Good morning, and welcome to Telstra's Investor Day to announce our strategy for the future, T25. My name is Nathan Burley, Head of Investor Relations. I'm joining you today from Naarm, also known as Melbourne on the traditional lands of the Kulin nation. Before we commence, Telstra would like to acknowledge the rich and diverse stories, Cultures and Traditions of All First Nations People across country.
We acknowledge the lands of the traditional custodians across country
from the To the Kulin and Kurnai Nations of the South and the clans of Nipoluna.
To the Ngunnawal peoples and the Sunrise peoples
And we pay our deep respects to them, to their wisdom keepers of the past, to the knowledge
Our lands nurture us as we continue the connection and our spirituality
This morning, we will firstly hear from our CEO, Andy Penn, who will outline our new strategy. This will then be followed by deep dives on consumer Enterprise Strategies from Group Executives, Michael Ackland and David Burns. We'll then take a short break before a deep dive presentation on infrastructure Telstra InfraCo's CEO, Brendan Reilly. And finally, our CFO, Vicki Brady, will talk to our financial strategy. We'll then take questions from analysts and investors and then media.
I will now hand over to Andy Penn.
Well, thank you very much, Nathan, and welcome, everyone, and thank you for joining us today. Can I firstly start by saying I sincerely hope everybody is continuing to stay safe and strong during these very difficult times and I'm Disappointed that this is another event that we have had to hold virtually? We certainly missed the opportunity to catch up with you face to face, Particularly on key strategic topics such as today's announcements. Nonetheless, this is a very exciting day for Telstra As we announce what comes after T22, T22 has been a defining strategy for us. It's been ubiquitously in our narrative For the last few years, it is guiding every strategic decision we have made.
So it's quite the moment today for us to be sharing with you What will be succeeding in? What comes next? We launched T22 just over 3 years ago to fundamentally transform And radically simplify Telstra. It was at a time when we absolutely needed to change. It built on the Industrial investments that we announced in 2016 to digitize our business and to build the networks of the future.
Now through T22, we have transformed Telstra and today, 3 years into what has arguably been The largest, fastest and most ambitious transformations of a telco company globally, we're a vastly different company. 3T22, we have set up Telstra to play a leading role in accelerating the digital economy. In a more connective world, a world where everybody and every business is spending more and more time online. Today, I'm very excited to announce what comes next, what comes after T22. And the answer to that question is T25, a new strategy, a new strategy to accelerate growth from our core and to scale our new businesses, A new strategy to further enhance customer experience and to respond to the permanent shifts that we are seeing in how people work and live.
A new strategy to capitalize on the establishment of InfraCo and the changes to our company to create a more contemporary structure for the future. If T22 was a strategy of necessity, T22, T25 is a strategy for growth. And in its implementation, we will be using exactly the same disciplines and governance that we used for T22. The metrics and the milestones, the roadmaps and the scorecard, and this is why I am confident it will be a success. Why change a winning formula when you don't need to?
And when we have delivered it when we have delivered T25, We will be a vastly different company again. So let me share with you the details of it now. Ultimately, we believe that it is people who give purpose to our technology. So we're committed to staying close to our customers And providing them the best experience and delivering the best technology all on the best network because Our purpose is to build a connected future so everyone can thrive. It's a purpose that is underpinned by our values, Our values which guide everything that we do and how we approach the decisions we make, and they will be the underlying principles For how we will deliver T25.
We make it simple, we care, we are better together, And we are the changemakers. T22 was very much about being changemakers as we knew we needed to take a radically different and ambitious approach To achieve the scale of transformation that we have, T25 will take this to the next level. Like T22, T25 is built around 4 key strategic pillars. Firstly, to provide an exceptional customer experience you can count on. If T22 in the last several years has taught us anything, particularly as we have navigated the migration to the NBN And responding to the consequences of COVID, it is that providing a better customer experience is our number one objective.
Nothing is more important than continuing to improve customer experience and this sits at the very heart of our T25 strategy, Leveraging the capabilities that we have built. The second pillar is to provide the leading network and technology solutions The Deliver Your Future. Telstra has always been at the forefront of telecommunications technology, not just in Australia, but globally. And never more has this been more important than today in a world of rapid digital adoption. As new technologies continue to evolve including 5 gs and eventually 6 gs, satellite and cloud, edge compute, The traditional worlds of telecommunications and compute technology are blurring, and this is creating exciting opportunities and solutions But we will continue to lead in bringing to customers and of course, and as always, bringing them to customers on Australia's best And Big East Network.
The 3rd pillar is to create sustained growth and value for our shareholders. As we move forward from the period of the transition to the NBN and out from underneath that economic headwind, The significant interventions that we have made in turning our business around and taking costs out are now starting to flow through to our bottom line. This will enable us to increase underlying EBITDA, ROIC and earnings per share. And with strong cash flow generation And opportunities ahead to monetize assets, we will focus on maximizing our frank dividend and seeking to grow it over time, Investing for growth and returning excess cash flow to shareholders. The 4th and final pillar is to be the place you want to work.
Competing for the best talent in the future is going to rely on more than just the basics. In the new post COVID world, we need to excel at flexible and hybrid ways of working, We need to accelerate our digital leadership, and we need to be a leader in doing business responsibly. So these are the 4 pillars that set the direction for Telstra under our T25 strategy. It is a strategy created to deliver the things that we know We'll sharpen our competitive edge because they respond to the trends that are shaping our market and the evolving needs of our customers. It is a strategy focused firmly on taking customer experience to a whole new level and it is a strategy that is focused on growth.
And ultimately, it is a strategy to leverage the capabilities that we have built under T22. And in the same way that T22 would not have been possible without the foundational investments we announced in 2016, T25 Would not have been possible without all we have accomplished in T22. We will deliver T25 through our 5 key businesses: Consumer and Small Business, Enterprise, New Markets, which comprises Energy and Health, International and Infrastructure. The four pillars of our T25 strategy will guide the strategy for each of our businesses, whilst each will also have its own ambition, Reflecting the place it is at and the opportunities that it has ahead. For Consumer and Small Business, our ambition is to leverage our new simplified, Digitize an in source platform to create brilliant experiences that enable our customers to work, learn and play.
You will hear more from Michael Acland today About how we will achieve that. For our enterprise business, our ambition is to deliver profitable growth and value by connecting our customers With Australia's most trusted and secure technologies and services. This builds on our ambition to deliver overall revenue and EBITDA growth Across mobile, fixed and international this financial year, and today, David Burns will take you through this in more detail. For our new markets, our ambition is very simple. It is to grow our health and energy businesses profitably and to scale.
We're very excited by these opportunities and convinced on their strategic direction, but we also know we need to increase Their economic significance to the value of Telstra. For international, our ambition is to deliver profitable growth and value By leveraging the growing strategic significance of our international network, There's no doubt that with rapid digital adoption and the changing geopolitical landscape, the importance of our international assets has taken on A whole new complexion. We plan to hold a second Investor Day on the 16th November this year at which we will cover health, Energy and International as well as give you a deep dive into what we're doing in product, technology and networks And the Place You Want to Work pillar. Finally, our infrastructure business, where our ambition is to improve access and utilization for our infrastructure And wholesale customers and to deliver growth and value and enhance monetization opportunities. And you going to hear further from Brendan Beithey today on InfraCoat.
With that, let me now describe each of the T25 strategic pillars a little more detail. Firstly, our strategy to provide an exceptional customer experience you can count on. We have already much improved episode NPS, strategic NPS and significantly reduced the number of calls coming into our contact centers. However, we have yet to benefit from the full experience and the benefits that flow from the changes we have made And this is going to give us some positive tailwinds in customer experience as we move into T25. Notwithstanding this, we do have some migration initiatives to get through and I know we do not always get it right, so we need to take customer experience to a whole new level.
So what does that mean? It means make it even easier for our customers to engage with us and getting to a point where for over 90% Of customer service requirements, they only need to engage with us once and it's done. No more interactions, just once and done. It means a fully integrated channel experience, so customers can engage with us and meet their service needs in the channel of their choice. Whatever their service requirement, we can meet it online, in our stores or through our contact centers, whichever way the customer chooses.
It means using technology, AI and analytics to provide customers with a more personalized experience In products and services and to be more predictive of issues and resolve these before the customers even know they are happening. Customers will be able to call us and speak to an Australian contact center rep or visit a local expert in our Telstra owned store network Because our customer experience is going to become even more localized. It means scaling our Telstra Plus program, which already has 3,500,000 customers And expanding it into a full sales and marketing channel to rival the best rewards programs in Australia. We will do this by leveraging our many relationship with Australia's largest enterprises and by partnering with small This is to create greater reach into local markets and more rewards for our customers. It's a huge opportunity and we are targeting 6,000,000 Telstra Plus members by FY 'twenty five, making it one of the largest rewards programs in the country.
