Australia's Telstra has announced plans to invest as much as A$3 billion ($2.31 billion) over the next three years on the rollout of next-generation networks and the digital transformation of its business.
The operator plans to retire a number of legacy systems and take advantage of virtualization technologies to automate parts of its operations. Spending will also go towards preparations for 5G and on improving fixed network services, said the company in a statement.
The "digitization" component of the plan will see Telstra Corp. Ltd. (ASX: TLS; NZK: TLS) expand digital sales and service channels to improve the customer experience.
"There are a number of immediate actions that we believe will improve customer experiences," said Telstra CEO Andrew Penn in a statement. "We will simplify products and platforms -- we need to retire old technology and systems that slow down and complicate how customers are served."
The spending plans will mean that capital intensity -- or capex as a percentage of sales -- will rise to 18% in each of the next three financial years, from 15.6% in the 2016 financial year.
Telstra is one of several Tier 1 operators that have announced ambitious plans to "digitize" their operations as usage of data services grows.
The operator believes the $3 billion ($2.31 billion) investment will eventually lead to better capital efficiency, reduced operating costs and an increase in revenues.
Details of the investment program are to be "progressively" revealed over the next few years to ensure that Telstra does not lose any strategic advantage in the Australian market.
The announcement came as Telstra reported a 1.5% increase in revenues for the 2016 financial year, to A$25.9 billion ($20 billion).
Profits rose 36.6%, to A$5.8 billion ($4.5 billion), thanks largely to the $1.8 billion ($1.4 billion) sale of its stake in Chinese website Autohome in June.
— Iain Morris, , News Editor, Light Reading, Editor-in-Chief, Telco Transformation