Telstra will end one transformation and go straight into another, unveiling a fresh program called T25 that will run for three years from July 2022 and remove another half a billion of net fixed costs.
CEO Andrew Penn told an investor day on Thursday that the new transformation would pick up where the telco’s current T22 transformation leaves off.
Under T22, Telstra cut thousands of staff and contractors and slashed its costs, though it also hired about 1500 people in growth areas of the organisation.
The net effect of T22 was on full display at the telco’s recent annual results, where profits rose and Penn said that “hard transformational work” was beginning to pay off.
However, he noted today that there is more to do around customer experience, its network and technology, as well as in creating “sustained growth and value for shareholders” and a great place for staff to work.
The result of that is the new T25 transformation.
“If T22 was a strategy of necessity, T25 is a strategy for growth,” Penn said.
“Today’s announcement of T25 marks our transition from transformation to growth, from a strategy we had to do, to a strategy we want to do to focus on growth.
“It is a strategy that builds on the strong foundations we have built over the last three years and remains focused on what matters most – our customers, our people, our shareholders and on supporting the creation of a vibrant digital economy for Australia.”
Penn promised “personalised and localised [support] for individual customers using predictive analysis”.
“We will establish a fully integrated channel experience so customers wanting a telco product or service, energy, tech equipment or an integrated home solution, can use the channel of their choice at a time of their choice,” he said.
“On top of this, our customer experience will become even more localised and, as a result, customers will be able to call us and speak to an Australian contact centre service rep or visit a local expert in our Telstra owned store network.
“We will use technology, AI and analytics to provide customers a more personalised experience with products and services, and to predict and resolve issues before customers know they are happening.”
Penn said that Telstra would also remodel itself as a “one-stop-service shop” for enterprise customers, mirroring a structure for servicing corporate customers that is being seen in other parts of the sector.
He also said the company’s 5G network would be extended to cover 95 percent of the Australian population.
“We expect 80 percent of all mobile traffic to be on 5G by FY25,” Penn said.
Shareholders are also expected to be given extra attention between FY23 and FY25.
“Telstra will aim for sustained growth and value by targeting mid-single digit underlying EBITDA and high-teens underlying earnings per share CAGR from FY21 to FY25,” the telco said.
“T25 also aims to deliver $500 million of net cost reductions, cash conversion and generation, active portfolio management and shareholder value through an updated capital management framework.”