For our enterprise customers, it means delivering business outcomes with telecommunication products, edge compute, Security and AI delivered and managed as an integrated service all through Telstra Purple. The pervasiveness of technology and businesses today and its ability to transform them no longer means that one size Or one solution fits all. Enterprise customers want tailored technology solutions to solve their most pressing operational business problems and opportunities. And to meet this need, we have structured our enterprise business to have a greater industry alignment with technology experts in specific industries Providing scalable industry specific solutions. For our enterprise customers, it means getting the level of support and engagement Just right, more than 90% of the time as there needs change.
And for our infrastructure and wholesale customers, It means improved access to our assets and an improved and more digitized service experience. With all of these improvements, we intend to maintain the discipline that we introduced in T22 in ensuring Our products and services remain simple and easy to use, and we intend to more than half the number of customer complaints. Pillar 2 of our T25 strategy is focused on leading network and technology solutions that deliver your future. There is no doubt that we are continuing to see rapid technology adoption and innovation. This is manifesting as a convergence between core telecommunications technology and software based technology solutions.
What this means Telstra not only needs to continue to lead in telecommunications technology with the best networks, but also increasingly lead in the role that software plays In orchestrating and managing the network and integrating applications and services for customer solutions. Under T25, we will continue to invest in our network leadership in 5 gs with 95% population coverage and 80% of all mobile network Traffic being on 5 gs by FY 'twenty five. We also plan to double the number of metro sites leveraging small cell technologies To further densify and add capacity to the network, we will add at least another 100,000 square kilometers Of mobile coverage to our national footprint to support regional and remote customers. By FY 'twenty four, we will have extended our 4 gs coverage to 100% of our network footprint, enabling us to continue to lead in composite coverage, speed and performance for 4 gs and 5 gs as we move to close 3 gs. And this will, of course, set us up well for the early planning on 6 gs, which will clearly be on the agenda for discussion by the end of our T25 program.
We would also continue to lead and differentiate in fixed. Now the NBN may be fully rolled out. However, Not all NBN fixed services are the same. How we connect and how we assure customers We'll be differentiated and their in home experience will be significantly enhanced as we leverage capabilities such as The Telstra Smart Modem, Telstra TV, our Wi Fi doctor and other capabilities we have in the pipeline to improve the experience in the home. We will also leverage these for our energy customers and with smart meters, we will be providing a holistic in home solution.
Increasingly, however, it's not just the physical network where we can differentiate. Historically, The key aspects of functionality in telecommunications networks have been relatively static, but with software, we can increasingly dynamically manage this. Automation and artificial intelligence also enables us to deploy predictive and self managing functionality to the network orchestration layer And increasingly managed network in a way that becomes agnostic to the technology access type. Now I know there's a lot of tech speak in all of this, but these are incredibly important capabilities and we have been investing in and building them. To net it out though, what it means at a practical level is we will increasingly be able to dynamically manage the key aspects of network experience, which are Capacity, speed and latency, security and resiliency.
Historically, these key aspects of functionality I've been typically set upfront for a particular service, a technology or a customer, and thereafter have been hard to change. We can also now increasingly empower our customers to do this themselves, and therefore, they will be able to manage their workloads. In being able to dynamically manage and therefore, we can differentiate and tailor services around customers, products and industries, Which is the key to increasing our ability to monetize and you're going to hear more about how we're going to do that from Michael and David in their presentations. Finally, by using a more distributed architecture and moving more workloads to the edge with cloud And in conjunction with this dynamic approach that I've mentioned to network management, we will enhance resilience for customers by creating smaller blast zones in the event of an issue. To put it simply, if one part of the network goes down or is impacted, the network automatically reconfigures to ensure the smallest Our 3rd pillar is built around sustained growth and value for our shareholders.
At our recent financial year 'twenty one full year results announcement, we were able to demonstrate how we have reached a turning point In our financial trajectory, through the many initiatives under our T22 program and as we come out from under the shadow of the NBN economic headwind, We demonstrated how our underlying EBITDA grew in the second half of FY 'twenty one compared to the first half and how we expect it to continue to grow. T25 will build on this and Vicki will take you through our financial strategy a bit later. But in summary, Our focus is, firstly, to build financial momentum across the portfolio to deliver growth, particularly through growing mobile services revenue, Improving fixed profitability, turning around enterprise, building profitable scale in our businesses in our new markets. Secondly, to deliver a further $500,000,000 of cost reductions from FY 'twenty three to FY 'twenty five On top of the $2,700,000,000 we have already committed for T22, while at the same time investing for growth. Thirdly, by focusing on cash conversion and generation ahead of net profit.
Fourthly, Through continued active portfolio management to unlock value and manage the balance sheet, this will include exploring future monetization opportunities for InfraCo Fix. And fifthly and finally, by creating value for shareholders through our capital management framework, which we have updated and simplified. Before I talk to our financial ambitions, let me just comment briefly for a moment on the progress we are making on the restructure, Which is obviously an important precursor to potential monetization. The restructure of Telstra With a new holding company and 4 key subsidiaries, InfraCo Fixed, Amplatel or InfraCo Towers, Telstra Limited or Servco and Telstra International is the key final step in our T22 commitment To establish a standalone infrastructure business to drive performance and set up optionality post the rollout of the NBN. We are seeking to implement the restructure through a shareholder and court approved scheme of arrangement.
All steps in the restructure process are progressing well, and we are optimistic in finalizing the restructure before the end of T22 With the scheme meeting now likely to be early next year. This will position us well to consider monetization opportunities As part of our T25 strategy that we've announced today. We also know the government is considering appropriate amendments to the relevant Commonwealth legislation, So it reflects our new structure once it is implemented. In making these changes, the government is applying a principle of regulatory equivalence. That is to say that the regulatory obligations that currently apply to Telstra would also apply to the entities in the corporate group In effectively the same way.
So with these initiatives, our financial ambitions are to deliver Underlying EBITDA of 7,500,000,000 to 8,000,000,000 in FY 'twenty three on top of the guidance this year of 7,000,000,000 to 7,300,000,000 And to continue to grow underlying EBITDA out to FY 'twenty five, achieving a mid single digit EBITDA CAGR for the whole of the period of 2.25. To get underlying ROIC to around 8% by FY 'twenty three and to grow it beyond then To deliver high teens EPS CAGR from FY 'twenty one to FY 'twenty five to support our ambition To maximize a fully franked dividend and seek to grow it over time. And finally, to deploy excess cash flow Beyond the fully franked dividend into future growth opportunities and returning excess cash to shareholders. As I mentioned a moment ago, Vicki will take you through our financial strategy and ambitions a bit later. But as you can see, they are transparent, They are bold and they will deliver significant value to shareholders.
So with that, Let me now turn to the 4th pillar of our T25 strategy, which is about building the place you want to work. There is no doubt that the experience over the last 18 months with COVID has completely turned work on its head. In such a short space of time, It has transformed how we think about the way we work and about where we work. It has even caused us to think about why we work And who we work for? What values do they hold?
What role do they play in society? And what opportunities do they offer me as an individual to make an impact? I firmly believe that the companies of the future that will be successful and the companies that will attract, Retain and motivate and inspire the best talent will be those that can embrace the change around us and use it as a catalyst To create the place people want to work. There are essentially 3 ways that we will bring this to life at Telstra through T25, By excelling at new ways of working, by accelerating digital leadership and by doing business responsibly. So firstly, excelling at new ways of working.
Through T22, we have moved almost 17,000 people to now be working in agile and we now have the largest at Scale agile workforce in the country. With T25, we will further evolve our agile at scale approach, Totaling more than 70% of our agile teams to be at level 4 maturity by 2025. We will also enhance our approach to talent acquisition, Mobility and career management as we embrace the flexibility enabled by new hybrid ways of working. There is no going back to the way it was pre COVID and we have already implemented a number of initiatives to further enhance flexibility at Telstra, Such as location agnostic contracts and the flexibility for the overwhelming majority of our people to work virtually. Through these initiatives, we plan to take our already high employee engagement scores to a whole new level targeting top decile by FY 'twenty five.
The second aspect of the place you want to work is digital leadership. Now I've already spoken to our strategy for leading Network and Technology Solutions to Deliver Your Future. That is about the underlying technology. What I'm talking about here is the digital mindset We need to bring to that technology and our ways of working because as we become more of a technology led company And our requirements to continue to build new capabilities in new areas such as software development, data analytics and artificial intelligence increases, We also need to increase our attractiveness as the place to work for this type of talent. There are four elements to our approach to digital leadership.
Firstly, We will lead with a digital first and data driven mindset and by 2025, we will have 100% of our key business processes enhanced by AI. Secondly, we will embed digital ways of working such as expanding our use of biz DevOps and build our digital skills in software and data. Thirdly, we will focus on delivering an outstanding developer experience and digital partnerships. And finally, Our approach to digital infrastructure will be cloud based with a decoupled architecture using APIs to increase speed to market and improve efficiencies. We expect to have 100% of key business applications using API architecture and 90% of applications on the public cloud infrastructure by 2025.
We will talk more about that at our 2nd Investor Day in November, highlighting the first APIs we're focusing on. The third and final aspect of The Place You Want to Work is the stance we take on doing business responsibly. There is no doubt The community expectations of what this means have changed and big businesses, including Telstra, have some way to go in building and maintaining trust With the communities in which they operate. Also, key talent wants to work for companies that have a strong focus on sustainability This is only going to increase over the period of our T25 strategy. For Telstra, there are many aspects to this, but there are 3 that I want to focus on that are key.
