Does Telstra really have a plan?

Does Telstra really have a plan?

Summary: New revenue streams and better customer service doesn't sound like a plan; it sounds like common sense. So, what is the future direction for Australia's biggest telco?

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New revenue streams and better customer service doesn't sound like a plan; it sounds like common sense. So, what is the future direction for Australia's biggest telco?

Telstra faces the same issues as any incumbent telco anywhere in the world. Fixed-line revenues are disappearing, and competition is intensifying in the mobile space. Last year, its sales revenue was up, but profits were down, and the average revenue per user was getting squeezed. So, however good a spin you put on it, it's not exactly a bright future, is it?

In the UK, BT is prolonging its life rolling out a fibre access network. Here, any financial return on that exercise — if it exists — is being claimed by NBN Co and the government.

On today's Twisted Wire, we interview two people with a different view of Telstra's future.

Ian Martin is a telecommunications analyst at RBS Global Banking. He says that the company will continue to benefit from our increasing spend in the sector, benefiting from strong growth in mobiles. Telstra will hold its own as an access provider, perhaps growing more in the corporate space.

Telecoms consultant Paul Budde has a different view. He talks about how Telstra will use its large customer base to draw partnerships to provide value-added services across multiple business sectors. The money paid by a customer for access might be a small slice of the revenue generated by that connection. The rest could come from corporations that want to leverage that connection to provide other services.

At the moment, though, it all seems a little vague. What do you think? Can Telstra position itself for this brave new world? Leave a message on the Twisted Wire feedback line: (02) 9304 5198.

Topics: NBN, Broadband, Telcos, Telstra

About

Phil Dobbie has a wealth of radio and business experience. He started his career in commercial radio in the UK and, since coming to Australia in 1991, has held senior marketing and management roles with Telstra, OzEmail, the British Tourist Authority and other telecommunications, media, travel and advertising businesses.

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11 comments
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  • Great show Phil. My prediction for Telstra is the same as for any telco. Providing custom cloud services for enterprise and domestic customers. Whether or not this eventually leads software production (in house) I'm not too sure?

    When it comes to data services, it pays to observe the current state of software production. It is clear that Microsoft are attempting to lure all programmers to their platform with the recent release of the Windows 8 runtime that includes development in HTML 5. They are also making great progress in rapid development tools such as Lightswitch.

    I believe the future of apps and web sites will not be constrained to large teams of programmers, but rather quality products can be produced by individuals in short time frames. It will become cost effective for customers (business and domestic) to purchase custom built programs for their specific needs.

    This is where telcos need to offer specific cloud services to suit the customers needs (as I also believe most of these apps will be run on the cloud). Telstra have an advantage here because they already have a lot of customers, but if they are charging more (instance/hours) for cloud services than the customer requires, the customer can easily find another provider.

    Whether telco's provide apps to customers directly or not is the question? It could initiate a revenue stream via consultants and software products but the overheads may render these services to be provided by sub contractors.
    omega-b9c3d
    • Perhaps the role is similar to the Apple store - provide the platform, make it easy to for developers to use that platform, offer on-net security, add some network intelligence (if needed) and clip the ticket. Glad you enjoyed the show!
      phildobbie
      • Definately, for a domestic user Apple have nailed it. But when it comes to enterprise customers, the appeal of running your business with no hardware or software (operating systems, security software, outlook, etc) and maintenance overheads is convenient to say the least.

        Customised management software is an untapped field in the industry, purely because it's difficult to produce such a product, but this won't always be the case. I've heard numerous business people say that their business has a software product that does everything, but not the thing they want it to do...

        Cloud services for enterprise is where the revenue is, if you can offer an efficient service/plan. It will be interesting though to see if telcos just offer the service, or actually produce the products?
        omega-b9c3d
  • You might be right. But did the government really spend $100,000 reviewing the sale of a few pool tables? Where did you get this information?
    phildobbie
    • It was featured in a few news outlets a few weeks ago:

      http://www.couriermail.com.au/news/national/taxpayers-pay-for-billiard-table-farce/story-e6freooo-1226169174326
      SpecialKman
  • I'd suggest you steer clear of any more Coronas...

    Obviously one is one too many, for some ;-)
    Beta-9f71a
  • The article does not state that the government paid $100 000. It was a government department, the Department of Parliamentary Services that did. A bit disingenuous, don't you think?
    After all, I don't recall this department to be involved with the NBN in anyway shape or form.
    sergie-08482
    • It is off-topic - and it comes from an article in The Australian - http://blogs.theaustralian.news.com.au/jacktheinsider/index.php/theaustralian/comments/the_fix_is_in/P325/

      The question was taken on notice and a response from the Dept of Parliamentary Services puts the cost at $3k - not $100k.

      Up to you who you believe - a government dept or the Murdoch press. It's a tough call.
      phildobbie
      • Sorry for any trouble generated by my comment earlier. Out of interest (and I know this is off topic). Phil, can you point me to the response from the Department of Parliamentary Services? All I can find is more articles claiming that they spent $100,000 on selling said pool tables for about $5000.
        SpecialKman
        • Here you go: http://www.aph.gov.au/senate/committee/fapa_ctte/estimates/sup_1112/parliamentary/dps_qon.pdf
          phildobbie
      • Yeah, sure, Phil, can I have time to think about that??
        anonymousI