Telstra and Microsoft expanded a strategic partnership, with the operator naming Azure as a preferred cloud partner and setting the goal to become the US-based company’s largest supplier of fibre capacity in Australia.

In a statement, Telstra explained the five-year deal will drive an aim to run up to 90 per cent of services on public cloud infrastructure by 2025 as part of a multi-cloud approach. Microsoft will become an anchor tenant on a new intercity fibre network.

Telstra stated the deal was “one of the largest partnerships” Microsoft had forged with a telecoms provider globally.

Andrew Penn, Telstra CEO (pictured), said the deal fits with its T25 growth strategy.

“As the go-to partner for Microsoft in Australia, this expanded agreement will turbocharge how we deliver compelling, all-digital experiences,”

Microsoft chairman and CEO Satya Nadella noted the partnership combines “Telstra’s leadership in network connectivity with the breadth and depth” of the US company’s cloud set-up “to address key challenges, including hybrid work and sustainability”.

Telstra will also establish a dedicated Microsoft practice to combine the vendor’s “cloud, edge and modern work solutions” with its network technology experts.

Microsoft will also look to increase its capacity on Telstra’s Asia-Pacific subsea cable network.