1st and foremost, it's about having trusted operations. This goes to every aspect of our business From making sure our sales practices are appropriate to ensuring our supply chains are ethically based, from making sure our products and services and contracts are fair And inclusive to ensuring we support vulnerable customers from being there for our communities through natural disasters to providing them Support for our customers and communities through the impact of COVID as we have done and from ensuring our suppliers do not exploit their workers To ensuring our workplace and remuneration systems for our people are fair, transparent and supportive. The second is the actions we take in relation to the environment. In many ways, as the provider of the largest platform for the digital economy in Australia, We are already making a very positive impact by enabling many businesses to move to doing things digitally that they had previously been doing physically. The flip side of this, however, is that it drives enormous amount of extra traffic onto our network and that in turn increases our power consumption And puts pressure on our environmental footprint.
We have therefore set ourselves very clear and ambitious climate goals To reduce our absolute emissions by 50% by 2,030, to enable renewable energy generation equivalent to 100% of our consumption By 2025 and to be carbon neutral. And we've already made good progress reducing our absolute emissions by 11%, Enabling 3 major renewable projects in solar and wind farms that get us to 50% of our renewable target And we're by being Australia's largest certified carbon neutral company. The final aspect of doing business responsibly is the role We play in supporting digital inclusion.
Down through
history, it has been the case that at every significant technological leap forward, Those that can least afford to be left behind are those that are left behind. And so too has this been the case with the digital economy And that has only been exacerbated by the increased digital adoption necessary in response to COVID. Whilst the government has provided many support To help people during COVID, access to many of those benefits is hampered if you are not digitally included. And also, if you were alone and feeling isolated before COVID, the restrictions now in place mean your situation has only worsened, Particularly if you are digitally excluded. It is behold on us, therefore, to ensure that everybody is included, to ensure everybody can enjoy the benefits of being connected.
Our digital inclusion index tells us that too many Australians are still facing real barriers to online participation, Barriers that include accessibility, affordability and digital literacy. This is particularly the case for regional and remote Australians. Now clearly, there is more important work to do here and we are committed to playing an active role through a range of programs, including Significant investments that we are making in regional Australia, launching a satellite service in FY 'twenty three, connecting 1,000,000 customers in vulnerable circumstances And building the digital skills more than 500,000 Australians. So these are the 4 pillars that set our overall ambition A strategic direction under T25. To provide an exceptional customer experience you can count on, to provide the leading network and technology solutions that deliver your future, To create sustained growth and value for our shareholders and to be the place you want to work.
And just as we did through T22, We have also established a scorecard that lays out the key milestones and metrics that underpin these pillars. It shows how we plan to keep Track of our progress and how we will hold ourselves to account. It's ambitious in its breadth and its depth And like T22, we may not hit every measure 100%, but I would much rather be bold and clear about the aspirations that we have. Now I won't go through this in detail now because when you hear from Michael, David and Brendan shortly, you will see at the end of each of their presentations How they plan to deliver the key metrics on this scorecard. What I will say though is that we are committed to holding ourselves to account and delivering T25 And we are going to be very transparent with you about the progress we are making, and we will update the scorecard and share it with you at every results presentation.
But first, we must finish the job on T22 because without it, many of the initiatives that I have outlined this morning will just not be possible. When we launched T22 in June of 2018, we knew we had to act more boldly. It is clear in my mind that initially We did not respond quickly or significantly enough to the reality of the impact of the NBN on Telstra. Before T22, we were not Focused enough on transforming and improving our core business to mitigate this. We were too dependent on investments outside of the core.
But we have addressed this and we've addressed it very clearly and our T22 program has been a clear success. We have radically simplified our business, Reducing the number of consumer small business plans and market plans from 1800 to 20, we've reduced the number of calls to our call centers by more than 2 thirds And we're well progressed in our strategy to bring these back onshore and our licensee stores back in house. We've cut our Workforce by 1 third, reducing our direct and indirect headcount by more than 25,000. We have removed on average four layers of management. We have delivered cost reductions of $2,300,000,000 and we are on track to deliver our T22 productivity target of $2,700,000,000 By the end of this financial year, we have repositioned our investments in Foxtel and Telstra Ventures, and we have improved the performance of our Health business, Which is now strategically very well positioned for the future.
We've successfully established InfraCo and we are progressing our corporate restructure And we have monetized over $2,000,000,000 worth of assets, further strengthened our balance sheet and we have completed the $2,800,000,000 Towers deal from which we have announced an on market share buyback of up to 1,350,000,000. We've taken a leadership position on climate change and the environment And importantly, through all of this change, we have seen positive movements in the way our customers and our employees view us.
So finishing the
job on T22 is critically important over the next 9 months. And for us, it means progressing our digitization And customer of migration to the new technology stack, completing the group restructure to drive value from InfraCo, whilst preserving Telstra's core differentiation, Extending our leadership in 5 gs and consolidating our position as Australia's largest 5 gs network provider, delivering overall enterprise revenue EBITDA growth and restoring financial momentum to our enterprise business, launching a new energy business, growing services and building deeper relationships with our customers through Telstra Plus And delivering on our net cost productivity target of 2,700,000,000. So with that, let me close. This is an important day, an incredibly exciting day for all of us at Telstra as we announce our plans to transition from transformation to growth From T22 to T25, from a strategy we had to do to a strategy we want to do. It's a strategy that Builds on the strong foundations that we have built over the last 3 years and remains focused on what matters most, our customers, Our people, our shareholders and on supporting the creation of a vibrant digital economy in Australia.
It's an exciting strategy to meet an exciting future. As I said in my opening, Telstra is a vastly different company to that which it was 4 years ago. With T25, we will be a vastly different company again. It will be a vastly different company for our customers who will have access to ultra convenient personalized Right first time experiences that are 100 percentage year enabled. We'll be a vastly different company because our diversified portfolio will be delivering growth in revenue, EBITDA and EPS as we seek to grow dividends.
We will be a vastly different company again because the seeds of our investment in energy and health We'll see these new businesses growing profitably at scale. We will be a vastly different company again because of the world class returns and value We are driving from our infrastructure businesses. We'll be a vastly different company again because of our network leadership with 95% 5 gs population coverage And it densifies full cell network and expanded regional coverage. We'll be a vastly different company because of our leading network and technology solutions Delivering for our customers' futures. And we will be a vastly different company again because of our full focus on cost, we'll see a further $500,000,000 worth of cost out and industry leading cost measures.
And finally, we will be a vastly different company again Because we will be the place you want to work with Australia's largest agile, at scale workforce, flexible, location agnostic, future ways of working, A workforce that is defined by its culture of digital leadership and doing business responsible. I'm now going to hand over to Michael Ackerman, who's going to take you on a deep dive It's our Consumer Small Business Strategy. But before I do so, in the sequence, we will just share a little video with you as I wrap up. So thank you very much.
Rapid advances in technology help keep us connected in new and different ways. The pandemic has also accelerated the use of new technology as people's lives have moved more and more online. People now expect instant, ultra convenient experiences that give them what they want, when and how they They expect more personal and localized services that predict their needs and solve issues long before they become a problem. Use of Data, AI and machine learning will deliver experiences that make people's lives better. Businesses and governments will rely more and more on secure On demand solutions that can scale on 1st class networks.
Cloud based technology, 5 gs, edge computing and other new technologies will help Our T22 strategy has been about simplifying the way we do business, improving customer experiences, Reducing our cost base, making us a more agile organization and has driven progress on our Telstra InfraCo plans. Now we have these foundations, we're ready to take advantage of the big changes and disruption around us to deliver a better digital future, a connected
Thanks, Andy. It's a pleasure to announce the next stage of our strategy for consumer and small business customers. There's no doubt the past 18 months have seen a fundamental change in technology use and connectivity has never been more important to how we work, Learn and play. Our ambition is to deliver profitable growth and value by creating brilliant experiences. It's experiences that keep us connected with the ones we love, enable us to be entertained, be educated, be employed, Run businesses and access the goods and services that we need.
T22 has set the foundation for what we will deliver in T25. We think about our next ambition through the lens of 6 building blocks. I'll take you through each of them in more detail, but at a high level. We will transform how we engage by deepening our local expertise, building deeper relationships and trust with local communities across the country. We will help Australians get the most out of their connectivity by continuing to lead with our world class network And leading the market on how customers can access it.
We will be a trusted partner in the home and business, bringing together everything our customers need And giving businesses the tools to grow in the digital economy. We will leverage Telstra Plus to bring a new ecosystem of value for our members. We will establish Telstra as a full service tech retailer, the destination for all your technology needs. And finally, we will expand our multi brand reach through more partnerships, being in more places for more customers. Before we get into the detail of the new strategy, I wanted to briefly reflect on the achievements delivered through T22.
