Today, Telstra announced their big plan to restructure the company in preparation for the future. The telco space is rapidly changing beast and if you don’t change to accommodate changing technology and the requirements of users, you’ll quickly find yourself out in the cold.
Gone are the days where SMS and MMS were big cash-cows for Telstra, with the revenue so insignificant that these services are thrown in, unlimited for most plans. Then came the cash cow of mobile data, where we’d pay exorbitant amounts for exceeding data caps, of which were seriously insufficient for growing user demands as smartphones exploded. Now data caps have increased, the price of data has come down with competition.
Telstra already offers one plan that features unlimited data (speed capped after 40GB), but Telstra says this unlimited freedom is the way of the future. Telstra’s infrastructure also used to provide significant revenue to the business, but through a long-term agreement is now being used for an ultra competitive NBN. The revenue paid to Telstra by the NBN should assist the company to transition to more modern offerings.
Telstra desperately wants to ‘lead and win’ with the transition to 5G. Telstra are planning on 5G commercial launch in FY 2020, which offers incredible speeds and low latency, combine that with virtually unlimited data and it will transform the space. It’s then the applications and services built on top, that become the offering that’ll drive future revenue for Telstra.
As a consequence of restructuring the business, 8,000 employees will loose their job, with about 25% of executive and middle management roles to go. This will flatten the structure and while sad for the individuals, is exactly the right place to reduce a billion dollars of wages from. These middle tiers in organisations often aren’t the employees responsible for making the big decisions, or implementing them and are essentially an information conduit between the two ends of the organisation chart. What hasn’t been widely reported today is that the new plan also involves around 1,500 new positions in new areas that need to expand and support future plans of the company.
Along with the employee changes, there’s a range of business approaches that are set to change as well. There’ll be:
- Radically simplify our product offerings (1,800 down to 20), eliminate customer pain points and create all digital
- Establish a standalone infrastructure business to drive performance and set up optionality post
the nbn rollout
- Greatly simplify our structure and ways of working to empower our people and serve our
- Industry leading cost reduction programme and portfolio management
Practically the company is refining itself, after doing what many large companies fail to do, to look hard at where they are, where they want to be and making the hard decision to apply bold sweeping changes to their organisation to achieve those outcomes. Its hard, but its smart and needs to be done. Like that of Qantas, the short-term pain is worth it to achieve long-term gains and you’ll continue to see Telstra make moves to lead in network infrastructure like 5G, enabling them to deliver new digital platforms as well as strong business play like enterprise IoT like smart metering, Unified Comms, Cloud, Security, Software defined networks and enterprise mobility.
From the detail provided to the ASX today, we also learnt that Telstra has a roadmap to transform the customer experience over the next 12 months. ‘All the data without the need to worry’ is the start, read more unlimited plans and that’s coming July 2018. Between October and January, they’re planning on offering entry level companion plans for mobiles and tablets, expect this to mean secondary SIMs are basically free or getting a new plan for your kids devices will be much cheaper.
By the time March 2019 rolls around you’ll be able to ‘express checkout’ with easy purchases of incremental services. Finally by this time next year, Telstra will re-launch their 24×7 app with ‘effortless digital interactions’. Expect almost all your Telstra services to be operable through the app. Right now the app has a mega 4 million active users, with 1.5 unique visitors each week. By FY2021, Telstra expects these numbers to grow to by 7,5 Million users of the 24×7 app, a significant portion of their customers. Forget phone support, expect most of the common interactions you have with Telstra to be done through the app in the future.
More information at Telstra.