Andy Penn (Telstra)
Telstra is investing $1.6 billion to lay the ground infrastructure for the "largest-scale" satellite deployment in Australia for communications company Viasat, and building the "largest inter-city fibre network" in the country.
To deliver both projects, Telstra will invest between $1.4 - $1.6 billion outside of its business-as-usual capital expenditure over the next five years, with up to 70 per cent of its total commitment spread across its T25 planning period.
Telstra CEO Andy Penn, said the two projects recognised the strength of Telstra’s network assets and were part of its T25 InfraCo ambition to deliver profitable growth and value by improving access, utilisation and scale of its infrastructure.
“Investing in these two truly nation-building projects will see us continue to have the largest inter-city fibre network in the country, helping to future proof Australia’s digital economy and further improving connectivity in regional Australia,” Penn said.
The Viasat program will see three ViaSat-3 terabit-class satellites deployed as part of a 16-year contract. Each satellite provides more than 1TB of network capacity to deliver data and video streaming speeds of more than 150Mbps.
Telstra will co-locate Viasat’s satellite access node (SAN) equipment at hundreds of sites across Australia and will build and manage high-speed fibre links to each site.
The network will connect the SAN sites to multiple redundant data centres that will house the core networking equipment to manage increased data traffic.
Penn said the Viasat build would be the largest-scale satellite deployment in Australian history.
“It’s a clear demonstration of the potential opportunities we have when we combine Telstra’s Enterprise customer management and service capabilities with InfraCo’s existing infrastructure assets and new build capabilities,” he said.
Viasat president of space and commercial networks Dave Ryan added that leveraging Telstra’s existing infrastructure for its ground network means it can cost-effectively optimise its satellite assets and significantly lower its risk of deployment and operations for the ViaSat-3 terabit-class satellite system.
The new major inter-city fibre project will deliver up to 20,000kms of ultra-high capacity, low-latency fibre, enabling transmission rates of up to 650Gbps. Building will start in late FY22 over multiple years. Early trial and test deployments are already underway.
Telstra said discussions with key anchor customers for the national fibre network are progressing including global hyperscalers, local telco providers and construction partners.
The project will enable express connectivity between capital cities of up 55Tbps per fibre pair capacity on routes such as Sydney-to-Melbourne; Sydney-to-Brisbane and Perth-to-Sydney.
Penn said it would create value and accelerate its investment in the growth of InfraCo, while enabling ultrafast connectivity between capital cities and improved regional connectivity, including opportunities for high capacity mobile backhaul.
“Our strong cash flows and T25 growth ambitions provide us the flexibility to make these strategic infrastructure investments while maintaining flexibility to return excess cash to shareholders. Together these investments are expected to deliver incremental long-term accretive growth,” he said.
Telstra said it expects these investments will continue to deliver mid-teen return on investment, to reach per annum EBITDA contribution of about $200 million by FY26 and to have a payback period of about nine years.
