roll on through the economy, through the supply chain, through every part of business and society and bring change in the strategies, the skills and the tools needed to work and live effectively in a connected world. So we must take our new ways of working and embed them forever in a new operating cadence that can support the long term sustainable investment so crucial to telecommunications yet flexible enough to pivot in real time as the world around us continues to change dramatically.

A moment to grieve but with an optimistic heart

I am sure all of us have been shocked at the incredible suddenness in which our world has been turned upside down. We are all concerned about the health and safety of our families, our workmates, our friends. And I am sure we are all also worried about the impact on our local communities; the shops, restaurants, coffee shops and sporting and cultural events that are so much a part of our lives.

Telstra traces its origins back more than 150 years – through many crises and cycles of change – and our focus all along has been to connect Australians to each other and the world using the best technology available. That focus has not changed but the world has again and we must too – faster than we ever have before.

I have always believed organisations, like people, show their true character in times of crisis. I could not be prouder of the way everybody at Telstra has risen to what is an extraordinary challenge on a global scale. You have responded amazingly as you have done in previous crises, such as the bushfires only a few weeks ago. It is you – the people at Telstra – that makes our company what it is. Again, thank you for commitment and helping serve our customers in this extraordinary time.

It is also the people of this country that will see us through this current crisis and to a better world beyond.

1 millionth Telstra Plus member and 1 million points winner
T22 | Tech and Innovation |

And our Telstra Plus million points winner is…

By Graeme Crozier November 7, 2019

We recently welcomed our millionth Telstra Plus member to the family, just over six months after we launched our new rewards program for Telstra customers. To mark the occasion, we gave away an amazing prize for that lucky member – and now we can reveal who took it home!

Luke G. from Brisbane is our lucky millionth Telstra Plus customer!

It was a stroke of luck that saw Luke walk into our Indooroopilly Telstra Store at just the right time to be the millionth sign-up for Telstra Plus, but as a long time Telstra customer we think this is a perfect opportunity to reward Luke for his loyalty. He wins one million Telstra Plus points to spend on whatever he’d like from our Rewards Store, two exclusive 365-day movie passes, and 12 months of access to music and sport events.

The in-store customer service team member that helped Luke sign up, Angie, has been part of the Telstra team at our Indooroopilly store for 18 months. Angie will also receive one million points for signing up the millionth member, plus an event to celebrate with her team.

Telstra Plus is part of our strategy to radically simplify our products and services and improve the experiences we offer to our customers, so it’s around to stay – and you earn points simply for paying your bill, so reward yourself and join.

We’ve also got some more exciting competitions on the way exclusively for our Telstra Plus members, so you should sign up – if you haven’t already – for a chance to be in the draw.

We know that Australians have more choice than ever when it comes to their telco provider, and millions of our customers choose us for their connectivity, technology and entertainment. We designed Telstra Plus to give you more, whether that’s by redeeming T+ points to put towards smartphones, tablets, headphones and other gadgets and accessories, or through access to discounted movie, sports and concert tickets and other great benefits.

Visit Telstra Plus to see how to become a Telstra Plus member and check out the diverse range of products already available. We’re regularly adding more devices (and more special offers) to our Rewards Store, and we’ll expand Telstra Plus even further in the coming months. The team is working on many more exciting developments, so stay tuned!

Things you need to know

Must be 18+ with an active service. Excludes business customers.