Inside Telstra’s mission to disrupt itself to seize AI boom

Telstra chief executive Vicki Brady says the telco needs to ‘disrupt the status quo’ and monetise its network so the AI boom doesn’t slip through its fingers, allowing tech titans to cut its lunch.

Telstra boss Vicki Brady says the telco has an opportunity to ‘lead and share’ in the AI boom, ‘but we’re going to need to do things differently, and disrupt the status quo’.

Telstra chief executive Vicki Brady says the telco needs to “disrupt the status quo” and monetise its network so the artificial intelligence boom doesn’t slip through its fingers, allowing tech titans to cut its lunch.

Ms Brady told the Mobile World Congress in Barcelona late on Monday traditional telcos needed to be upended to ensure Telstra gains a slice of the “connectivity revolution”.

She said telcos failed to capitalise a decade ago on the shift from 3G to 4G, which heralded the streaming era and demand “for more sophisticated services”.

“The value didn’t go to us, because we didn’t change the commercial model,” Ms Brady said.

“This time, at Telstra, we are thinking about our network as a product with its own commercial value. It’s forcing us to think about how we productise it, price it, and go to market in new ways – all things we need to think about differently.

“When you look at the trends, you can see the massive opportunity this next cycle is going to create, and the economic and social benefits it will bring. We have the opportunity to lead that and share in it, but we’re going to need to do things differently, and disrupt the status quo.”

Cost-cutting has been a key theme at Telstra since Ms Brady succeeded Andy Penn in late 2022, eToro market analyst Josh Gilbert said last month.

Ms Brady said last year that Telstra was struggling to keep up with Silicon Valley – which has been pursuing its lucrative enterprise clients – prompting it to axe 2800 staff, or 9 per cent of its workforce, last May and underscoring the need to change dramatically to secure future growth.

Telstra for the second time in a decade has found itself in the middle of a tech revolution. This time its role is as the enabler of AI. The networks Telstra builds and operates will need to be big enough, and sophisticated enough, and have the capacity to support the massive uplift in demand for data that’s on the way.

At MWC Ms Brady said she “didn’t have all the answers” about how Telstra could monetise its network to create more value, but there were several options worth considering.

She said application programming interfaces – or the connection between computers or computer programs – was one way Telstra could capitalise on the boom. It is also spending $700m on an artificial intelligence joint venture with consultancy titan Accenture.

“We are digitising and partnering with Accenture to rapidly accelerate our AI road map, including how we apply AI to optimise network management,” she said.

“And we have developed a decoupled, API-based architecture, consistent with TM Forum standards, so we have a platform the entire business can use in a modular and reusable way. We’re not there yet, but we’re working on shifting to this modular approach.

“We don’t have all the answers today, but the opportunity is absolutely there. And we need to step into that as an industry, especially as we deliver more sophisticated connectivity and build more capacity. We need to think deeply about how we get value from that.”