Telstra opening innovation centre in Bangalore

Build skills and not walls, Telstra’s CEO has said, adding that the Australian IT industry will face a shortage of 60,000 skilled workers over the next five years and must import talent.
Written by Corinne Reichert, Contributor

Telstra CEO Andy Penn has announced that his company will be opening an Innovation and Capability Centre in Bangalore later this year, saying it will help address the IT skills shortage in Australia.

According to Penn, this shortage will amount to around 60,000 skilled workers in the IT sector over the next five years.

"Bangalore is India's Silicon Valley, and even there we are competing for talent with the likes of Apple, Google, and other digital companies," Penn said during a speech at the Committee for Economic Development of Australia (CEDA) on Wednesday.

"This Innovation and Capability Centre consolidates our presence in India, where we already work with many partners and furthers in-house talent we previously sourced from third parties. It means we can quickly hire, develop, and scale that talent across our business."

Penn also criticised the "significant negative commentary" across the United States and the United Kingdom about immigration, calling it "an unhealthy and potentially dangerous path for the world to take".

"We need to build skills, not walls," Penn said.

"An ongoing skilled migration policy is essential for Australia and essential for Telstra to attract and recruit the right talent and capabilities we need to transform and compete effectively on a global stage.

"A well-targeted skilled migration policy is a job creator, not a job taker."

The chief executive explained that Australia's skilled labour market is too small for Telstra's needs, meaning it has had to recruit more software engineers from other countries.

However, the telco is also working on partnering with local universities to help develop the skill sets it is looking for, including across software-defined networking, machine learning, and big data.

As a result, he said Telstra will commit to taking on a certain number of graduates with partner tertiary institutions every year.

"As a nation, we have to do more to get the balance right between what the government does, what the private sector needs, and what is being taught in institutes and universities," he added.

"When we look at the deep domain technology skills we need, when we look at our growth profile, Australia is not able to meet our requirements in the short term.

"We have to tap the global talent market while those issues are addressed domestically."

Penn attributed the loss of 8,000 roles at Telstra to the rollout of the National Broadband Network (NBN), which he told CEDA would result in the telco losing "between one third and half of our earnings".

He also pointed to the imminent launch of 5G, saying it will arrive "at exactly the same time that a number of other extraordinary technologies are maturing", including software-defined networks, artificial intelligence, the Internet of Things (IoT), machine learning, and cloud computing.

Last month, Penn told ZDNet that the telco had signed a swathe of agreements during CES 2019 in Las Vegas, with Telstra customers in Australia to have first access to 5G smartphones.

The chief executive hinted that while Telstra signed "a number of deals" with some of the biggest smartphone brands in the world, there are still other brands to work with. 

"We've come to a number of agreements with a number of providers that's going to give us access to devices, but there's still others -- the timing of their delivery of devices is not yet clear," he told ZDNet.

Penn said Telstra is not likely to see or test the exact devices on its network until a few weeks prior to them going on sale, but added that the carrier's team is working on their development.

"We're working with them behind the scenes, so our engineers are working together to test the devices. [By the time] we actually get to run them live in our commercial network, they're usually pretty well advanced," he said

"The device manufacturers themselves, they run to pretty tight timelines; Apple is an example, it runs an annual cycle, so they're up against themselves in terms of they're doing a lot of work to try and do the innovation that's necessary to bring the new experiences within their phone set, so their ability to then give those new phones to operators substantially in advance is not there."

Telstra exceeded its goal of switching on 200 5G sites in 2018, with Penn saying it reached 207 by the end of December, including across Canberra, Adelaide, Perththe Gold CoastToowoomba, Brisbane, Sydney, and Melbourne.

The telco has yet to disclose its goal for 2019.

"We wanted to make sure that we got national coverage, and regional and metro coverage, and now it really is a function of how quickly the device ecosystem moves forward, and that's quite dynamic at the moment," he said.

Telstra is currently engaged in discussions to thrash out a new enterprise bargaining agreement with its workers. Discussions have been ongoing for six months, with the Communication Workers Union thus far not pleased with what Telstra has offered. The union this week called on members to vote to take protected industrial action.

"Telstra's unfair wage offer means your family's ability to meet the ever-rising cost of living has diminished by over half a percent," the union said.

"Andy Penn-ypincher's pay offer isn't a wage rise -- it is a pay cut, in real terms."

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