5G key to Telstra’s growth bid
$500m in costs to be slashed
TELSTRA will slash $500m worth of fixed costs and increase its investment in 5G as part of what chief executive Andy Penn describes as “a strategy for growth”, with the telco giant unveiling its plans for the next four years.
Its new strategy, dubbed T25, will see Telstra pursue “high-teens” underlying earnings per share compounding annual growth rates to the 2025 financial year, along with a pledge to extend 5G coverage to most of the population.
“This is a very exciting day for Telstra as we announce what comes after T22,” Mr Penn said at the telco’s investor day on Thursday.
If T22 was a strategy of necessity, T25 was a strategy for growth, Mr Penn said.
“And in its implementation, we will be using exactly the same disciplines and governance that we used for T22 – the metrics and the milestones, the road maps and the scorecard,” he said. “And this is why I am confident it will be a success – why change a winning formula when you don’t need to.”
The four-year plan is underpinned by four pillars – customer experience, network and technology solutions, growth and value for shareholders, and “the place you want to work”.
Telstra said it would add 100,000sq km of new 4G and 5G regional coverage. It would also target a 50 per cent reduction in carbon emissions by 2030.
But the focus on cost control is not abating, with Telstra pledging to remove a further $500m in fixed costs from the 2023 financial year to the 2025 financial year.
Telstra customers will also receive more services, with telco, energy and tech products and services personalised and localised for individual customers using predictive analysis.
“Telstra is a vastly different company to what it was four years ago,” Mr Penn said.
“With T25 Telstra, will be a vastly different company, again.”
Telstra’s group executive for consumer and small business, Michael Ackland, said the telco was aiming to lift its average revenue per user (ARPU), and that some of its mobile plans would rise in price in exchange for superfast 5G coverage.
The telco’s T22 strategy has involved making about 8000 staff redundant across its direct workforce.
Telstra shares rose 2c to $3.95 on Thursday.