The Australian government buying back the copper network from Telstra almost 20 years after selling it to the public is a way for Telstra to move away from fixed line services, according to CEO David Thodey. Under the framework for a revise agreement between NBN Co and Telstra, the former government-owned incumbent telecommunications company will progressively hand over its copper and HFC network assets to NBN Co that will be used as part of a “multi-technology mix” model of the NBN that includes HFC and fibre to the node, in addition to the existing fibre to the premises, fixed wireless and satellite services.
Telstra announced today the launch of its global cloud-based unified communications service, the latest offering in its long-term partnership with networking giant Cisco. The service will be delivered through Telstra’s cloud infrastructure, which extends to seven locations around the world, including the United States, Europe, and the Asia Pacific region. Telstra’s global solution, launched in partnership with Cisco last year, is now available across four continents in 25 countries, and is delivered over Telstra’s worldwide network extending to more than 2,000 point of presence according to Telstra global enterprise and services director of marketing Nathan Bell.
The change in business for Telstra Corporation Ltd (OTCPK:TLSYY) from what originally was Australia’s public telephone company to an increasingly international telecom and enterprise service company can be seen very easily within its latest 2014 full year results. As the market leader in Australian home phone, broadband and mobile phone service, the $64.3 billion company is known for its solid dividend payment, which currently has a yield of 5.1%.
Telstra’s Network Applications & Services (NAS) business grew by 27.8 percent in the 2014 financial year, totalling $1.9 billion in revenue. While the NAS unit only accounts for eight percent of overall products sales revenue, the carrier’s IT services business is growing fast – the unit has added $635 million in revenue since 2012. That growth is coming from three areas: managed network services are the big driver, increasing by 55.7 percent in the 2014 financial year. A key win was a Department of Defence contract during the year.
Telstra will spend US$270 million (A$291 million) to boost its stake in Silicon Valley-based video streaming and analytics company Ooyala from 23 percent to 98 percent, following an incremental investment of US$61 million over the last two years. Telstra will incorporate Ooyala – which was founded in 2007 – into its global applications and platforms group, subject to customary closing conditions.
Vodafone will re-allocate the 850MHz spectrum used for its 3G network to expand its 4G coverage, joining the race against Telstra and Optus as Australia’s biggest telcos look to beef up their 4G offerings. Vodafone today announced it would refarm the spectrum to speed up its 4G rollout in order to reach a target of 4G coverage across 95 percent of the country’s metropolitan population by the end of the year.
More than 460 existing Telstra roles, plus another 208 contractor roles, have been tagged for redundancy as the telco seeks cheaper labour with outsourced partners in India. The cuts represent 15 per cent of the 4100 staff employed in Telstra’s Global Services division, which delivers cloud computing and network application services for big-ticket corporate clients and government.
Telstra and Optus have secured early access to the 700MHz spectrum auctioned off by the Government last year, and will switch on the first 4G services in the band in a number of areas around the country over the coming weeks. The official launch of 700MHz spectrum, when technical trials are due to commence, is set for January 1 next year.
Japanese incumbent telco Nippon Telegraph and Telephone is reportedly lobbying Telstra for a partnership, amidst growing competition from Optus’ parent SingTel. In an article in the Australian Financial Review, NTT urges the Australian telco to use its global network of data centres, which would be connected to Telstra’s own networks. The news comes as Telstra repositions itself from being a traditional telecommunications company towards being a network applications and services (NAS) provider with a focus on south-east Asia.
Telstra has won a $150 million deal with NBN Co for the Government’s pilot of fibre-to-the-node technology in regional areas across Queensland and NSW. Telstra will build around 1000 nodes in certain parts of the two states over the next year to serve around 206,000 homes and businesses, as first reported by the Financial Review. The trial forms part of the Coalition’s attempts to move the NBN from a predominantly fibre-based network to its multi-technology mix.
Telstra has announced it will offer a point of presence on the East Coast of the United States for its VMware-based cloud infrastructure services, which are currently offered in the United Kingdom, Hong Kong, Singapore and Australia. Nathan Bell, Telstra’s global marketing director told iTnews that the telco aspires to offer a suite of cloud services across a global footprint and with a consistent configuration.”
Tasmanian police are investigating how vandals managed to cut Telstra cables in three locations in one suburb on Wednesday night, causing significant disruption to the local network. The vandalism is the latest in a series of attacks on Telstra property in the state, with two of the areas targeted on Wednesday having been hit three times in as many months.
Telstra is building its biggest mobile exchange on wheels (MEOW) in response to a review of its emergency connectivity strategy in the wake of the 2012 fire at its Warrnambool exchange. The November 2012 fire knocked out services to up to 60,000 users and caused damage to 60 percent of the exchange.
While last year’s $2 billion sale of the Hong Kong mobile phone company CSL was seen as an Asian retreat by some analysts, Mr Thodey said nothing could be further from the truth and Telstra is ramping up its engagement with Asia, with its enterprise and services division now run with an international focus.
Telstra has extended its reach in Europe with the telco’s enterprise services -focused unit,Telstra Global, signing a cloud computing deal with GTS Central Europe. Under the terms of the new Network-to-Network Interconnection (NNI) agreement, Telstra Global will get to leverage GTS’s points of presence (PoP) across Central and Eastern Europe. It will also see Telstra Global’s existing IP VPN service coverage extend beyond 1,900 PoPs, covering 230 countries and territories worldwide.
iiNet chairman Michael Smith says the Perth company will use a $350 million war chest to make media and internet acquisitions as part of an “aggressive” campaign to avoid becoming a so-called “dumb-pipe” broadband provider. Mr Smith said the company aimed to lock in its new three-year strategy by June 30 off the back of a board-level expedition to Silicon Valley in March. The move comes as telecommunications operators around the world hunt for new sources of revenue as traditional profits from services like phone calls and text messages shift to internet-enabled companies like WhatsApp, who offer the same products at a fraction of the cost.
As Telstra Corporation Ltd (ASX: TLS) shares creep back towards their 52-week high, it’s a chance to ask ourselves if there is still value at current prices. In my opinion, the answer is yes. Until recently, many investors perceived Telstra as the ex-government, home phone and Sensis business which was outdated and sure to fail in a world of nimble technology companies. But it is no more.
Telstra and Cisco Systems have announced a first-of-its-kind alliance that signals an inflexion point in the evolution of the global infrastructure-as-a-service (IaaS) market. Even as Australia’s largest telco, Telstra has decided that the economies of scale required for sustainable success as an IaaS provider are beyond its means. Rather than invest in a potentially sub-scale home-tailored cloud computing infrastructure, Telstra has decided to partner with a global provider of ready-to-use cloud platforms.
SYDNEY— Telstra Corp. TLS.AU +0.97% lifted its dividend payout for the first time in eight years after infrastructure upgrades helped Australia’s biggest telecommunications firm lure more smartphone customers. The company also said it was looking to Asia, and technologies such as cloud computing, as it explores acquisitions to diversify away from its traditional fixed-line phone business.