Telstra to invest AU$250m in network

Telstra CEO Andrew Penn has announced that the telecommunications giant will be investing AU$250 million in its network over the next six to 12 months in the wake of its series of outages earlier this year.

"Over the past few months, we have experienced some network interruptions that have impacted you, our customers," Penn wrote on the Telstra Exchange blog on Wednesday morning.

"I am writing this note today to update you on what we are continuing to do to address these issues. In May, we announced the results of a review into our mobile network. We are very advanced in implementing the recommendations from that review. We have also recently completed an end-to-end review of our core network and IT systems, pinpointing sources of potential risk.

"As a result of this work, we will be investing AU$250 million from our existing capital program, within our 15 percent capex to sales ratio, over the next six to 12 months to provide a higher degree of network resilience and improved network performance."

The investment will be made in three major areas: The previously mentioned AU$50 million to be spent on improving mobile network resiliency by creating better real-time monitoring and speeding up recovery time; AU$100 million on increasing the core fixed-line network's reliability and resiliency; and AU$100 million on upping its ADSL broadband capacity to cope with demand.

Mike Wright, Telstra Group managing director of Networks, said the fixed-line spending will mostly go towards increasing redundancy and employing newer network technologies.

"We've had a good look at resilience and how we can actually put increased levels of redundancy in the core that's already highly redundant, but we look at areas where we can even improve that for some of the extreme cases, because what we're really trying to do is protect against events that might happen on the network," Wright told media on Wednesday afternoon.

"And the other area where we're looking to do is we're actually going to bring forward some next-generation technologies and get them into the core network earlier, because we know those technologies can scale a lot more quickly, they have better instrumentation, and we think they'll give us a bit of means with making the core network more reliable."

According to Penn, the spending is part of the ordinary program of allocating capital that the telco undergoes at the beginning of each financial year; the increased spending simply demonstrates that it is prioritising network resiliency to a higher degree in order to continue being a leading player in all network technologies.

"We've always been at the forefront of new technologies, whether it be 3G, whether it be 4G, whether it be other new technologies within the fixed network -- and we're absolutely committed to continue to do that, and we're currently doing a lot of work on what that looks like for the future, what networks look like over the next three to four years, including through 5G, where as you know we'll be running one of the first trials live with the Commonwealth games in 2018 -- whether it be in Wi-Fi, whether it be in voice over fixed networks, whether it be in network convergence," Penn said during a call with media.

"A lot of things we all know is the network will only increase in importance for everybody, whether they be traditional consumer customers or small to medium businesses and large businesses as well."

Telstra already spends AU$4 billion a year across all of its networks.

Telstra had a rough start to 2016, with customers subjected to three major outages over a period of six weeks: The first on February 22, which affected prepaid and post-paid mobile services and was caused by "embarrassing human error"; the second on March 17, which involved an hours-long national mobile data and voice outage; and the third on March 22, which was a smaller voice outage.

Telstra also experienced a mobile data services outage and a broadband service outage in the following months.

The first three outages led Telstra to commit to spending the aforementioned AU$50 million on improving the monitoring and recovery times of its network.

Of this AU$50 million, AU$25 million is being spent on installing monitoring equipment and tools for improved real-time traffic monitoring, with the other half going towards improving network recovery time.

According to chief operating officer Kate McKenzie, Telstra's mobile network now carries 50 percent more data than it did a year ago, meaning it is under far greater strain. As a result of a network review, Telstra implemented various measures to deal with this and prevent future issues.

"We have increased the number of redundant links on the nodes which were involved in the 9 February disruption, and we have added new software features that limit the number of customers who would be required to re-register," McKenzie explained.

"We have also added more capacity to the core network, as well as introducing additional checks and balances to key network element restarts.

"In addition, we now have more resilience in our international connectivity, and we have added another redundant link from Perth to Sydney.

"We have also made other network changes to reduce the impact of international IP traffic on domestic IP traffic that addresses the root cause of the 17 March incident."

Updated at 2.45pm AEST, June 29: Added comments from Penn and Wright.