Telstra Is Spending $3 Billion More On Building Its 4G And 5G Networks

Image: Campbell Simpson

As part of "a strategic commitment to ensure continued technological leadership" announced in its annual financial results today, Telstra is devoting the most money since it built its NextG 3G network in 2008 to further develop 4G and ready itself for 5G. $3 billion over the next three years will go towards network building and digitising its customer-facing service and sales setups.

While the exact details are vague — the precise expenditure will be "progressively confirmed" throughout the next three financial years — the $3 billion expenditure will represent the largest ratio of capital expenditure to sales revenue since the 2008-09 investment in building the telco's nationwide 3G network, then called NextG.

Both 4G and 5G were name-checked in Telstra's announcement to the ASX; the company is an integral part of the international 5G working group, and beyond running 4G network trials at the 2018 Commonwealth Games on Queensland's Gold Coast, the technology will likely become available around 2020. Telstra continues to invest in improving the speed and capacity of 4G LTE networks, too — it will have devices capable of 1000Mbps download speeds later this year.

Within a year, Telstra expects to achieve 99 per cent population coverage with its 4G and 4GX networks, spurred on by continuous upgrades of its mobile towers including 2375 network sites during the 2016 financial year — it currently covers 98 per cent of Australia's population. Beyond the mobile side of its business, Telstra also clocked 500,000 customers connected to the NBN, and the company now has 17.2 million mobile customers nationwide.

Importantly, some of the $3 billion will go to retiring the company's extensive legacy systems, largely thought to be partially responsible for a series of high-profile mobile and fixed network outages — the company calls them "network disruptions" — during the last six months. As the former national carrier and Australia's oldest telco, Telstra has many older platforms working with progressively newer ones, but this expenditure aims to create a unified platform for current and future products to be sold and serviced from.

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