Telstra boss says all staff must use AI but can work from home as competition intensifies
As mobile growth slumps to a four-year low, Telstra’s boss Vicki Brady has unveiled an ambitious plan, mandating the use of AI. Her staff can work from home with Telstra’s blessing, as the telco breaks ranks with corporate Australia.
Telstra chief executive Vicki Brady says all of the telco’s staff are expected to use artificial intelligence daily to become more efficient, and can reap the benefits of being able to work anywhere.
“Flexible working is absolutely a core part of how we operate,” she said, but employees are under orders to sharpen their digital skills “applying AI in every job” as competition in Australia’s telco market intensifies.
She was speaking as growth in Telstra’s mobile business slumped to its lowest level in four years having shut its 3G network, and as Optus and TPG Telecom launched their $1.6bn network sharing deal, given Australians greater choice.
While some analysts said the lacklustre mobile growth was disappointing, Ms Brady attempted to keep investors onside, announcing a $1bn share buyback, while hiking Telstra’s annual dividends by 5.6 per cent to 19c.
Two months ago, Australia’s biggest telco completed a $750m share buyback.
“We are focused on continuing to deliver value for our shareholders, including through our core business cash flow, active portfolio and investment management, and disciplined capital management,” Ms Brady said.
“As we consider the best way to deliver these outcomes, we carefully consider the balance between investing in the growth of our business and the potential for additional shareholder returns.”
For Telstra staff this means thinking about how AI can lift productivity and doing it with hybrid working.
“We've got to really radically innovate in the core of our business. And hybrid working, I would say, for me, it’s one of those things,” Ms Brady said.
“That looks different for different teams across our business, but absolutely some time together, face-to-face, is part of that in bringing the best out of teams.
“We want to be high performing. That’s what we aim to be ... We can drive efficiency and do it in a way that brings out the best in our teams, by providing flexible options in terms of working.”
Like Commonwealth Bank CEO Matt Comyn, Ms Brady is also a big user of AI, and wants it embedded in daily workflows. Telstra has become Microsoft’s biggest Australian customer of its Copilot AI assistant, acquiring 21,000 licences, and has launched a data and AI academy to train employees.
“That’s a big investment, but that’s an investment in our teams to really gain that experience in how to apply AI in every job across our business. And when I say every job, I mean every job,” Ms Brady said.
“One of our early lessons here was you can learn the theory of it, but you've got to have that practical hands on ability to try it, to use it, to figure out how it can deliver benefits for you ... So being able to listen to a 30-minute podcast rather than trawl through hundreds of pages of a report. Some of those tips and tricks are definitely the things that we’re finding is working. And we’re absolutely finding our teams really curious and eager to learn.”
Telstra’s annual net profit soared 31 per cent to $2.34bn, largely thanks to cost-cutting under its T25 strategy. Revenue was flat at $23.9bn.
Telstra will pay shareholders a final dividend of 9.5c, fully franked on September 25. It takes the total for the year to 19c a share, up 5.6 per cent.
Telstra’s mobile product income firmed 2.7 per cent to $11.02bn, disappointing some analysts, prompting a 2.6 per cent fall in its share price on Thursday. Roger Samuel from Jefferies said on a like-for-like basis Telstra only added 4000 postpaid mobile subscriptions in the second half.
Most of the overall mobile growth came from its wholesale business, or brands like Woolworths and Aldi selling their own mobile plans under Telstra’s network.
Competition intensified after Optus and TPG launched their deal to share mobile towers.
But Ms Brady said a competitive mobile market was “not new” and attributed the slower growth to the 3G shutdown as well as Telstra switching off Covid-19 era plans.
“When you do a transition of generations in mobile networks, obviously that’s a big deal,” Ms Brady said.
“We won’t have a generational change in mobile networks in FY26. But you know, the mobile business is dynamic. Customers make different choices.”
Telstra also announced on Thursday that it would sell 75 per cent of its cloud business Versent Group to Infosys for $233m. Ms Brady said it would strengthen an artificial intelligence partnership between the two companies.
“For our enterprise portfolio, this means sharpening our focus on the key capabilities that deliver on the strategy and building deep partnerships that maximise the value of our networks,” Ms Brady said.
“Our partnership with Infosys reflects our confidence in the value we can unlock together. Their global scale, deep industry knowledge, and culture of innovation and service excellence will be instrumental in accelerating Versent Group’s growth and impact across the region.”
Enterprise EBITDA also rose by $103m, as Telstra “resets” the previously poor performing division.
International earnings fell $96m. “We have completed a strategic review of this business and are now taking action, including to reduce costs,” Ms Brady said.
Overall, EBITDA was $8.02bn, which Telstra expects will rise to $8.15bn-$8.45bn in the year ahead.
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