As AI functionality is rolled out across products from smart home security devices to our smartphones, telcos will play a crucial role as facilitators of bringing that technology to end consumers in different parts of the country.
Telstra CEO Vicki Brady says that AI is now front and centre across the company’s mission to support connectivity. It has already started building the infrastructure to carry data for AI-based tech.
As the demand for data rises exponentially in AI processes, there has been a growth in giant data centres that house graphics-processing units, the powerful chips used to train and run generative AI.
In Australia, large investments are being pumped into data centres; this month, Blackstone paid almost $24 billion for Australian operator AirTrunk.
Capacity in Australia is expected to increase by more than 18 per cent at an annualised rate into next decade.
“That’s all got to be connected. None of that can operate as an island,” Brady told The Australian.
“We’re going to see massive demand for connectivity to help support AI and all of its benefits that it can bring. There’s a need for that connectivity to get more sophisticated again. So we are in an investment cycle to help enable it.”
The amount of data moving through Telstra’s mobile network has reportedly grown by 20 per cent over the last financial year.
Telcos are now under pressure to build capacity to support further growth, which means a rise in capex plans to lay cables and build out existing wireless networks.
Telstra is already spending $1.6 billion on the ultra-fast intercity fibre network under construction and connecting Australia’s major capitals.
The project is rolling out more than 14,000km of new cable, with 2000km already built. The network is expected to start contributing revenue in the second half of next year. Once complete, it is forecast to add at least $200 million in income eventually.
In a hint as to who the biggest users of AI will be, Telstra signed on Microsoft as one of the foundation partners of its new network.
AI will also be a major theme of Telstra’s 2030 strategy, with Brady and her team finalising the telco’s next five-year transformation programme.
Brady says that using AI at Telstra’s business also means giving her staff the tools they require from the top and into the call centres.
Brady is practical that in the shift to AI, there will be some functions that move to full automation and therefore jobs will be lost.
“All jobs are going to look different in five years’ time,” Brady says. “Our approach is to invest in our people, to leverage this so that it makes their jobs better, delivers better outcomes for our customers. But of course, as you deploy new technology, you’re always looking to be more efficient in the way you run your business as well.”
In May, the company announced that up to 2,800 Telstra workers would be retrenched by the year’s end, with plans to reduce its workforce in an AI-driven “reset” of its enterprise arm.
Brady’s 2030 strategy could have Telstra play a bigger role in data centres too, not the hyper-scaler sites but the mini-facilities that are physically located closer to businesses.
The telco already operates six data centres but is exploring options for so-called “edge” sites using the facilities of its fixed network exchanges, which are already connected to the communications network and high-capacity energy grid.
Brady is working through how AI can be advantageous for Telstra’s business model. The company recently switched on smart modems across its fixed broadband business.
Already, AI has helped identify and take more than 500,000 preventive actions that avoided service interruptions and the need for customers to call out or for Telstra to call them. She estimates this has saved $13.5 million in just six months.
Elsewhere, Telstra is trialling AI on the mobile network to help save power by putting unused sites into sleep mode and switching on as demand returns. So far, that’s reduced consumption by about 2 per cent a day. That’s significant, with energy one of Telstra’s biggest single costs outside of employees.
Last month, Telstra reported full-year profits of $1.8 billion, down 13 per cent, and $23.5 billion in total income for the 2024 financial year.
