Telstra launches AI hub with Accenture in Silicon Valley as part of $700m venture

Australia’s biggest telco is setting up an AI hub in America’s Silicon Valley as part of a $700m investment to tackle soaring customer complaints and accelerate its transformation.

Telstra product and technology group executive Kim Krogh Andersen.

Telstra is setting up an artificial intelligence hub in Silicon Valley as part of a $700m investment to better tackle customer complaints and accelerate its lumbering digital transformation.

The hub at Mountain View, in California, will tap into the expertise of tech behemoths such as Nvidia and Databricks, and connect teams in Sydney, Melbourne and Bangalore. It form part of its AI joint venture with consulting group Accenture.

Kim Krogh Andersen, the executive charged with leading Telstra’s technology strategy, said the partnership would accelerate the telco’s plans to incorporate AI into everything it does – particularly in solving customer problems.

He said the rise of AI agents – which can run in the background, performing various tasks autonomously – has “changed the game” and Telstra needed to keep pace with the technology’s rapid development.

“We need to ensure we are always on the front foot, so we can ensure we are not only piloting things, but actually bringing it into the systemic execution and scaling of AI,” Mr Krogh Andersen said.

“Here in the valley … it is really the centre of thinking. We also wanted to ensure we had a dedicated team there where they could keep helping us be in front of that innovation but also where we could take difficult problems, put it there and get the work or at least started, so we can then scale that across the teams both in Australia and India.”

Commonwealth Bank has also launched a tech hub in Seattle to harness the expertise on the US west coast. Up to 200 of CBA’s staff will be rotated through the hub in the next year to strengthen the tech and AI skills of its Australian workforce.

Telstra’s AI hub will tap into the expertise of Nvidia, helmed by Jensen Huang.

Telstra is betting its future on artificial intelligence to make it not only more efficient after slashing thousands of jobs last year, but also identify faults before a customer is aware of a service outage.

Customer complaints to Telstra surged 9 per cent to 5591 in the three months to December 31, according to the Telecommunication Industry Ombudsman’s latest figures. The most common were no phone or internet service, delayed action and fees.

Mr Krogh Andersen said Telstra has been using AI for some time across its fixed services, just as NBN connections, to cut the number of outages and other interruptions.

“We call it a smart fix. Normally we identify problems. If you have a degradation in your performance … we can turn on the mobile part of the modem instead of the fixed (part),” he said.

“For the customer, that’s really meaning that they don’t even recognise they have that problem because it’s solved before they contact us.

“But of course, if the modem has crashed, then none of these things are working.”

And in that event, Telstra sends out a new modem via Australia Post, which can take days to arrive, rather than leveraging its retail network to allow a customer to pick up a replacement modem from a nearby Telstra store and get their internet running.

Part of the reason why Telstra still sends out modems is that they need to be configured to the customer’s service – a role that AI can potentially play in the future.

“That’s just what you can do when you start really pushing into these things and using the telemetry from all the software we have available. That’s just one example,” Mr Krogh Andersen said.

He said AI was already helping customers by reducing wait times for Telstra’s contact centre. It has already improved the effectiveness of its chatbot, as AI being is able to read thousands of Telstra’s policies and procedures, and provide customers with a more accurate and timely answer.

“Last year we actually avoided 650 calls from the customers – that’s quite significant,” he said.

“There’s a lot of these call centre or frontline use cases. There are cases in the network as well where we will use it to power efficiency. We have a lot of telemetry in the network that we are not necessarily taking full advantage of today.

“So when we use AI to do that and to work on that autonomous network then we can really ensure that customers will also get a better experience and help us where it matters most. This joint venture (with Accenture) … and also this hub, will accelerate this further to get these benefits faster than we have been able to do ourselves.”

Accenture chief technology officer Karthik Narain said: “Telstra’s Al strategy is a bold, whole-of-business strategy that sets a new industry standard.

“Strategic partnerships, like what we have with Telstra, are an important source of competitive advantage for winning in this Al era.

“They bring out the best out of both organisations. This hub represents a nexus of breakthrough innovation for our teams in Silicon Valley, Australia and India, enabling co-development and learning across the ecosystem.”

Originally published as Telstra launches AI hub with Accenture in Silicon Valley as part of $700m venture