Telstra gets five-year AU$1 billion contract renewal with Department of Defence

Telco dubs the contract as the largest ever for Telstra Enterprise.
Written by Chris Duckett, Contributor
australian defence force
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Telstra has extended its arrangement with the Department of Defence, gaining a five-year AU$1 billion contract renewal. The telco said the deal was its largest ever for Telstra Enterprise.

The contract has options for Defence to extend the contract multiple times for up to three years.

The deal includes a Wi-Fi 6 rollout, 5G connectivity, SD-WAN, and other software-defined networking elements.

"We are very pleased to extend and deepen our partnership with the Department of Defence and use our unique sovereign capabilities, decades of experience, and cutting-edge technology to co-design solutions for today and into the future," Telstra CEO Andy Penn said.

Telstra added it currently works with over 30 local suppliers to provide around AU$50 million of technology and services each year to Defence.

In 2013, Telstra picked up an initial six-year contract with Defence worth AU$1.1 billion to build a new terrestrial communications network for the department.

Last week, the telco announced it would acquire Digicel Pacific.

For a total cost of $1.6 billion, Telstra said it would be contributing $270 million, with the Commonwealth to stump up $1.33 billion via "combination of non-recourse debt facilities and equity-like securities". Telstra said it would have 100% control of the entity and has preferred equity over the government.

Telstra said the Commonwealth made the initial approach.

Also on Wednesday, Telstra announced a AU$100 million deal with the Victorian government to provide 1,600 public schools with 1Mbps of connectivity per student. This would see the schools receive between 40Mbps and 3Gbps from an aggregated bandwidth pool of 870Gbps.

Telstra said it would spend AU$40 million of that amount on capital works to improve connectivity, particularly in regional and remote areas, and has already completed work at 700 schools. 

"Telstra's $40 million investment in high-speed broadband connectivity won't just benefit Victorian schools, but the wider community, by laying the critical groundwork for flow on benefits to 4G and 5G mobile networks," Telstra Enterprise group executive David Burns said.

Updated at 11:44am AEDT, 3 November 2021: Added Victorian schools deal.

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