Even as Telstra recently reached an agreement with SpaceX’s Starlink to test a Satellite-to-Mobile (direct-to-handset) text messaging capability for Australian conditions, it has now committed to spending $800 million to boost mobile coverage and increase internet speeds across its network over the next four years.
The money spent on its 5G network, boosting speeds and coverage in regional areas, will “absolutely cement and extend” its dominance, said Telstra chief executive Vicki Brady.
To fund its upgrade programme, the telco announced a $750 million share buyback programme this year. Telstra shares rose 5.6% to close 22¢ higher at $4.14 on Thursday.
Telstra chief executive Vicki Brady
The ambitious spending outlay comes at a time that the company has confirmed that overall net profit jumped 6.5% to $1.03 billion in the six months to December 31.
Its revenue rose 1.5% to $11.6 billion thanks to a strong performance in its consumer mobile business.
Telstra’s mobile phone business accounts for almost half the company’s total income, with price rises helping lift mobile income by 4.5% to $5.6 billion.
The telco has defended its decision to decouple hikes in its subscription prices to inflation, and has now shifted the focus to its plans to provide more extensive services in regional areas which are being targeted by its rivals through deals such as the TPG-Optus agreement.
Telstra response team.
Telstra claims that its services now reach 99.7% of Australia’s population.
It adds that its mobile network covers more than double the area of Optus’s network, and around three times the area of the Vodafone/TPG network.
It wants to go further not only by way of the $800 million upgrade, but also by way of its agreement with Starlink.
Potentially, Telstra could start by offering text message services using the satellite technology in remote areas, but that could eventually extend to voice and data access for phones as the technology matures in areas not reached by its mobile networks which would only require customers to have a clear line of sight to the sky and Starlink’s low earth orbiting satellite to establish a connection.
In a bid to modernise and streamline its operations, Telstra also said that it will spend around $700 million on artificial intelligence implementation across its business, with Accenture being brought on to oversee the implementation of AI across its operations.
