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Forget V or W, Telstra boss Andy Penn has a D-shaped recovery in mind

The pandemic, he says, has brought some salient truths to the fore.

“We are on the cusp of potentially the next industrial revolution, supported by the digital economy, and there is now an opportunity to accelerate the role [digital services and infrastructure] can play in helping businesses recover from COVID-19,” Penn explains.

Long touted as the catalyst for Australia’s economy to wean itself off its reliance on the resources boom, our road to the digital economy has been far from smooth. From the fractious gestation of the National Broadband Network and the lack of a comprehensive policy on cybersecurity to botched policies like robo-debt, policy makers and digital technology haven’t had the most comfortable of relationships.

This is the time to be bold, we need to do more than just bounce back. This is an opportunity to set the trajectory for the future.

Telstra CEO Andy Penn

With good intentions hobbled by poor policy and complacency, Penn says the pandemic offers an opportunity for policymakers to throw caution to the wind, especially when it comes to regulation.

“This is where micro-reform can make a big difference…if we can systematically look through any legislation that hinders the move to a paperless, a cashless and a virtual economy and remove those little hurdles, then that speeds things up.”

It may sound overly optimistic, but Penn’s call about COVID-19 being a catalyst for change does hold some truth. The nature of the pandemic has shown why the adoption of digital solutions in Australia has less to do with the available technology and everything to do with stubborn policy parameters.

“If you look at something like telehealth, our ability to deliver those services has been held back by the simple fact that [prior to COVID-19] if you visited a GP in person you got a Medicare rebate, but you couldn’t do that if it was a video consultation,” Penn says.

“We have been advocating for a change to the policy for the last five years without luck, but it was changed in heartbeat in the middle of the COVID crisis and we have seen telemedicine appointments skyrocket.”

“That shows to me there is an opportunity here for us to have some ambition, some room for creative thinking and the question is how can we use this to not fall back into doing things the way they used to be,” he says.

Telstra CEO Andy Penn has previously said he wants to be involved in NBN privatisation discussions.

Telstra CEO Andy Penn has previously said he wants to be involved in NBN privatisation discussions.Credit:Eddie Jim

Telehealth is one thing, but Penn would have an eye on whether the federal government will show similar alacrity on the NBN, a project that has not only upended Telstra’s business model but also underpins the infrastructure critical for the digital economy.

With the network’s rollout almost complete, the next chapter of the NBN saga promises to be just as controversial as its inception and construction. With some parties calling for an immediate upgrade of the network, there’s been no new directives handed down by the federal government to NBN’s management team. Meanwhile, Telstra is getting its house in order to play a meaningful role in whatever happens next.

According to Penn, who remains a strident critic of the NBN’s business model, the next steps need to be devoid of the rigid politics that has plagued the project from the start.

“If there was ever a moment in time to set a vision for the next decade of telecommunications in Australia, especially from a technology and operator-agnostic lens, now would be the time to do it without being constrained by the political shackles of the past.”

“The rollout is nearing its conclusion and the question in my mind is what’s the technology upgrade from here? What’s the future policy settings?”, he said.

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“The economics of the NBN makes it hard for telcos to make a return on their invested capital, so if we need to encourage investment in the sector we have to step things up.”

Building and running networks, mobile or otherwise, is expensive business and clarity around the future of the NBN will benefit not only Telstra but also its peers on how they spend their dollars.

It will also go a long way in maximising the potential of the NBN, which has held up well during the pandemic, but still doesn’t provide the reliability one would expect from a $51 billion network. Telstra is the biggest reseller of NBN services in the market but it’s no longer offering speeds of above 50 megabits per second (Mbps) to homes that are connected to the NBN through fibre to the node (FTTN) and fibre to the curb (FTTC) access technologies.

Penn says there’s no point offering those speeds to homes that can’t receive them and while Telstra’s position hasn’t necessarily left consumers in the lurch during the pandemic, it won’t cut it as we migrate more functions – from work meetings to ordering groceries – to the internet.

Having had some success in ‘flattening the curve’ of coronavirus infections, plotting a path back to an economic recovery could prove to be a harder nut to crack for the Morrison government – unless, as Penn suggests, it can muster up the courage to seriously commit to fostering the digital economy.

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