Telstra targets scale in non-core segments

Telstra is looking to build scale in its non-core health and energy businesses, and also hopes to deliver profitable growth across its international network, as it looks to bolster its financial position.

The company has outlined the plans as part of its T25 growth strategy - first unveiled in September - that is designed to sharpen its competitive edge.

“For our new markets, our ambition is very simple. It is to grow our health and energy businesses profitably to scale,” chief executive Andy Penn said at the company’s investor day on Tuesday.

“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.”

Telstra has been building capability in digital health through recent acquisitions such as a majority stake in billing services firm PowerHealth and a $350 million purchase of medical software firm MedicalDirector.

It has also been moving to offer electricity and gas to residential customers across the east coast.

Mr Penn said Telstra aimed to deliver profitable growth and value by leveraging the growing strategic significance of its international network.

“There is no doubt with rapid digital adoption, the importance of our international assets has taken on a whole new complexion,” he said.

Australia’s biggest telecoms operator last month announced it was acquiring the Pacific operations of telecoms firm Digicel for $US1.85 billion ($A2.5 billion), of which the Australian government added $US1.33 billion.

Telstra expects the next level of mobile phone technology, 5G, to drive its earnings under its T25 plan, as it bets that customers will pay for higher data allowances to watch better-quality video and other benefits.

The telco aims to expand its 5G network coverage to 95 per cent of the Australian population, which includes boosting links for regional communities.