We've radically simplified our core connectivity products from 1800 to 20 in market plans with more than 8,500,000 services now on those new plans. Our new technology stack is at scale with over 50% of sales and 100% of our frontline teams active on the new platform. We launched and grew Telstra Plus to more than 3,500,000 members. We have transformed how we serve our customers. 70% of service interactions are now delivered digitally, up from 40%.
We've reduced our inbound calls by 2 thirds, and this enables us to answer 100% of these calls in Drea, we're well progressed on bringing our retail store network in house. And lastly, we've continued to invest In leading network experiences with over 1,600,000 5 gs devices and 2,300,000 smart modems connected to the network. Our ambition is to deliver growth and value and our T22 foundations have put us in a position to do just that. Our mobile business has been radically transformed. We now have a simple portfolio with no back book.
The headwinds of excess data removal And device subsidies have gone, and we have a clear path for value and growth across all our brands. The Home and Business Internet, NBN headwinds are now also largely behind us and we have a pathway for margin growth as a lean NBN reseller. We see growth in fixed wireless, in home services and scale in our energy retail business. T22 was the investment phase For T Plus, as we grew members and points balances. Through T25, we will move strongly into value realization as the program matures And we expand on the ecosystem.
Our strategy is to grow hardware margin, now that subsidies and bundling are gone And we'll capture more of the value through the hardware lifecycle, enabled in part by insourcing our stores. And finally, our focus on simplification, Digitization and operational discipline will remain critical not only to delivering cost outcomes, but importantly customer outcomes. Now, returning to the first of the building blocks, which we believe will deliver our ambition. The first is to create More personalized experiences for our customers as well as more local interactions. Whether you're in the city, a regional town or you live more remotely, connection And local community has never been more important.
There is nothing like locals helping locals. We've achieved a lot in our T22 program to Prove the customer experience. Transactions on the new technology stack are simpler and faster. We're well progressed on the migration of consumer mobile customers to the new digital stack. By mid next year, all voice calls will be answered in Australia and in sourcing our stores will provide an integrated experience across our retail network.
And we'll continue to focus on responsible business by doing the best for our customers no matter where they live, but we know we have to do more. We're accelerating the shift to more personalized and locally delivered experiences. Whatever the need, customers will get the same seamless service in store, on the phone or online. We're rolling out diagnostics to solve customer problems before they know they have 1. With stores in sourced and our agent at home program, We'll be creating integrated experiences across stores and our contact centers.
Agent at Home will also allow us to leverage talent pools across rural and regional Australia And make our service more resilient. We'll provide more industry expertise for all Australian small businesses and a larger support presence, but more on that later. Critical to deepening our local expertise will be transforming our frontline culture and capability, Leveraging our Future Ready program and deepening relationships with key community stakeholders. We know connectivity plays an essential role in social inclusion. As Andy said, we've committed to building digital literacy skills for an additional half a 1000000 Australians by 2025.
Lastly, we'll be integrating more customer insights and data to deliver real time next best experiences to optimize how we support our customers across all channels. There are 3 ways in which we'll measure our success. Achieved once and done more than 90% of the time by 2025, Right first time and second time perfect. We want to make sure you only need to ask once and we get what needs to be done, done. We're going to lift our strategic MBS by at least 25 points and half complaints by 2025.
Secondly, helping Australians get the most out of their connectivity, whether at home, at work or on the go. This starts with us having the best connectivity experiences available. We have the best mobile network. We have the largest 4 gs and 5 gs coverage, Bringing faster speeds to more Australians across metro, regional and rural Australia. We're committed to maintaining this fleet and in fact our gap to competitors Has been widening in the last few months.
By 2025, we expect to have 80% of mobile traffic on our 5 gs network, A network that delivers better experiences in entertainment, working and learning. We lead the ACCC ranking for average NBN download speeds, Excluding underperforming impaired services, we're in the number one spot in the Netflix Speed Index. Supported by world leading network management, self healing, proactive fault detection and experience optimization enabled by real time AI, A network you can feel safe using secured from the core all the way to your end device and this will deliver leading reliability and resilience when it matters. This means our customers get the best performance at home, at work and on the go. We'll also change the way our customers buy and access these connectivity Historically, we've monetized through excess data and data inclusions.
In fixed, we've seen monetization of speeds And in mobile, we've included 5 gs only in our top three plan tiers. David will talk more about how we're already monetizing 5 gs through adaptive mobility. Through our leadership in network, we'll continue to deliver value and growth by creating experiences rooted in how customers use connectivity, Plan tiers optimize for work from home, gaming or streaming and prioritization to ensure you get performance when it matters. We'll move towards a more technology agnostic approach, talking less about complex industry jargon like FTTN and HFC and mid band and millimeter wave And focus on using the best technology available for customers to deliver the experience they want, whether that's the NBN or 4 gs or 5 gs. And finally, there's an increasing array of connected devices beyond handsets and tablets to wearables, to AR and appliances, All of which create the opportunity for a unique and optimized connection.
Ultimately, this will create value, both from service revenue growth in mobile And from a growing and profitable home and business internet proposition. Now to being a trusted partner in the home and for businesses. Our homes are becoming more mixed use and multi generational. Increasingly, our home is where we learn, our children learn, we go to work or we run a business. It's not just about an Internet connection, it's about an increasing number of devices requiring connectivity and a range of different services and how they all work together seamlessly.
Getting the basics right is critical. Our ambition is to make products and services that are more plug and play and simpler, products that just work. We already have a strong presence in the home through existing assets like smart modem, powering reliable Wi Fi and enabling Smart diagnostics through Wi Fi Doctor. In fact, our NPS for smart modem customers is 18 points higher than those without one. Telstra TV is aggregating all your favorite streaming services, being it Netflix, ABC iView or Binge, delivering universal search and the best Streaming experience on your own big screen.
Our partnership with Foxtel complements this well and we've been instrumental in lifting Foxtel streaming subscriber numbers With almost 1,100,000 on Kayo and over 800,000 on Binge since it launched, the need for support across home ecosystem remains even for tech savvy customers and we want to be there to set up, optimize and manage all the tech in your home. Delivering this help through local presence, enhanced personalized support is key to unlocking the power of technology for more Australians. Energy and Smart Energy Management will form part of this integrated proposition and we believe this will help us be a top 5 energy retailer in Australia. With these connected experiences across entertainment, energy, tech support and security, we expect to see an increase in services per household. For our small business customers, the ability to compete in the digital economy was important, it's now urgent.
Whether you're a hardware store owner or a barista in a coffee shop or a farmer, being successful in the digital world is essential. We want to be there for small businesses and be the trusted partner making it all work together. Therefore, we will continue to expand our offering. We're standing up an integrated suite of services with leading partners, which will bring to market through our go digital professional consult process. This includes ICT services like standardized IT support, cybersecurity including Harmony by Checkpoint, digital customer engagement, for example, digital marketing offers and support, Accounting and collaboration tools like MYOB as well as professional and managed services.
We're investing in our people capability to support this From our Telstra Business Technology Centers to the thousands of accredited experts trained across our retail network and Dedicated connection managers to support customers as they transition their fixed connectivity. But critical to delivering more for these customers Is completing digitization for small business, resolving the issues getting in the way of customers becoming digitally active. Our ambition is for at least 50% of our small business customers to be fully digitally active by 2025. This will be critical to unlocking our target to double our small business apps and services revenue by 2025. Now before we go on to the next section, we'll play a short video about Telstra Plus, an important element of our future ambition.
2 years ago, we launched Telstra Plus as part of T22 as a way to reward our customers. Now more than half of our 3,500,000 members are actively engaged in the program, redeeming more than 1,000,000 rewards. The difference it's making to our customer experience is clear. Telstra Plus members rate us on NPS 18 points higher than nonmembers. Now with T25, Telstra Plus will expand to rival the best rewards programs in Australia today.
We will then use predictive capabilities to personalize offers based on what our customers are interested in and local to where they live. With this, we'll be able to help Businesses grow in their local markets. We will also significantly expand the partner ecosystem so customers have a broader range of products and services they can Earn and redeem points with, so customers will be able to earn Telstra Plus points for buying flowers from their local florist
all the way
to earning points on their next holiday. It's all part of our ambition to make Telstra Plus one of Australia's best rewards programs.
So Telstra Plus will be the cornerstone of how we engage more deeply with our customers. Since launching Telstra Plus, we've got a base of more than 3,500,000 members and our strategic NPS is 18 points higher for members than non members. Pleasingly, membership keeps growing. More than 1,000,000 rewards have been redeemed so far, meaning increased hardware and service sales. We want Telstra Plus One of the most valuable rewards program in the country.
By 2025, we want 6,000,000 members, engagement to 80% and to triple the value of redemptions. Now is the time to evolve expanding our partnership ecosystem and connecting our consumer And small business customers in unique ways. We have a large and growing and engaged member base and through a range of partners we'll offer our customers new ways to Earn and redeem points. From an earn perspective, we've started the relationship with Booking.com and Huddl, and redemptions can be made through all of our core We see the opportunity to expand both the earn and burn side to be significant. We've built a sophisticated marketing and customer insights platform and we'll leverage these insights to bring unique offers and value both to our partners and to our Telstra Plus members.
