- Andy Penn confirms Telstra seeking to expand its “new markets” “profitably to scale.” The telco is looking into focusing on the businesses of energy and health.
- Telstra’s investor day was the company’s first opportunity to discuss in detail its energy ambitions. Telstra has been awarded licences to retail gas and electricity in Queensland, NSW, and South Australia.
- The telco giant has previously revealed its ultimate objective of being one of the top five energy retailers by FY25.
According to Telstra chief executive Andy Penn, the telco giant seeks to expand its “new markets” “profitably to scale.” The telco is looking into focusing on the businesses of energy and health.
“We’re very excited by the opportunities for these businesses and their strategic direction, but we also know we need to increase their economic significance to the value of Telstra,” Penn said.
Telstra’s investor day was the company’s first opportunity to discuss in detail its energy ambitions. Telstra has been awarded licences to retail gas and electricity in Queensland, NSW, and South Australia.
Ben Burge, Telstra’s Energy head, said that he expects early growth from the company’s endeavour in the energy sector to be “measured rather than explosive”.
Burge said: “We have to get the basics right for those in the market who are most at risk before we earn the right to scale up in a way that might reshape the way the markets work.”
The telco giant has previously revealed its ultimate objective of being one of the top five energy retailers by FY25. However, Burge knew that energy retailing was a “massive market” in which Telstra had zero market share. This is one of the reasons why the telco is planning a cautious approach. According to the Energy head, there was a “tremendous overlap” with Telstra’s existing consumer relationships.
“We also have the opportunity to take the technologies that we use to reduce our own power bills and make them freely available to Australian households so they can reduce their power bills,” he added.
The company is planning to initially sign up some of its employees as its first energy customers. In this way, they will “build, test and release progressive capabilities and capture feedback” before this is made available to their customers. Additionally, Telstra plans to hasten its marketing by offering a “simple, sustainable and integrated energy proposition” to further expand in the new markets.
“With a unique portfolio of physical assets and data, we look forward to harnessing flexibility to capture value for shareholders, reduce prices for customers, and improve climate outcomes,” Burge added.
Meanwhile, according to Telstra Health managing director Mary Foley, the business saw $500m+ in revenue in FY25. This is because the health arm of the company has achieved a 17% CAGR in revenue growth. This was over the past four years, of which more than 80% was recurring.
“There are significant segments of the market that are un- or under-digitised, and there is accelerated demand, especially following from COVID, for interoperable capability — in hospitals pharmacy, across general practice, in aged care and other sectors,” she said.