Telstra to Split into Three Entities

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Telstra, Australia’s leading telecom provider has revealed its plans to split into 3 different units which would operate under the umbrella of the Telstra Group. The restructuring – scheduled to be completed by 2021 – is said to be the telecom giant’s biggest restructuring since 1997. The primary reason behind the move appears to be to spin off its infrastructure assets to realise their full value as competition intensifies.

In 2018, the Telstra2022 plan defined a four-pillar strategy to improve business, network superiority, cost improvements and respond to market dynamics for the next three years including the establishment of InfraCo and Global Business Services. Telstra established its standalone infrastructure unit, Telstra InfraCo to hold its fixed network assets. As a part of its recent announcement, Telstra’s infrastructure business InfraCo will split into two units – InfraCo Fixed which will run and manage Telstra’s physical infrastructure assets including data centres, ducts, fibres, undersea cables, and exchanges; and InfraCo Towers which will own and operate Telstra’s mobile towers and infrastructure. Meanwhile, the third unit ServeCo will focus on products and services for the consumer and retail businesses. The company is also investigating ways to push into renewable energy, with plans to exploit its renewable energy investments to re-sell cheaper energy to its customers.

This restructure, should it go ahead as described, is likely to be the biggest legacy that the current CEO, Andy Penn, leaves on the business. Recent CEOs have left a significant legacy on Telstra. Sol Trujillo – who admittedly had a rocky relationship with the Australian Government, which culminated in the conception of the National Broadband  Network (NBN) – drove significant changes in Telstra; rationalising mobile and fixed network investments, driving focus back into the business and building an economically rational business. David Thodey was the great peacemaker, driving pride back into the Telstra staff and customers; he turned Telstra into one of the most customer-centric businesses in Australia in his time, laying the foundation for its ongoing success. Andy Penn has made some significant changes to Telstra, further reducing the cost base to turn it into a more competitive business – but until now, he has not significantly transformed the core business.

This changes now. Telstra ServeCo will build on the customer-obsessed culture of the Telstra sales and service business – one that consistently scores above market average for NPS in both the business/enterprise and the consumer markets. One can even envision a day in the future where ServeCo will be in a position to sell the best network solutions and services in Australia – some of which might not even be owned or controlled by InfraCo. It already does that with the NBN – this may extend to reselling other telecom services too.

InfraCo Fixed will build on the strong engineering legacy that Telstra still has – and will give it the chance to flourish – and not be dictated by customer buying cycles. Ideally investment cycles can be separated from direct customer revenue, and the company can rebuild the network lead that it has traditionally experienced, but which has been eroded over the past 3-4 years (in mobile by Optus and in fixed telecoms by NBN).

InfraCo Towers should be well-positioned to become the core tower provider in Australia. This business makes the most sense to spin off in the medium term. The buildout of multiple – nearly identical – tower networks by the three major 4/5G providers is wasteful and inefficient. 5G in particular, requires a very different tower footprint than 3G or 4G – so having a single provider of shared tower infrastructure will reduce costs for all telecom providers while creating a healthy business for shareholders. As an independent provider of towers, InfraCo Towers should always be the most affordable option – Optus, Telstra and Vodafone would be foolish to attempt to replicate and manage their own similar tower infrastructure.

The NBN-Telstra Dynamics

While Telstra dominates the Australian telecommunications market, their business is also under pressure due to the state-owned NBN. In 2019, Communications Minister Paul Fletcher ruled out selling the NBN to Telstra. However, the new structure has likely been designed with this in mind – with perhaps the option to spin off the InfraCo Fixed unit and merge this with a privatised NBN or perhaps to even the separation of the business units enough to satisfy a future government of the merits of selling NBN to Telstra and merging it with the InfraCo Fixed unit. The question surely needs to be asked what the difference is between a private business with a monopoly on home broadband access and Telstra having that monopoly?

This restructure will help Telstra build a telco for the next ten years. One where agility will be core to its success. The challenge – like with any big transformation – will be to take the employees and the customers on that journey. Employees need to believe that this structure is the right one and that their skills are required and relevant. Customers need to see benefits from this restructure too – ideally, they will see that the service promise of Telstra is delivered in the network and capabilities. Hopefully, they will see a stronger Telstra that can continue to drive the levels of innovation and investment that digitally savvy customers demand.

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Telstra and Microsoft Partner to Enhance and Enable the Built Environment

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Telstra and Microsoft have extended their partnership to jointly build solutions harnessing the capabilities of AI, IoT, and Digital Twin technologies in Australia. The partnership will also enable both companies to work on sustainability, emission reduction, and digital transformation initiatives.

The adoption of cloud and 5G technology is already on the rise and creating opportunities across the globe. The Microsoft-Telstra partnership is set to bring together the capabilities of both providers for businesses in Australia and globally. Their focus on AI, IoT, cloud and 5G will enable Australia’s developers and independent software vendors (ISVs) to leverage AI with low latency 5G access to drive efficiency, and enhance decision making. This will also see practical applications and new solutions in areas like asset tracking, supply chain management, and smart spaces to enhance customer experience.

