Telstra, the largest mobile operator in Australia with a 51 per cent market share, announced plans to cut back sharply on its network investments in fiscal 2020 and 2021, after boosting capex starting in mid-2016.
At the operator’s investor day conference, Telstra CFO Warwick Bray (pictured) said it aims to bring its long term capex to sales ratio down to 14 per cent in fiscal years 2020 and 2021 from an average expected level of 18 per cent in fiscal years 2017 to 2019. The ratio stood at 14 per cent to 15 per cent between fiscal 2013 and 2016.
Telstra’s fiscal years run 30 June.
The operator’s capex in fiscal 2017 rose 14 per cent year-on-year to AUD4.6 billion ($3.6 billion).
Bray said some of the reduction will come from productivity initiatives, noting it removed AUD244 million in overall costs in fiscal 2017. The moves include improved IT procurement, automation of repetitive tasks, faster call resolution at its call centres and more innovative small cell designs.
He reiterated its commitment to reduce core fixed cost by AUD1.5 billion by fiscal year 2022.
The company said its 4G network now reaches 99 per cent of the population, with the average speed twice as fast as its original 4G network for 70 per cent of the population. It uses more than 9,000 3G and 4G base stations, half of which it owns.
A new network build-out based on an SDN/NFV architecture is scheduled to be completed in fiscal 2020.