We want to use the program for our small business customers to access more of their customers in new and unique ways, And we've developed a unique platform which allows small businesses to develop compelling insight driven offers and present those to an engaged consumer base. Those customers can then seamlessly get the benefit. We've begun piloting this program with around 40 small businesses from a florist to a hair salon and a wine shop, Able to market directly to Telstra Plus members. There's lots more to come, so stay tuned. Now turning our ambitions Turning to our ambitions around being a technology retailer.
Our customers increasingly think of the technology and experience that they want first And the connectivity as the enabler second. Outright purchases of handsets have been growing for many years and the range of connected devices continues to expand. Our ambition is to be the place and destination for connected technology, not just to buy it, But to support our customers across the whole lifecycle of that technology, we want customers to know that when they buy from Telstra, everything just works. And if it doesn't, they can come to us and trust that we have all the services and advice they need. Our research tells us this is why customers buy from us now.
Bringing our licensees in house means we'll have one of the largest corporate owned retail networks in Australia. We see Significant upside in this scale to expand both our range and the margin we capture through hardware. We will leverage our retail and customer scale to introduce new services, Specifically in hardware repair support and trading, driving both incremental revenue margin and more ways to connect and engage with our customers. We will establish new retail formats, further integrate across physical and digital experiences, leveraging AR and VR, scale click and collect And to our delivery commitments, all supported by local expert staff. Our commitment to rural and regional customers will continue to grow.
As we know there are needs that are unique to customers who live outside metropolitan areas. To better serve our business customers in regional Australia, We will be expanding our physical presence of our Telstra Business Technology Centers and these centers will benefit from our growing account management services. This way, even more regional small businesses will have direct access to the expertise they need in their local communities. Lastly, our multi brand approach. Through T22, our multi brand strategy has been highly successful in delivering both growth and value.
We will as we deliver T25, we will continue to look use our multi brand strategy to expand our reach in mobiles And moving more significantly into NBN and into a broader range of services. Belong remains critical to our strategy and we'll continue to scale and lift value in Belong Across both fixed and mobile. We also remain committed to building on our successful partnerships with JB Hi Fi And Boost, and we'll be looking to expand both partnerships into new categories. We are also exploring agency partners, Partnering with leading Australian brands to give more Australians the opportunity to experience the best network. The agency model approach allows us to focus on reach and value rather than just competing at lower price points.
So in closing, We're embarking on a new chapter of growth, building on the customer capability, product and commercial foundations of T22. Through T25, we will deliver profitable growth in mobile and fixed and increased hardware margins, Maintain operational discipline to deliver cost and customer outcomes. Deliver a step change in strategic NPS 25 points with an episode of MPS of over 40 points. Commit to getting it right for our customers, achieving once and done more than 90% of the time, Cut complaints by a third in the next 2 years and half in the next 4, get to 6,000,000 customers on Telstra Plus with 80% being actively engaged And maintain our focus on responsible business for all customers no matter where they live, including keeping 1,000,000 customers in vulnerable circumstances connected Every year, we will do this at a time when the way we use technology in the home and on the go has changed forever. We are incredibly well positioned to drive profitable growth and value by creating brilliant experiences that enable our customers to work, learn and play.
Thank you. And I'd now like to pass over to David.
Thanks, Michael. It's a great opportunity to set the direction for our Business and Telstra's T25 strategy. Telstra's enterprise ambition is to deliver profitable growth and value by connecting our customers With Australia's most trusted and secure technology and services. We will achieve our ambition by executing across 5 key building blocks. Firstly, growth and disruption in our differentiated fixed and mobile connectivity products secondly, Continuous sustainable growth and scale in our NAS business.
The relevance of technology to our enterprise customers continues to accelerate. Everything we do must anchor to our customers and how we help them make the most of their technology investments. Our 3rd building block is providing an exceptional end to end customer experience 4th, aligning our go to market Key industry groups with a focus on industry solutions. And 5th, our last building block is Telstra Purple, which allows us to bring this all together, Driving NAS growth by delivering and managing solutions, which make a difference to our customers. Over the last 3 years, we've worked hard to take complexity out of our business and lay the foundations for our return to revenue and EBITDA growth in FY 'twenty two.
We've transformed Telstra Enterprise and simplified many aspects of our operations, including reducing our enterprise products by 50% Since 2018. And our work is paying off with our strategic customer satisfaction score or NPS Lifting 22 points across all customer segments since 2019. We've transformed the enterprise operating model and launched Agile at Scale to simplify the way we work. We now have around 2,300 Telstra Enterprise employees Working in an agile way, we've built strong foundations for the future. We've completed a comprehensive redesign of both our Data connectivity and mobility portfolios with the launch of adaptive networks and adaptive mobility.
Our new adaptive offerings are designed to give our customers Much greater flexibility while monetizing 5 gs and disrupting ourselves to grow in data and connectivity. We're steadily migrating customers to our new digital stack where we're building our new products. And we've developed and launched Telstra Connect, Our digital self-service portal that's now available to all eligible enterprise customers. Our services business is focused on our next generation technology portfolios, which will be our growth platforms for the next wave of advancements in the Internet of Things, Security and Cloud Technology Solutions. Finally and importantly, we brought together our investments in 8 Successful technology services businesses and 1500 digital transformation experts to launch Telstra Purple, Now the largest Australian owned technology services provider.
So now let's dive into each of these building blocks highlighted In our enterprise ambition, our reliable, secure and flexible network connectivity It's core to our business and fundamental to our FY 'twenty five ambition. As our customers transform their IT environments, Our connectivity underpins their adoption of cloud based applications and productivity tools as it supports hybrid workloads across all Cloud environments, public and private, and enables customers to maximize productivity from their distributed workplaces and workforces. The enterprise connectivity market continues to be disrupted. New technologies have enabled customers to adopt managed Internet services To support their operations and NBN's continued focus on this market has helped new entrants grow quickly. We responded to these dynamics by launching Telstra's adaptive networks, connectivity offerings That bring together the flexibility of an unbundled connectivity and access layer and also helps customers embrace the latest in SD WAN technologies.
Our SD WAN propositions offer the flexibility and economy of a managed Internet service with a key advantage As they are delivered over our reliable and secure Telstra fiber network. The reliability and security of Telstra fiber is key. Our engineering team continues to lead the market with network smarts and resiliency, and we have access to more than 250,000 kilometers of fiber. We will also continue to partner with NBN to drive new customer growth and capital efficiency. And as we see network convergence across fixed and mobile, we're in a market leading position to maximize the power of our mobile network.
Through these disruptions, our customers will reap the benefits of a seamless software defined network Operating across multiple technologies, which will support and protect our data and connectivity revenues. As disruption stabilizes and volumes continue to increase, we will return this portfolio to growth by FY 'twenty four Whilst maintaining our T22 cost disciplines to ensure continued profitability. Similarly to what Michael outlined, our 5 gs leadership underpins our FY 'twenty five ambition. As our 5 gs network opens new opportunities for our customers to transform their business, in turn, driving continued revenue growth. Today, our adaptive mobility plans continue to deliver positive results through SIO and ARPU growth As our customer fleets customers' fleets transition to the new proposition, including specific 5 gs offerings.
We also see growth in mobile as Australian businesses adopt cloud PC and associated managed services With 5 gs connectivity to enable work from more places. 5 gs technology and innovation is also opening up new areas For Mobile Network Revenue Growth. Last month, we launched enhanced enterprise wireless, an Australian first 5 gs solution that gives customers reliable and consistent connectivity akin to their fixed connection. And we're backing it up with a 99.9% availability guarantee at eligible sites. The first time we've introduced an up Time availability SLA on a mobile product, and it already has great traction in the market.
In a stadium context, we can use 5 gs And Edge has a dedicated high bandwidth network and flexible configuration. For example, multi camera viewing for broadcast personalization We're a dedicated live news or sports feed that uses a 5 gs network slice. We're also using 5 gs to power thermal and crowd density cameras, Critical in a COVID environment, alongside wayfinding and geospatial tagging, so your phone can save you a spot in the queue or guide you to the nearest amenities. So when you couple 5 gs with digital transformation solutions, we can see how it will drive revenue growth in both NAS and mobiles As technology driven businesses business outcomes scale on our network. Some particularly interesting examples that we're seeing include augmented and virtual reality, Such as how 5 gs is enabling the next generation of immersive training and collaboration.
Telstra Purple helped the Royal Australian Air Force distribute mission control operations to Air Force personnel across Australia via virtual reality. 5 gs with augmented reality has also helped to power the support of better decision making in disasters or emergencies. And when body cameras can relay live information in high definition to command centers to help firefighters, police, Search and rescue, paramedics and others to make better coordinated operations. We also collaborated with the Downer Group on a solution That combines apps and cloud data and augmented reality to assist with preventative maintenance. Our NAS portfolio is Telstra Enterprises' largest revenue contributor and a key driver of our growth ambition.
