Telstra pledges $3bn to network, systems overhaul

Telstra will spend an extra $3 billion over the next three years to improve its networks and customer experience following a spate of outages earlier this year.

During its full-year financial results briefing today, the telco said it would confirm details of the investment program progressively over the next three years to keep commercially sensitive information out of the hands of its competitors.

It said it would focus on smaller projects to "remove customer pain points" first and look at "digitising and simplifying large parts of the business" in the longer term.

Smaller programs of work include offering more digital sales and service channels for customers. 

The $3 billion investment follows Telstra's pledge to spend $250 million over the next 12 months on its networks following a series of damaging outages in the first half of 2016. Telstra invested $4 billion worth of capital into its networks in most recent full fiscal year.

“Our customers and our networks are our biggest assets. We must invest to set new standards and deliver excellent experiences for our customers,” Telstra CEO Andy Penn said in a statement.

"We need to retire old technology and systems that slow down and complicate how customers are served."

Legacy systems will be decommissioned in favour of investment in "architectural advances" like virtualisation and increased automation, Telstra said.

Network capacity will be boosted to cater for increasing demand for core services, it said, with separate work streams to target consumer and enterprise customers.

It will also make "strategic investments" into its fixed network services to cater for "rapid increases" in data consumption by home and business users. 

Despite the succession of network outages earlier this year, Telstra said it had added an extra 560,000 domestic retail mobile customers in the year to reach a total of 17.2 million services, and 235,000 local retail fixed-line customers to reach at total of 3.4 million.

However, the outages had an impact on the telco's net promoter score, which fell by four points in the year.

“Work still needs to be done to improve our systems and processes that can cause customer frustration and delay, and to ensure that we consistently deliver a great service experience,” Penn said.

“We know that customers expect more from us as their reliance on smart devices continues to grow. This is why improving the customer experience is paramount, and why network interruptions in the second half were particularly disappointing."

Telstra today reported a 36 percent increase in net profit to $5.8 billion, $1.8 billion of which came from the sale of Autohome shares. Total income grew 3.6 percent to $27.1 billion.

It also revealed it would hand $1.5 billion back to shareholders through a $1.25 billion off-market share buy-back and a $250 million on-market share buy-back. These will be funded from surplus cash and accumulated profits, including from the Autohome share sale.