Telstra plugs into power, plans three-way split of business

Telstra is eyeing a slice of the energy market in a move that could see the telco sell power plans alongside mobiles phones.

Telstra chief executive Andy Penn: ‘We’re exploring bringing all of this experience to the table with a consumer offering and we plan to do so with a simple affordable solution at a low cost to us.’

Telstra is eyeing a slice of the energy market in a move that could see the telco sell power plans alongside mobiles phones.

Outlining plans for Telstra to split its business three ways on Thursday, chief executive Andy Penn said Telstra was exploring opportunities to re-sell energy plans to its millions of customers.

It is the latest major company to develop plans around power use and seek to leverage their energy footprint for customers. Earlier this week supermarket major Woolworths promised net positive carbon emissions by 2050, meaning it will not just be carbon-neutral but will remove carbon from the atmosphere.

“These plans are at an early stage, but we’re about to apply for the necessary licences and you will therefore become aware of them in the coming weeks,” Mr Penn told investors and analysts.

“We are one of the largest consumers of electricity in the country. We already underwrite projects that generate enough renewable energy to power about 100,000 homes, and we provide standby power that enables more renewable energy to be absorbed into the energy grid. We also deploy machine learning and Internet of Things to change the way we use energy. We have a very experienced energy team,” he said.

“All of these things help us access more renewable energy, and we help some of our larger customers to do exactly the same. We’re exploring bringing all of this experience to the table with a consumer offering and we plan to do so with a simple affordable solution at a low cost to us. We will do it with the same measured and conservative approach that we have applied to health over the last few years.”

Meanwhile Telstra remains bullish on 5G, with the telco’s networks and IT boss Nikos Katinakis declaring that early adoption of 5G is the single biggest opportunity for telcos this decade.

“We are significantly ahead of our competitors,” he said. “The device ecosystem is materialising a lot faster than previous generations of technology. We believe that customers who want to get the latest Samsung, Apple iPhone or any other device that already supports 5G will also want the network to use it, and we want to be there for them.

“We have three layers of spectrum that we are making available for 5G … We’re looking forward to the auction early next year of millimetre wave. While it’s not suitable for broad geographic coverage, it will allow us to meet organic capacity growth, scaling of services, and really optimised offerings like fixed wireless to a select group of customers.”

Apple’s latest iPhone 12 models do not support 5G millimetre wave frequencies outside the US, but future devices are expected to support the ultrafast technology. The government announced this month it would auction off millimetre wave spectrum next year.

Group executive Kim Krogh Andersen said Telstra now had more than 400,000 5G-enabled devices on its network, and was chasing a target of 750,000 Australians using the technology by the end of the year. He said Telstra’s first-mover advantage on 5G would allow it to offer nascent technologies like 8K video streaming and virtual reality content.

“At the moment, we are adding around 40,000 new 5G devices every week, of course accelerated by the latest iPhones. Our data shows us that our 5G customers are using about two times more data … and 72 per cent of the iPhone 12 devices are on our top three plans,” he said.

“We will also see an explosion of cloud gaming platforms emerging in Australia. I anticipate most of the big players launching some form of cloud gaming in the next one to two years — Microsoft xCloud, Google Stadia, Amazon Luna and many others.

“To capture these longer-term opportunities for 5G, the telco industry … needs to reinvent the current business model and move away from gigabytes and speed to an experience-centric business model. We believe we are extremely well positioned.”