We've built this business to capture market growth in IT Services and continue to differentiate and drive usage of our connectivity propositions. In today's COVID world, our NAS solutions are more important than ever To our customers as they focus on using technology to continue to be productive despite the disruptive COVID continues to send their way. We know that security, hybrid work, digital transformation and driving operational efficiencies are not only keeping CIOs, but CEOs and Boards are awake at night, which is driving growth across our industry. Closest to our core, We continue to focus on providing our customers with secure adaptive infrastructure services, Responding to the future network needs of our customers. Growth in this portfolio will be driven by cyber products And services anchored on our secure networks.
Our workplace and digital practice solutions That integrate connectivity, mobile, devices and security, help our customers as they continue the shift away from full time office based work. We expect digital services to grow as we support our customers with continued innovation To drive their digital transformation agendas. We also have a clear strategy to grow and monetize our products and services In these technology areas, managed services, professional services and reusable intellectual property. By delivering these solutions as managed services over our connectivity networks, we continue to drive annuity revenue Managing both our technology and that of our partners, such as Cisco, AWS and Microsoft. I'll talk more about how Telstra Purple will continue to drive differentiation across our business later in the presentation.
But next, let me turn to customer experience. We know that having the best technology experts and solutions means nothing Our ambition is to give customers an exceptional end to end customer experience, Which means personalized experience where it matters and effortless digital ones for their convenience. To do this, we're focused on 3 things. Firstly, our people have meaningful sales conversations that add value to our customers, understanding their needs And offering solutions that will make a difference to their most pressing problems. Secondly, the day to day sales and service interactions can be done digitally, Self served with the touch of a button via our Telstra Connect app.
And thirdly, we'll radically simplify our processes and billing So that customers can easily understand which services they've ordered, how they're delivered and billed. Just like the customer engagement expectations you may have with a bank, For example, a valuable conversation for a mortgage for the app for day to day banking. And we will track customer feedback to ensure We get the right balance of valuable conversation and easy self-service options. We'll know we have achieved this ambition when we get these three things. Firstly, customers give us that 90% rating or more in our support and engagement for the right balance of face to face and digital experiences.
When customers can choose to perform all of their key service interactions digitally and lastly, When more than 95% of billing disputes are resolved within 1 billing cycle. The pervasiveness of technology to transform businesses does not mean that one size or solution fits all. While driving a simplified product and contracting experience across all of our customers is key to improving customer experience, We also know that there are some industries where we have an excellent opportunity to drive growth by delivering industry aligned products and services. As Andy referenced in his opening, to take advantage of this opportunity, we've organized our business so we have greater industry alignment With dedicated propositions and go to market. We will be technology services experts in selected industries, Providing scalable industry specific to meet their pressing needs.
We've announced our first three industries where we have identified the biggest opportunities for growth, and we have dedicated cross functional teams already working with customers and producing some great results. We believe that Telstra has a significant role to play in government at the federal, state And local levels. As a sovereign provider with Australia's largest network, we have a unique opportunity to provide governments of all levels with secure, Sovereign Intelligent Infrastructure. And with our unparalleled visibility of the network and strategic points of presence around the globe, We are in a unique position to help keep Australia safe. The mining and energy industries collectively represent a 1 point $7,000,000,000 per annum addressable opportunity for Telstra, which we will focus on by helping these customers manage their key priorities To plan and prepare for high impact industry shops, better manage their workforce, safety, productivity and rising costs to name a few.
We support their response to these key priorities and transformation agendas by building on our sizable core connectivity base To develop solutions using automation, robotics, IoT, 5 gs and edge computing. This sector is one of the most challenging for reliable and consistent communications as they often have both remote sites And the need for complex communication architecture making private LTE networks very appealing to these customers. A great example is Newcrest that uses a Telstra private LTE network at their Lihir operation in PNG, Where it has seen significant improvements in network performance and reliability and being able to implement new mining technologies And most importantly, be able to maintain safely their mine in hot areas. Our 3rd focus industry have chosen is to combine supply chain and logistics, retail and the agribusiness As they have very complementary needs and technology solutions to meet them. Our relevance to these cohorts, Particularly where creating efficiencies is critical is increasingly is increasing significantly as technology enables faster And more reliable operations, better compliance, improved safety and always that continuing drive down of costs.
Many of these solutions are underpinned by our leading networks, including our Telstra IoT network, Australia's largest IoT network, Which our customers use to monitor assets and gives their business a competitive edge. For example, we're working with Linfox to implement an advanced telematics and management solution across its entire fleet that delivers advanced transportation And logistics data and quality benchmarking information to enhance their safety. Telstra Purple Also recently developed an asset tracking system with Kennards Hire so it can gauge how equipment is used and schedule preventative maintenance When it makes the most sense, reducing the risk of downtime and promoting safety. Now let me turn to Telstra Purple, our biggest opportunity for growth, our biggest differentiator and how we stitch it all together. I'm going to go to a video now.
2 years ago, we combined 8 tech companies to create Telstra Purple, now the largest Australian owned technology services provider. Transform and grow. We're continuing to expand our capabilities in cloud, security and IoT. Since launching Telstra Purple, we've grown With the addition of Ethicon, an IT service management specialist and Telstra Purple Managed Services, which gives customers access Through T25, we will keep growing by exploiting our biggest differentiator, Telstra Purple's ability to design, execute and integrate solutions from our partners, all combined with Telstra's leading networks. By doing this, we'll continue driving real world outcomes, Supporting organizations like Ambulance Victoria to better monitor a patient's status or track the number of ICU beds, ventilators And personal protection equipment in use during the pandemic.
As society responds to shifts in how we live and work,
As you just saw, Telstra Purple's 1500 experts work closely with our customers to solve problems quickly And effectively using Telstra owned solutions, a reusable IP of our partners. As these solutions are delivered by Telstra's leading networks, we are well placed To grow our managed services business and pull through connectivity. Unlike other telcos or professional consultancies, Telstra Purple has the technological vision, intellectual depth and the economic scale of the biggest systems integrators and consultancies Whilst maintaining its heritage of fast moving boutique IT service providers. This allows Telstra Purple To take on significant projects, levering Telstra assets, including InfraCo, to deliver and manage long term Customer or nation building programs. Since the onset of the pandemic in Australia, Telstra Purple has been engaged to help drive real world outcomes That make a meaningful difference in Australians' lives.
For example, in addition to the critical work we did with Ambulance Victoria, We also help the Victorian government develop RideSpace, a mobile optimized website that helps passengers figure out How busy a particular train station or service might be to ensure social distancing. Purple's brand awareness is currently 25%, Which is up 9 points from this time last year, whilst consideration is 74% for the same period, Up from 64% last at the same time last year, showing the value our customers place in the services Telstra Purple provides. Our ambition is to increase this brand awareness to 65% by FY 'twenty five. So let's summarize the key ambition and financial targets of our Telstra enterprise ambition. First, we will return our data and connectivity portfolio to growth by FY 'twenty four.
Secondly, We'll drive profitable growth in mobiles and monetized IoT. We will grow NAS revenue In mid single digits CAGR to FY 'twenty five and maintain mid teens EBITDA margin, And we will continue to maintain our T22 cost disciplines across the portfolio. Our plan and targets well underpin Telstra's ambition and are incorporated into the T25 scorecard. With this plan and these measures, we're confident of achieving our ambition to deliver profitable growth And value by connecting our customers with Australia's most trusted and secure technology and services. Thank you.
I'll now hand you back to Nathan Burley.
Thanks, David. We're going to take a 10 to 15 minute break now. So please be back online just before 10:45 to hear from Brendan Reilly on infrastructure. Look forward to seeing you then.
At the AFL, we have a huge archive of 22,000 tapes that have been sat in an air conditioned room for many, As part of preserving the history of the game, the archive has really presented a fantastic opportunity to enable our vision of bringing fans closer to the game.
Well, obviously, the AFL is the custodians of the history of the game, but it's really important for future generations to be able to view this. The digitization of the AFL's archive is a mammoth task. So there was 2 challenges. 1 is that the tapes themselves are degrading and the other is Telstra, the methodology to be able to take once we've played the linear videotapes and or film, was to Send that digital information to an innovative high grade storage device known as AWS Snowball. That allows us to keep The material on large storage devices that then can be linked to the cloud.
The AFL were really thankful For all the work that was done by the Telstra Purple team to be able to spin up servers in the cloud and enable The high-tech reporting, so the Telstra Broadcast Service were involved in allowing us to get a high speed data link from AF Hill House and then obviously
The archive from our media perspective is purely access. To be able to access those video files in a really organized fashion at our fingertips is really the biggest
opportunity for us. So Telstra's involvement was
really critical in this So Telstra's involvement was really critical in this project and getting it off the ground. We see the digital archive really powering some of the innovation in the future, especially our video endeavors such as AFL on demand. The archive digitization from start to finish to vendor management to migration to storage is a really complex project, but Telstra are really critical in being able to make all of that happen and supporting all of our teams from end to end.