Technology Enhancing the Built Environment

Microsoft Azure and Telstra’s 5G capabilities will come together to develop new industry solutions – the combination of cloud computing power and telecom infrastructure will enable businesses and industries to leverage a unified IoT platform where they can get information through sensors, and perform real-time compute and data operations. Telstra and Microsoft will also build digital twins for Telstra’s customers and Telstra’s own commercial buildings which will be initially deployed at five buildings. Upon completion, the digital twin will enable Telstra to form a digital nerve centre and map physical environments in a virtual space based on real-world models and plot what-if scenarios.

Telstra CEO, Andy Penn says, “If you think about the physical world – manufacturing, cities, buildings, mining, logistics – the physical world hasn’t really been digitised yet. So, how do you digitise the physical world? Well, what you do is put sensors into physical assets. Those sensors can draw information around that physical asset, which you can then capture and then understand.”

Ecosystm Principal Advisor, Mike Zamora finds the comment interesting and says, “It isn’t so much that the physical world is digitized – it is more about how digital tools enhance and enable the physical world to be more effective to help the occupier of the space. This has been the history of the physical space.  There have been many ‘tools’ over time to help the physical world – the elevator in the late 1880s enabled office buildings to be taller; the use of steel improved structural support, allowing structural walls to be thinner and buildings taller. These two ‘tools’ enabled the modern skyscraper to be born.  The HVAC system developed in the early 1900s, enabled occupants to be more comfortable inside a building year-round in any climate.” 

“Digital tools (sensors, etc) are just the latest to be used to enhance the physical space for the occupant. Digital twins enable an idea to be replicated in 3D – prior to having to spend millions of dollars and hundreds of man hours to see if a new idea is viable. Its advent and use enable more experimentation at a lower cost and faster set up. This equates into a lower risk. It is a welcomed tool which will propel the experimentation in the physical world.” 

Talking about emerging technologies, Zamora says, “Digital twins along with other digital tools, such as 3D printing, AI, drones with 4K cameras and others will enable the built environment to develop at a very quick pace. It is the pace that will be welcomed, as the built environment is typically a slow-moving asset (pardon the pun).”

“Expect the Built Environment developers, designers, investors, and occupiers to welcome the concept. It will allow them to dream of the possible.”

Telstra and Microsoft – Joint Goals

Telstra and Microsoft have partnered over the years over multiple projects. Last year, the companies partnered to bring Telstra’s eSIM functionality to Windows devices for data and wireless connectivity; they have also worked on Telstra Data Hub for secured data sharing between data producers, businesses and government agencies; and most recently collaborated on Telstra’s exclusive access to Xbox All Access subscription service to Australian gamers with the announcement of Microsoft’s Xbox Series X and Xbox Series S gaming consoles expected to release in November.

This announcement also sees them work jointly towards their sustainability goals. Both companies are committed to sustainability and addressing climate change. Earlier this year, Microsoft announced its plans to be carbon negative by 2030, while Telstra has also set a target to generate 100% renewable energy by 2025 and reducing its absolute carbon emissions by 50% by the same time. To enable sustainability, Telstra and Microsoft are exploring technology to reduce carbon emissions. This includes further adoption of cloud for operations and services, remote working, and piloting on real-time data reporting solutions.

Telstra also aims to leverage Microsoft technology for its ongoing internal digital transformation, adopting Microsoft Azure as its cloud platform to streamline operations, and infrastructure modernisation, including transition from legacy and on-premise infrastructure to cloud based applications.


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Ecosystm VendorSphere: AWS Partner Ecosystem Matures as Hybrid Cloud and Edge Computing Meet

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AWS has been busy this year moving beyond its stronghold of public cloud to bring infrastructure closer to the enterprise and ultimately to where the end user needs computing most. The global availability of AWS Outposts, essentially AWS on prem, the launch of AWS Wavelength, edge computing embedded in 5G networks, and the extension of the AWS Snow Family of edge devices, have all combined to create a compelling hybrid cloud story. This evolution in AWS’ strategy has required a maturing of its partner ecosystem, building alliances with telcos, co-location providers, and integrators that are all still trying to cement their roles in the hybrid cloud space.

Outposts: The AWS Vision of Hybrid Could

Outposts launched late last year with availability extended to many mature countries in January 2020, in addition to India, Malaysia, New Zealand, Taiwan, Thailand, Israel, Brazil, and Mexico in June. The plug and play system delivers AWS compute and storage from the organisation’s own data centre with a rack that requires only power and network access. The system is managed with the same tools and APIs used in public AWS regions, providing a single hybrid cloud management console. Outposts is targeted primarily at the enterprise space, with the cheapest development and testing units coming in at $7-8k monthly or around $250-280k upfront, depending on the country. Other higher-end configurations include general purpose, compute optimised, graphics optimised, memory optimised, and storage optimised. Monthly installments attract a 10-15% premium over upfront payments.

