NBN to end our reliance on Telstra: CBA

The bank has a $1 billion telecommunications deal with Telstra, but the National Broadband Network (NBN) gives CBA some options to look for an alternative telco service provider.

The Commonwealth Bank of Australia (CBA) is looking at the National Broadband Network (NBN) as an alternative to acquiring services from its telco partner, Telstra.

According to CBA CIO Michael Harte, the bank is Telstra's largest customer in terms of voice and data — and services are not cheap.

He was speaking at Integrate 2012 in Sydney.

CBA awarded Telstra an AU$1 billion, 10-year telecommunications and managed services contract in 2009 . On top of that, Telstra also charges CBA for communications made through the bank's merchant network terminals, including CBA EFTPOS machines at retail point-of-sales.

"The amount of money we give to Telstra is extraordinary," Harte said. "The NBN provides an alternative."

"[The NBN] is promising ubiquitous high-speed bandwidth and an alternative route for us, not only to have a back-up, but gives some price competition, as well."

CBA has already talked with NBN Co about the kind of services it can procure, although it can't buy retail services directly from the network provider. The NBN is being progressively rolled-out and is due for completion in 2021.

As part of the AU$11 billion deal between Telstra and NBN Co , the telco has committed to a structural separation of its wholesale and retail arms. CBA has included a safeguard from any negative effects of the separation in its own agreement with Telstra.

"When we signed up with Telstra, we put in a clause that said when and if Telstra does split, and we don't like what that means, we can leave and look for an alternative," Harte said.

He hopes that the NBN, which will provide better broadband services to regional Australia, will help the bank disseminate more of its rich media content for customer engagement, such as mobile apps, at a lower cost.

Tablets for customer service

At the beginning of the year, CBA launched a program in which some of its farmer clients were given Apple iPads to connect directly with their bank representatives through video conferencing over a virtual private network. Previously, CBA area managers, some of which have over 300 customers to take care of, had to drive long distances to have face-to-face meetings with these farmers.

"So far, both farmers and area managers in the rural settings love it," Harte said.

The plan is to facilitate this kind of tablet communication for all of CBA's 11 million customers, but there a several hurdles it needs to surmount first.

"We'd like to do it for everybody, but it's a matter of getting to scale ‐ there's still quite a few things to do to ensure the right people are talking to the right customers," Harte said.

Beside the obvious issue of getting people on similar standard devices, CBA would also need to train staff in supporting more of its banking products. Currently, the average CBA customer takes about two to three of the banks' products or services. CBA expects this number to be higher, and support staff will need to broaden their product knowledge-base to facilitate that and reduce the frustration of customers that get bounced around through different departments.