Skip to main content

Q&A: The ins and outs of the Australian telco market

We spoke to Tom Homer, Head of EMEA and the Americas for Australian telecommunications company Telstra, to discuss the telco market down under and expected trends for the rest of 2016.

What's been happening for Telstra in the last 12 months?

Telstra is a telecommunications and technology company with heritage that is proudly Australian and a longstanding, growing international business. Over the past 12 months we have grown our international business in three ways:

  1. Leveraging our network to be a high-value communications partner for companies operating in the Asia-Pacific region through our Global Enterprise and Services division
  2. In-country investment opportunities focused on connectivity
  3. Bringing a suite of innovative solutions to market over the longer-term through targeted investments

From an enterprise perspective, we continue to extend our reach as a result of our acquisition of Pacnet Limited, which doubled our customer base in Asia and greatly increased our network reach and data centre capabilities.

Additionally, we have started offering what is called Software Defined Networking and Network Functions Virtualisation on our network across our global Points-of-Presence, which makes it easier for customers to provision the services they need quickly and simply.

Beyond the traditional telecommunications services part of our business, we are also developing our business in new areas such as eHealth and video streaming.

Can you tell us about your plans for EMEA?

Telstra’s need for significant future growth at scale cannot come from our traditional businesses in Australia alone – it has to come from overseas, from new markets and products outside of traditional telco services and outside of Australia.

In EMEA, Telstra is bringing together innovative technology, capability and talent from around the world to deliver the best experiences for our customers here. Our scale and reach in Asia, where we now manage 30 per cent of the intra-Asia data traffic, is what gives us a competitive advantage in the European market for customers who want to do business there.

Outside of our enterprise business, in EMEA we are actively pursuing opportunities with a longer term horizon, including eHealth and video streaming.

On the eHealth front we are developing products and services that help create a better connected healthcare system and are using technology to build a safer, more convenient way to manage our health – with patients at the centre. Here in EMEA, almost 12 months ago we acquired Dr. Foster, a UK head-quartered health analytics business that works with healthcare organisations to achieve sustainable improvements in their performance through better use of data.

We also have a growing video analytics business through Ooyala, a US-based subsidiary of Telstra with UK operations involved in video streaming and analytics, which has been complemented by the acquisition of Videoplaza, a Swedish-based leader in video advertising, and Nativ, a European cloud media logistics software provider.

How does the Australian market differ to that of Europe? Does either pose any unique challenges or opportunities?

The Australian market is going through some significant and quite unique structural changes on the fixed lined side. Under the National Broadband Network (NBN) policy, a new layer 2 network is being rolled out to all Australian homes by a Government agency, NBN Co, using a mix of fibre-to-the-premise, fibre-to-the-node, HFC, fixed wireless and satellite technologies. This network is being progressively turned on as it is rolled out, and once complete all retailers, including Telstra, will use this network to provide consumer and business services.

On the wireless side, Australia is a global leader, with a relatively light touch regulatory approach fuelling a highly competitive mobiles market and early adoption of new technologies. Despite, the fact Australia has a relatively small population spread out over a very large geographic area, Telstra’s mobile network reaches more than 99 per cent of the population with 4G at 96 per cent. Telstra’s network now utilises 700 MHz and LTE Advanced technology combining 1800MHz and 700MHz spectrum bands, and 5G trials are scheduled for the Commonwealth Games on the Gold Coast in 2018.

Underlying all this, across Australia and Europe, is the increasing demand from consumers and businesses for digital and online services underpinned by ubiquitous connectivity. This creates a lot of exciting opportunities for telcos to meet the huge growth for our products.

How has the telco industry changed in the last 12 months or so?

In my view, there is no doubt that software has dominated the IT industry over the past 12 months, which is particularly evident in the rise of software defined networking (SDN).

Organisations are facing ever increasing demands on network bandwidth, which is being driven largely by the evolution of modern, dispersed and collaborative workplaces, often with the need to transport rich content and communicate through new digital channels.

Business leaders are adopting "anywhere, anytime" flexible workforces, with an appetite for cloud service adoption and application consumption. This consumption, coupled with technologies available to collect valuable business insights, is producing huge quantities of data that is growing exponentially and must be delivered quickly, securely and efficiently.

In order to achieve success in the future, high capacity and low latency SDN solutions, which can seamlessly allocate network resources based on individual requirements are the way forward. With this level of intelligence, network providers can demonstrate cloud like characteristics such as self-service, on-demand and scalability through a unified delivery infrastructure.

What industry developments are you expecting to see in 2016?

One of the key developments is around cybersecurity and the emergence of a new data supply chain that is moving beyond the enterprise perimeter, creating unique vulnerabilities that we haven’t experienced before. In 2016, we need to become much more intelligent about how we manage cloud based services that sit outside the enterprise.

This year we’re also moving away from a world where it’s just about a customer’s enterprise private cloud – that they have built inside their own data centre – or the public cloud, which is built in someone else’s data centres. The new approach is for customers to take workloads and making intelligent decisions about where to put them; for example, should a customer put all their e-commerce back end in the public cloud and perhaps keep all their customer data inside their private IT cloud?

These types of decisions are now being made available because we have consistent reference infrastructure between private and public clouds, which allow us to move seamlessly across the two. The opportunity in 2016 is the network that connects these clouds – we are developing networks that are as flexible as the cloud environment where we’re running our applications.

Image Credit: Shutterstock/ a454