Telstra’s bold reinvention breaks free from its ‘dumb pipes’ past

Paul Budde, Telstra’s new game plan is brave, clever and banking in a mentality shift.

Telstra’s new Connected Future 30 The strategy represents one of the attempts to go beyond the heritage as a public service provider by the company. As someone who has long been commenting on Telco’s struggles to overcome a “pipe” role, I find this last plan both promising and full of significant challenges.

The core of the strategy is to switch from the commodified connection to the premium, to differentiated digital infrastructure. This includes reorganizing the network as a programmable product package, guaranteed delay, uplink performance, security and API -guided functionality. Theoretically, this allows Telstra to charge more for special services and effectively ends the model that matches one body.

This ambition is not new. I remember a discussion on TV with the old Telstra director Ted Pretty Around 2000, he enthusiastically summarized Telstra’s brave movement to become a high -valuable technology company.

When I question the company’s ability to make such a transformation, he challenged me:

“So you want Telstra to join stupid pipes?”

I answered:

“No, Ted – Smart Pipes.”

Now, about 25 years later, Telstra finally builds these smart pipes. However, it is seen whether this model can really do it.

Changing perceptions is harder than changing technology

Telstra CEO Vick Brady As we have discussed many times here – he states that Telcos could not have historically capture the value during past technological changes. And not the first Telstra CEO promising transformation. The next 30 strategy demonstrates all the right sounds about artificial intelligence, cloud natural thinking and embracing the platform economy. The intention of making money from different network features and tightly integrating with corporate ecosystems, especially hyper scales is a logical evolution.

However, success does not depend on technical upgrades, but to market perception and consumer behavior.

Telstra’s customers, especially consumers and to justify higher prices SMEThese new services offer a real, understandable value. This is not a little task. Australia’s telecom market is mercilessly price -oriented. Most customers do not pay premiums unless they clearly understand what they pay, why they are important and how they are different from cheaper offers.

At the same time, this shift towards a differentiated connection can further weaken the remaining principles of net neutrality by giving priority to traffic based on a customer’s ability or willingness to pay more than others.

Large enterprises may have technical expertise to comprehend the value of programmable networks or API integration. However, Telstra’s training, marketing and direct sales for smaller businesses and households will have to invest. AI may help, but when customers are still asked to pay more for what is seen as a service service, it will not replace the need for communication from person to person.

This change is at least the risk of increasing costs in the short term and expanding digital division. If only rich customers can access premium network properties, the commitment to the fair connection will be weakened as embodied in Australia’s original NBN vision.

A strategic change in the middle of a stagnant market

The main problem Telstra is trying to solve is also clear: the telecom industry is stuck. While the data demand continued to increase, the returns did not survive. Telcos relied on costs instead of growth to maintain the profit globally. As Product and Technology Group Manager Kim Krogh Andersen The specified, computer and storage enterprises are much better than traditional felcos.

Therefore, the strategy of “producing” the network – making pricing more transparent and more modular offers. Consumers can buy consumers if a high -level mobile or fiber plan shows that the superior real -time game offers a smooth remote work or guaranteed video quality.

But still, this is a huge “if”.

The company also emphasized its internal AI ambitions from customer service automation to AI-operated software development and network operations. These innovations can provide efficiency gains and cost savings, but they come with deterioration, including labor reduction.

According to the loan, Brady acknowledges that Telstra could not make money from previous technology changes. This is self -awareness. However, considering Telstra’s record, the burden of evidence stands against the company to show that it is different this time.

At the same time, Telstra’s strategy should be seen in the light of a greater existential challenge: the rise of hypersensites. Global giants such as Amazon, Microsoft and Google are not only potential partners, but also direct threats to the traditional Telco model. These companies control cloud platforms, developing ecosystems and increasingly customer relationships. In many cases, they form their own infrastructure from submarine cables to satellite networks and completely reduce their confidence in fescos.

Telstra’s effort to reshape itself as a programmable, differentiated digital infrastructure provider is partly a survival strategy – an attempt to stay relevant and indispensable in a world in which connection risks are invisible and commodified. (I also discussed hyper scales here.)

Is it a platform or pipe?

Communication Day‘S Grame Lynch He also stated that Telstra is not just changing the strategy, but also changes his language. Net Network as a Product ”,“ Agent AI ”and“ API-FIRST Infrastructure ”are not traditional felcos, but the conditions of hyper scales and cloud platforms. Telstra no longer does not want to be tried on average income or chaos per user. He wants to be valued as a digital infrastructure platform.

A smart move for capital markets. However, for regulators and daily Australians, the old universal service, affordable price and public interest may be locked in paradigms. If Australia wants to establish a future -resistant digital economy, as Lynch claims, regulators and policy makers should also update their frameworks to be involved in this new infrastructure logic.

Latest Thoughts

I support the Telstra aspect. Delayed. However, this transformation is not only about raising technology or rewriting the marketing copy. How Telstra interacts with its customers and a wider ecosystem requires a deep, structural change in how the telecommunication perceives a great cultural transformation.

Whether Telstra is successful will depend on fiber features or less confidence, clarity, and the ability to provide differentiated services that people really want and meet. If the company can remove it, it will have long for a long time. If not, we will face the risk of recurring the past: a bold vision, which is partially realized, shortening in the face of complexity and inertia.

Paul Budde is an independent Australian columnist and general manager Paul Budde ConsultingAn independent telecommunications research and consultancy organization. You can follow Paul on Twitter @Paulbudde.

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