Thursday, 12 November 2020 19:33

Telstra announces it will split into three separate entities Featured

Andrew Penn: "Any restructure is a complex process and this is undoubtedly our biggest and most complex since privatisation." Andrew Penn: "Any restructure is a complex process and this is undoubtedly our biggest and most complex since privatisation." Courtesy YouTube

Telstra has announced that it will be splitting up into three entities under a parent company to be known as Telstra Group, with the three being InfraCo Fixed, InfraCo Towers and ServeCo.

Chief executive Andrew Penn said in a statement on Thursday that ServeCo was not a new brand name but was being used to differentiate it from the infrastructure businesses.

"InfraCo Fixed will own and operate our passive physical infrastructure assets: the ducts, fibre, data centres, subsea cables and exchanges that underpin our fixed telecommunications network," Penn said.

"InfraCo Towers will own and operate our passive physical mobile tower assets, which we will look to monetise over time given the strong demand and compelling valuations for this type of high-quality infrastructure.

"Finally, ServeCo will focus on how we create and innovate products and services for our customers and deliver the best possible customer experience, including maintaining our significant network leadership. ServeCo will also own the active parts of our network – things like software defined networking that allows us to operate in a dynamic way."

In 2018, Penn announced a net reduction of 8000 employees and contractors by 2022, leading to the reduction of one in four executive and middle management roles.

At that time, the company said it would create a new infrastructure business unit, InfraCo, "to drive performance and provide future options for a demerger or the entry of a strategic investor in a post-NBN rollout world". The new strategy has been given the moniker Telstra2022.

Telstra's earnings have been severely dented by the NBN Co and the company has complained on numerous occasions of the inability to make any meaningful profit from reselling NBN connections.

In Thursday's announcement, Penn said InfraCo was now a fully operational stand-alone business with its own leadership team and operations.

He said the announcement was the next step, not just in the establishment of Telstra InfraCo, but in the future operations of Telstra overall.

"Any restructure is a complex process and this is undoubtedly our biggest and most complex since privatisation," Penn said. "It will take time to work our way through the commercial, regulatory and operational issues and there are many stakeholders to consider.

"That’s why we have announced our intentions today. We wanted to do so ahead of implementation so we can undertake a comprehensive consultation program to detail the many benefits this structure delivers."

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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