In 1858 the first inter-colony telegraph links were built when Adelaide, Melbourne and Sydney were linked together with Brisbane being connected three years later. To emphasise the simplicity of the early networks, the Overland Telegraph Line was made from a single strand of iron wire. That is a far cry from a modern network that goes via a complicated array of wireless; wired and fibre transmissions and is automatically routed at a number of points via a variety of switches and routers.
Andy Penn, the Telstra CEO, was in Dubbo recently at a Dubbo Chamber of Commerce and Industry breakfast and, surprisingly enough, spoke about the world of communications.
When Penn talks, Australia stops and listens. When it comes to the world of technology in Australia, there are not many that could claim to be as important as the Telstra CEO. With a market capitalisation of $63 billion, it sits at number six on the ASX200 with no other technology companies even in the top fifty. There are more private shareholders in Telstra than any other company in Australia and it would be hard to envisage a day going by without every individual in Australia using some part of the Telstra network.
Andy presented some initial information to explain the complexity of the network we are dealing with. Most people don’t think too much about what happens on the other side of their telephone or computer. We simply pick up our phone and dial a number and expect to be speaking with someone a few seconds later. If it doesn’t connect or work instantly we say “damned [insert carrier name]” and try again. When you start to think about the complexity of what happens when we do make that call, maybe we should actually jump for joy each time a successful call is made rather than be annoyed when the occasional call is unsuccessful. That is not so much trying to defend any carrier but to try and think about what an incredibly complicated network we have.
One point that Andy did make was that Telstra received heavy criticism earlier in the year when a part of its mobile network stopped operating for a two-hour period (it happened twice). The customer expectation has now been set so high that every person expects to be connected at all times of the day and night and we are immediately aware if our phone is not connected. Ten years ago if the mobile network was down for half a day we may not have noticed but today the down time is measured in seconds.
After an overview of the actual network, Andy started to talk about broad business concepts. Although he was talking specifically about the Telstra business, the one thing that has been bleedingly obvious about the CEO Series is that business concepts are business concepts with just the number of zeroes being different. Andy spoke about investment in business infrastructure. He spoke of billions of dollars of investment – about seven billion per annum at the moment. Obviously businesses in Dubbo are unlikely to start to invest billions of dollars in infrastructure but the point was made that without ongoing investment, businesses are doomed. This investment was Telstra’s point of difference and there is no doubt that Telstra is regarded as having significantly better coverage than their competitors. For the business owners sitting in the room, the point made by Andy was that investment into your own business in infrastructure and in improving the customer experience will deliver long-term outcomes for the business.
The future of telecommunications, according to Andy, is in the increasing volume of data consumption; mobile usage and digitisation of businesses including the concept of digitalising the core of businesses to positively touch the lives of customers.
With a 40 per cent increase in data usage in Australia over the last year and more active mobile devices in Australia than people, I think his predictions will prove to be spot on.