Establishing a standalone infrastructure business
As part of our new strategy we will be establishing Telstra InfraCo, a new standalone business unit within Telstra.
Telstra InfraCo will be responsible for key fixed network assets and for managing our relationships with our more than 200 wholesale customers and our long-term strategic relationship with nbn co.
It will be accountable for our copper and HFC networks; all our fibre network that is not dedicated to supporting mobiles; all ducts, pits and pipes; property including exchange buildings and data centres; and international and domestic subsea cables. These assets will be combined with Telstra Wholesale and the teams in Telstra Operations that provide services to nbn co.
At establishment on 1 July, this new Business Unit will control assets with a book value of approximately $11 billion and have annual revenues of more than $5 billion from internal and external sources.
Connectivity has never been more in demand and as such our infrastructure has never been more important to our customers.
Telstra InfraCo’s mission is to be the most efficient fixed telco infrastructure provider in the market. It will serve three customer segments: Wholesale in Australia; nbn co; and the broader Telstra covering Consumer and Small Business and Enterprise. It will offer the full range of wholesale products that Telstra offers today, while also focusing on improving infrastructure service delivery to benefit all our customers across nbn co, wholesale and the rest of Telstra.
By putting our fixed assets together in a single BU we are establishing the right structure to give greater focus on this part of Telstra’s business. It will also provide greater visibility to the market of the value of this business and create more optionality for the period after the nbn rollout is complete.
Separate to Telstra InfraCo, Telstra will continue to operate an integrated mobile business, with key assets including spectrum and towers, and our Network Applications and Services business.
Responsibility for key operational activities, like actively managing the traffic on our fibre networks, will continue to be with Telstra’s Operations group, which manages it today. Indeed, while InfraCo will share responsibility for the equipment used to power services carried over the infrastructure it controls – including copper, HFC and fibre networks – all network management functions will continue to be undertaken by Telstra Operations, so that we continue to run one integrated network from a traffic and managed services perspective.
While Telstra InfraCo will be focused on maximising the value of our fixed assets, having our mobile network, software, applications and 4G/5G and IoT capabilities all aligned together will result in innovative new products being developed and deployed more quickly for our customers. Maintaining an integrated mobiles business is particularly important as we execute on our strategy to roll out 5G in 2019.
This change clearly delineates our integrated mobiles business and Network Applications and Services business from our nbn related and core carriage infrastructure business and will help ensure our customers enjoy the benefits of Telstra being the most efficient infrastructure provider in the market. Additionally, the structure we are using in setting up InfraCo will mean we will have flexibility as the industry continues to evolve in the future and the nbn™ network rollout is completed.
Telstra InfraCo will commence on 1 July 2018 and Telstra will publish pro forma FY18 segment reports for InfraCo at our results in August and then formal segment reporting will be provided at our first-half FY19 results in February 2019.