Good morning, everyone. Well, it's just been over 10 months Since our last Investor Day when we updated the investors on Telstra InfraCo. Over this time, we've made a lot of progress. We've completed our 1st full year of operation as an integrated infrastructure business. We've delivered on all of our financial operating and safety objectives as Part of T22, reported first half and full year InfraCo specific financial results, Successfully launched new market offerings, including dark fiber and data center and closed the sale of 49% of InfraCo Towers with net proceeds Of $2,800,000,000 Looking forward, as part of T25, our ambition is to improve the access, Utilization and scale of our infrastructure to deliver growth and value.
And in order to fulfill InfraCo's ambition, We are going to focus on 6 building blocks. While we have market leading infrastructure assets, it's important we continue our efforts to make them more to the industry in the nation. The way we will do this is by further productizing our assets with standard offers, rate cards and fulfillment terms, Digitizing the customer experience across planning, design, ordering and fulfillment investment in new builds, which I support customer requirements and leverage existing infrastructure to create new solutions. We're proud of the Infrastructure expertise we have amassed over many years. However, it's important we take steps to further enhance this Through completing key hiring, including a focus on external specialists and leaders to fill required roles to support growth, Working with our industry partners to develop longer term capacity, skill and safety disciplines and developing new capabilities in professional services So we can be a full infrastructure solution provider to the market.
InfraCo has a diverse asset base, And it's important each of our businesses are globally competitive and sustainable. This includes measuring reporting asset business performance Against global standards or national standards where appropriate, increasing our focus on maintenance, asset lifecycle management and emissions to ensure we have a safe And sustainable asset base and enhancing and digitizing asset records to support business operations and monetization. We're delighted to have launched Amplitel Towers earlier this month with an Australian consortium made up of the Future Fund, Commonwealth Superannuation Corporation and Sunsuper managed by Morrison and Co. We are committed to executing the business plan we have agreed Through a collaborative and transparent relationship at all levels, effective governance with the Amplitel Board And a focus on operational excellence and portfolio growth to generate long term returns. We've not made any announcements on InfraCo fixed monetization timing, acknowledging that InfraCo fixed is substantially larger than towers And is multi asset.
So our immediate focus is to build greater flexibility and optionality to realize value from our fixed infrastructure assets With the potential to take advantage of opportunities to maximize value for Telstra shareholders and accelerate the program I've worked post the restructure, including leveraging learnings from the Amplitel process to build investor ready data, financials and Asset Business Plans. All of our customer relationships are extremely important, Especially with NBN and other major national service providers. While they will always be a priority, the commercial models we Fused have been operating for many years and are relatively mature. For the InfraCo and Telstra partnership, it is in its infancy And will require focus over the years ahead. This includes delivery of competitive infrastructure Solutions to enable Telstra to achieve its market objectives implementation of the intercompany agreements Restructuring outcomes and governance arrangements, which leverage the strength of Telstra and also instill further trust and confidence And long term collaborative planning to shape forecasts, sustain the partnership model And provide future growth capacity.
InfraCo's passive asset portfolio leads the market in terms of Scale, coverage and mix. All asset businesses are operating effectively and delivering to expectation after the 1st year in operation. The portfolio is valuable not only in terms of its income and EBITDA generation, but also its monetization potential. All businesses are underpinned by long term stable contracts with Telstra, NBN and the broader industry. Our renewed focus on infrastructure, together with new products and growth plays, can continue to drive their long term value.
The Amplatel sale price of multiple, together with the speed at which the sale closed, is indicative of the quality of the InfraCo assets. InfraCo fixed is over 6x larger than Amplitel on an income and EBITDAL basis. And while it is more complex in nature, InfraCo fixed He's a very strategic portfolio. The ambition for Amplitel is to be Australia's leading full service Wireless Infrastructure Services and Solutions Provider. Our plan on a page summarizes our key strategic objectives: Provide better access to our tower infrastructure, improve service offerings and asset health, pursue growth and drive asset efficiency And be the home of tower infrastructure expertise.
In relation to driving improved access to our towers, we will be a full service provider The industry of both passive and active solutions. While we'll not be a mobile operator, we are seeing demand for the provision of both the passive and active elements MyBond Network builds as well as strong interest for specific industry solutions. 2 of our outcome measures By FY 'twenty five, there will be 250 new towers constructed and 700 additional tenancies. From a technology perspective, we decided 9 months ago to stand up a new asset management solution for Amplotel. It provides the business with the contemporary technology platform it needs to manage all aspects of the asset base.
The deployment has now enabled site and asset inventory for over 8,000 sites, tracking of design and construction of new sites, Colocation site access and ordering, operational reporting and the customer portal. We've also moved quickly to create digital twins of our network, leveraging drones and our asset management platform. We have a plan to have 90% of our mobile structures in digital as digital twins by FY 'twenty 5 and lead the market in how digital twins can be leveraged Turning to shareholder value. There are items Which we must execute well on to continue to drive long term value. The first is the management of the cost base, Of which over 60% relates to property.
The second is further improving our maintenance and life cycle management standards To be the best in the industry. And finally, driving growth from new towers, new tenancies, new services, market expansion and site acquisition. Strong execution across these areas will enable us to grow underlying EBITDA. The current FY 'twenty 5, outcome is for low to mid single digit growth. The last objective on this slide is a very important one as it relates To our people and our partners, we've seen a tremendous reaction from our staff, our subcontractors and the broader industry to the launch of Amplitel.
We aim to be the employer of choice, co create strong construction and delivery partnerships and be agile in everything we do. A core nonnegotiable element of everything we do will be a focus on the health and safety of the extended team and maintaining a strong same day reporting regime, which will be one of our FY 'twenty five operational measures. I'm excited to provide further details of our Amplitel Digital Twins program. This is all about bringing real world assets to life on our customers' digital devices to transform their experience. Already, we have over 1,000 digital twins, and we'll complete the digitization process for 90% of our mobile structures by the end of FY 'twenty Clive.
Designing and deploying mobile networks requires long term detailed planning, and we believe digital Twins will be a game changer in terms of cost, speed and quality. We created digital twin using drone scans, And these scans feed directly into our asset management platform. For any subsequent drone scans, have enabled auto updates of all data attributes in our systems. The end to end solution will also enable a range of analytics and reporting capabilities As well as facilitate site incident reduction and optimization of our maintenance activities. To bring this to life a little more, let's go to a video on our Digital Twins program.
The creation of Amplitel in 2021 to be Australia's leading full service wireless infrastructure provider is already returning value And now we're ready for growth. As part of T25, we'll provide easier Access to our world class assets, increased utilization and deliver new products and industry solutions. We'll build 250 new towers, Increase tenancies by 700 and create digital twins for 90% of our mobile structures. With 3 d digital twins, drone scans We'll feed directly into our asset management platform and offer advanced analytics and reporting capabilities. Customers will see a real world mirror view of assets and the surrounding environment, completely transforming how they plan and maintain sites and identify potential incidents, all done remotely From their digital device.
With almost everything that happens today relying on telecommunications, we're reinventing the way infrastructure is built
Our key strategic objectives for InfraCo fixed are to provide better access to our fixed infrastructure, Improve service offerings and long term asset health, drive asset efficiency, pursue growth and be ready for the next Phase of optionality and be the home of fixed infrastructure expertise. While we have been successfully providing to our fixed infrastructure for many years, there are a range of initiatives we are taking to make this easier and more comprehensive. The first is through new fixed products, and we're planning to launch at least 10 new products by FY 'twenty five. In the past 9 months, we've launched new InfraCo Dark Fiber products. While our customers have wanted us to offer dark fiber, we first needed to develop and launch start fiber services in order to address the market opportunity.
On a similar front, we have underutilized data centers, But we've not had clear market offerings or the ability to offer network agnostic access. With our data center product launch last month, we have now solved these challenges, and there are plans to extend these Data center services across additional sites nationally. Of course, everything we do needs to be digitized, and we have our automated Duct reservation system, new digital tools for fiber planning and ordering and improving tools for our information on our data centers. The security, monitoring, maintenance, emissions reductions and lifecycle management of our assets is extremely important, And we're implementing new asset management platforms to drive these areas and working with industry to extend our focus on proactive maintenance practices. We also have a substantial build program for over 6,000 kilometers of new fiber through to FY 'twenty 5.
A real time example of our focus has been the risk analysis and climate modeling on our fixed infrastructure. The work has culminated in a new summer disaster preparedness program for a range of flood and fire prone sites across regional Australia. As a result, we're completing ahead of the summer disaster zone, power side upgrades and fuel top ups, factory lifecycle replacements, Ground maintenance and cutbacks, helicopter landing make ready inspections and proactive fiber repairs. We've allocated $600,000,000 of capital for new infrastructure to the end of FY 'twenty five. Around 60% of this is for planned fiber growth with the remainder across DUCs, fixed network sites and data centers.
Our property rationalization program will continue with plans for 50 sites by the end of FY 'twenty five. We will leverage these as well as procurement and scheduling optimization with our partners to drive operating efficiency. We're confident of delivering low single digit EBITDA growth to FY 'twenty five. Like Amplatel, InfraCo's fixed is also attracting a lot of interest from professionals looking for an exciting career in infrastructure. Aside from building our talent, competencies and practices, we also have other obligations and commitments to fulfill.
