Telstra strategy already paying off: report

Peter Dinham
Tuesday, 29 November 2011 14:47

IT Industry - Strategy

A leading analyst firm has given the tick of approval to Telstra's strategy and goal of becoming a network-centric applications and service provider, and says that in the post National Broadband Network (NBN) era the company will no longer be able to differentiate on the basis of its access network assets.

In a report released after the Telstra Industry Analyst Summit 2011, Ovum says that Telstra continues towards its goal of becoming a network-centric applications and services provider, leveraging its share in the traditional carriage business to offer an increasing number of network integrated applications and services relying on the intelligence it is building into its network.

According to Ovum senior analyst, Claudio Castelli while there are many challenges ahead of Telstra, especially in building and managing the ecosystem of partners required to succeed, 'the strategy appears to have already started pay off, with significant revenue growth coming from network application and services.'

Citing recent figures which suggest that Telstra is on the right track and the strategy is starting to pay off, Castelli says that revenues from network applications and services (NAS) grew 11 percent in FY2011 to AUD$1.1 billion, while the traditional carriage business grew only one per cent.

However, Castelli says it is cloud services where expectations are greatest. 'With the recently announced $800 million investment and an increasing number of customers across business and enterprise Telstra seems to be on track to achieve its expected 20 per cent CAGR by 2014.'

On the post-NBN era, Ovum suggests that the way for Telstra to maintain a competitive advantage is by transforming its network into an intelligent and secure platform for delivering applications and services.

According to Castelli, Telstra's plan is to provide a layered approach that separates the services and application layer from the transport layer for better flexibility, allowing services to be device- and access-agnostic. Castelli says this will give Telstra the flexibility required to build its services proposition independently of the access network, and allow it to use either its own access assets (fixed or mobile) or from the NBN Co.

'To deliver on this strategy Telstra has been investing in its IP network core based on IMS, and developing a series of solutions that form a unique proposition of end-to-end managed services. This includes a range of security products, and forms the basis for its cloud services portfolio,' Castelli says.

Ovum, says that the recently announced Application Assured Networking solution will allow enterprises to predefine performance metrics for selected applications and allocate bandwidth dynamically on-demand.

'This online policy control feature, which will be available mid-2012, is a growing customer requirement,' Castelli says, and points to Ovum's recent end-user survey showing that 76 per cent of large enterprises in Australia are interested or very interested in the ability to prioritise the performance of individual business applications and 74 per cent in the ability to instantly change the bandwidth of a connection from a portal.