The launch of hybrid cloud solutions by the major cloud providers and containerised services that allow workloads to be deployed in public and private environments will ensure enterprises are willing to continue their cloud journeys. Security concerns and data residency regulations have prevented many organisations from shifting sensitive workloads to the cloud. Moreover, as industries launch new customer-facing digital services or transform their manufacturing systems, latency will become a concern for some workloads. Hybrid cloud addresses each of these issues by employing either public or private resources depending on the data, location, or capacity needs.

AWS Outposts has two variants, namely Native AWS and VMware Cloud on AWS. Organisations already heavily invested in the AWS ecosystem will likely choose Native AWS and use Outposts as a means of migrating further workloads that require an on-prem environment over to a hybrid cloud environment. More traditional organisations, such as banks, may select the VMware Cloud on AWS variant as a means of retaining the same operational experience that they are accustomed to in their existing VMware environments today.

AWS will rely heavily on its network of enterprise partners for sales, management, and maintenance services for Outposts. AWS partners like Accenture, HCL, TCS, Deloitte, DXC, NTT Data, and Rackspace have all shifted in recent years to deliver the full stack from infrastructure to application services and now have a ready-made hybrid cloud platform to migrate on to. AWS is also in the process of recruiting co-location partners to serve Outposts from third-party data centres, providing another option that enterprises are familiar with. This will likely come as welcomed news for co-location providers that have been fighting uphill against AWS.

Wavelength: Embedding Cloud in 5G Networks

Another major announcement in AWS’s drive towards hybrid cloud and edge computing was the general availability of Wavelength in August. This service embeds AWS into the data centres of 5G network operators to reduce latency and bandwidth transmission. Data for applications residing in Wavelength Zones is not required to leave the 5G network. AWS is looking to attract mobile operators, who previously might have viewed it as a competitor while the public cloud space was more fragmented and open to telcos. These partnerships are another example of AWS expanding its ecosystem. Current Wavelength partners are Verizon, Vodafone Business, KDDI, and SK Telecom. With their own take on edge services, Microsoft has signed up the likes of Telstra and NTT Communications, while Google has enlisted AT&T and Telefónica. Edge computing in 5G networks will be the next battleground for cloud supremacy.

On a smaller scale, AWS has released new additions to its Snow Family of edge computing devices. AWS Snowcone is a compact, rugged computing device designed to process data on the network edge where cloud services may be insufficient. The processed data can then be uploaded to the cloud either through a network connection or by physically shipping the device to AWS. The convergence of IT and OT will drive the need for these edge devices in remote locations, such as mines and farms and in mobile environments for the healthcare and transportation industries.

Competitive Strategies

Openness will become a critical difference between how cloud platform providers approach hybrid cloud and edge computing. While AWS is certainly extending its ecosystem to include partners that it previously would have viewed as rivals, as the dominant player, it will be less compelled to open up to its largest competitors. If it can control the full system from ultraportable device, to $1M server rack, to cloud management console, it can potentially deliver a better experience for clients. Conversely, the likes of Microsoft, Google, and IBM, all need to be willing to provide whichever service the client desires, whether that is an end-to-end solution, management of a competitor’s cloud service, or an OEM’s hardware.


This report aims to give you an overview of the cloud landscape in Asia Pacific
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Ecosystm Snapshot: CBA, Telstra, Ericsson to trial 5G for banking sector

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4.5/5 (2) Commonwealth Bank of Australia (CBA) has entered into a partnership kicking off trials of 5G and edge computing with telecommunication majors Telstra and Ericsson to explore the benefits of 5G in the banking sector.

The partnership agreement was signed at the annual Mobile World Congress (MWC) 2019, in Barcelona. The trials are projected to showcase what banking in the future might look like, and how 5G technology and edge computing can help to lower the requirements of the infrastructure presently required for banking operations.

Speaking on the subject, Ecosystm’s, Principal Advisor, Tim Sheedy, thinks that “this trial will help all parties better understand where the opportunities are for users of the mobile networks, and for the telco and equipment providers too. They will understand the potential demand for specific network slices and capabilities and get a better idea of what they need to deliver and whether or not there may be demand for these services”.

5G edge computing is still in nascent stages and there’s not much present in the market. Whether it minimises infrastructure or distributes it differently is yet to be seen. “The trials will likely determine what the shape of the new distributed architecture looks like (how close to the “edge” do the data centres need to be?)” says Tim, “There are unknowns of 5G at the moment – so the trials are invaluable to all parties to help them know where and what they need to invest in to make 5G services commercially viable.”

For a layman, 5G edge computing is all about delivering the reliability, speed, and latency that they need – or more likely – a sensor needs in order to get its job done. Once the technology becomes mainstream the end-users/banking customers will reap benefits from it. “5G is not just about delivering faster speed but it is about delivering them intelligently”, says Tim, “5G will help Telco’s to prioritise traffic AND network services – meaning that the end user can achieve their goals.”

While it’s too early to tell at this stage how will 5G benefit the banking sector, it should help banks offer their customers more reliable and relevant services – but what services need to be distributed at what times, and what can remain at the core are not yet understood.

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