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- Telstra (TLS) invests in two major telecommunications infrastructure projects to support the nation’s digital economy and increase levels of connectivity across Australia
- The first project consists of the company building and managing the ground infrastructure and fibre network in Australia for global communications company, Viasat
- Secondly, the company will be apart of a major new fibre project to build state-of-the art inter-city dual fibre paths
- To deliver the projects, the company expects to invest between $1.4 billion and $1.6 billion outside of its usual business activities expenditure over the next five years
- Shares are trading 1.4 per cent higher today at $4 each
Telstra (TLS) will invest in two major telecommunications infrastructure projects to support the nation’s digital economy and increase levels of connectivity across Australia.
To deliver the projects, the company expects to invest between $1.4 billion and $1.6 billion outside of its usual business activities expenditure over the next five years.
It expects an additional $350 million of capital expenditure per year between FY23 and FY25.
The first project consists of the company building and managing the ground infrastructure and fibre network in Australia for global communications company, Viasat.
This program will support the new ViaSat-3 terabit-class global satellite system as part of the 16.5-year contract.
Each of the three satellites is designed to offer over one Terabytes per second of total network capacity to deliver data and video streaming speeds of more than 150 megabits per second.
The company said this will be the largest-scale satellite solution deployment in the nation’s history.
Secondly, the company will be a part of a major new fibre project to build state-of-the-art inter-city dual fibre paths.
This investment will add 20,000 new route kilometres to increase the capacity of Telstra’s optical fibre network.
The new fibre project will reportedly accelerate the company’s investment in the growth of InfraCo, while enabling ultrafast connectivity between capital cities and improved regional connectivity.
It will be a multi-year build, which is expected to start late in this financial year. Early trial and test deployments are already underway.
Both projects meet the company’s organic investment criteria and are consistent with its capital management framework.
Telstra expects the investments combined will deliver an internal rate of return in the mid-teens, to reach a per annum EBITDA contribution of $200 million by FY26.
It expects a payback period of about nine years.
There is no change to the company’s FY22 guidance and it said it remains committed to deliver all of its T25 financial ambitions.
Telstra CEO Andrew Penn stated that the two projects acknowledged Telstra’s network assets and were part of Telstra’s T25 InfraCo mission to create profitable growth and value by boosting access, utilisation, and scalability of its infrastructure.
“Investing in these two truly significant nation-building projects will see us continue to have the largest intercity fibre network in the country, helping to future proof Australia’s digital economy and further improving connectivity in regional Australia,” said Mr Penn.
Shares were trading 1.4 per cent higher today at $4 each at 1.50 pm AEDT.