Much of our infrastructure crosses the lands of First Nations Peoples. We believe InfraCo and the industry at large has more work to do on engaging with First Nations Peoples to build more enduring land management models which respect cultural beliefs and sites. We've recently appointed a new land access executive and a team which includes one of our most senior indigenous leaders to intensify our focus in this area. Our fixed network sites do consume significant energy, and we are a key contributor to emissions reductions to support Telstra's Emissions Reduction Commitments. We've commenced a program to reduce our overall energy consumption.
This will be achieved through a combination of investment in lower consumption technology, such as automated LED lighting And improving the efficiency of our air conditioning at sites. While the FY 'twenty plans for InfraCo fixed were created In line with Telstra's overall BAU CapEx envelope, there are additional growth opportunities we are currently evaluating. The opportunities are long term in nature and will potentially service major customer needs or create nation building solutions for the future. We will update investors on these opportunities when it is appropriate to do so and ensure they meet investment criteria for long term infrastructure projects Aligned to the company investment goals, which Vicki will talk to shortly. Lastly, I'd like to comment on InfraCo fixed Post the corporate restructure, while our plan is to be ready for the next phase of optionality, there will be an immense amount of preparatory work required.
The Amplitel process has provided invaluable insights into areas which will require focus earlier in the preparation phase, and property is one example. It's also helped us to mention what we are likely to need in terms of external support to be ready across a much larger multi asset portfolio business. Now just to add some more insights about our new dark fiber products. In a little over 9 months, we have delivered around 190 active services for 22 customers, which includes 8 first time InfraCo customers. Our most recent dark fiber product was for preconfigured high speed NBN Poirierings across 6 capital cities, Which also connect to our data centers.
This is on top of our extensive network of dark fiber with over 300 separate available paths And standardized connections to over 84 NDN Poise and 72 metro data centers across the nation. We have 3 more dark fiber product launches planned for FY 'twenty two, which will see a total of 5 new dark fiber products for this year. In closing, InfraCo is pleased to be a strong contributor To the T25 strategy, and I'd like to highlight some of the key performance indicators on the company's scorecard. Ample Towels to build 250 new towers and add an additional 700 tenancies by FY 'twenty 5, InfraCo Fix to build over 6,000 kilometers of new fiber Amplitell to contribute lowtomid Single digit EBITDA growth and InfraCo Fix to contribute low single digit EBITDA growth Before any additional investment in incremental growth programs, to make InfraCo an exciting place to work With a high performance customer centric culture, which sustains us at the 90th percentile of employee engagement And finally, reducing our energy consumption aligned to Telstra's emission reduction goals. Thanks for listening.
And with that, I'll now pass over to our Chief Financial Officer, Vicki Brady.
Thanks, Brendan. Good morning, and thank you for joining us. This morning, I'm very pleased to take you through our financial strategy for T25. We will then open for questions. Our financial strategy has 5 building blocks to deliver growth and value for shareholders.
These blocks build on the strong foundations provided by our T22 strategy. 1st, We will build financial momentum across our portfolio to deliver growth. 2nd, we will deliver $500,000,000 of net fixed Cost reductions from FY 'twenty three to FY 'twenty five while investing for growth. 3rd, we will focus on cash conversion and generation. 4th, we will be active in portfolio management Before providing you with more detail on each of the building blocks, I will comment on our financial growth ambitions to FY 'twenty five, Which Andy spoke about earlier.
Our underlying EBITDA and ROIC ambitions build on our current T22 commitments. As announced at our FY 'twenty one full year results, our guidance for FY 'twenty two underlying EBITDA It's $7,000,000,000 to $7,300,000,000 This represents mid- to high single digit growth. Our ambition is to achieve DKK7.5 billion to DKK8 billion of underlying EBITDA by FY 'twenty three And mid single digit CAGR from FY 'twenty one to FY 'twenty five. As illustrated today, We have confidence that the momentum we've built towards growth will continue to FY 'twenty five. For underlying ROIC, our ambition is around 8% by FY 'twenty three and to grow beyond this to FY 'twenty five.
For underlying EPS, our ambition is a high teens CAGR from FY 'twenty one to FY 'twenty five. This level of underlying EPS growth from $0.097 in FY 'twenty one provides earnings clarity As we maximize our fully franked dividend and seek to grow it over time. For excess cash flow, Our ambition is to invest for growth and return excess cash to shareholders, in line with our capital management framework. Turning to the first block of our financial strategy, building momentum across our portfolio to deliver growth on Slide 48. This reflects the turning point we have reached, thanks to our T22 strategy.
We are entering a different phase And expect top line revenue growth to be a driver of EBITDA growth. Our ambition is to do the following: First, to drive value growth through our 5 gs mobility leadership. Our FY 'twenty one results included around 300,000,000 Of second half mobile EBITDA growth on the prior corresponding period. We are confident that mobile EBITDA growth will continue, Underpinned by our ambition for a mid single digit mobile services revenue CAGR and ongoing productivity. We also have the final EBITDA benefits flowing through from migrating customers of subsidy and lease plans in FY 'twenty 2.
2nd, to profitably grow our fixed product portfolio across CNSB, Enterprise and Wholesale. This includes MBN Resale, Data and Connectivity and NAS. 3rd, to deliver further net cost reductions While investing for growth, our T22 strategy has achieved simpler and better outcomes for our customers, And we have delivered $2,300,000,000 cumulative cost reductions since FY 'sixteen. 4th, to profitably grow new markets to scale across Telstra Health and Energy and finally, To grow returns from our infrastructure business. Let me now turn to how we will drive mobile value growth on Slide 49.
Our ambition is to deliver a mid single digit CAGR for mobile services revenue through our T25 strategy. Let me now speak to the drivers that support this ambition shown on this slide. First, our technology solutions and our network leadership, Including Australia's largest 5 gs network are critical to our strategy. Maintaining and extending our 5 gs leadership We'll underpin our market position and our price premium. 2nd, with the foundation built by T22, We are customer first with simplified plans and no lock in contracts.
The migration of all customers to these simplified mobile plans We'll provide us significant operational benefits and flexibility beyond T22. We are also positioned to grow our hardware margin Through unbundling, removing subsidy and the in sourcing of our retail stores. 3rd, We believe value growth from 5 gs experience based propositions can drive further ARPU growth. Our lead indicator of postpaid handheld ARPU, Transacting Minimum Monthly Commitment, or TMMC, Has grown by more than $5 since FY 'nineteen. This increase as well as pricing changes across the base A flowing through to ARPU and EBITDA.
We believe 5 gs experience based propositions can drive further ARPU growth beyond FY 2. 4th, new CNFB and enterprise 5 gs products and an expanded device ecosystem We'll also provide new opportunities. As you heard from Michael today, there is an increasing array of connected devices beyond handsets and tablets To wearables, AR, VR and appliances. There are also emerging enterprise 5 gs products that David discussed, From enhanced Ethernet Wireless to 1 of Australia's largest banks reimagining the branch of the future And 5 gs and Edge in sports stadiums. These new products will all create optimized experiences for our customers And drive value and growth in our core mobile business.
And finally, we also expect to continue value accretive growth Through our multi brand strategy, we will continue to use this highly successful strategy to increase reach. This includes Belong, JB Hi Fi, Boost and our wholesale model, where we have consistently achieved Strong SCIO and revenue growth. In addition to mobile growth, there are other areas of growth across our portfolio, Which I will explain in more detail on Slide 50. Our full year FY 'twenty one results Highlighted an inflection point in our fixed products. The fixed in fixed CNSB, The NBN driven decline is now substantially complete.
We expect growing and profitable home and business Internet services And are targeting a midteens NBN resale margin by FY 'twenty three. Across small business apps and services, Our target is to double revenue between FY 'twenty one and FY 'twenty five. While we continue to explore, Test and develop alternative technology options, we expect to limit legacy copper losses to less than $100,000,000 per annum. We are further through the NBN driven decline in CNSB than in enterprise. In enterprise fixed, Our ambition is to return to growth in data and connectivity by FY 'twenty four.
In a mid Single digit NAS revenue CAGR to FY 'twenty five with midteens EBITDA margin. Across enterprise, we are targeting FY 'twenty two revenue and EBITDA growth in aggregate. In Fixed Wholesale, our ambition is to maintain annual EBITDA of around $350,000,000 until FY 'twenty three Before the portfolio returns to growth, within fixed wholesale, we expect data and connectivity to contribute to growth Post the NBN driven legacy decline, our focus is to grow through investment and product differentiation, Including wireless resilience, active and dark fiber hybrid solutions and API based services. Turning to infrastructure. We will continue to drive the performance and recognition of our world class infrastructure assets.
In FY 'twenty two, we expect to revise our disclosure to further elevate Amplitel and InfraCo fixed, Giving more focus and clarity on their performance. As you heard from Brendan today, for Amplitel, We are targeting lowtomidsingledigit EBITDA after leases CAGR, 250 new towers And 700 additional tenancies by FY 'twenty five. For InfraCo fixed, We are targeting low single digit EBITDA after leases CAGR, dollars 600,000,000 of new infrastructure investment And 6,000 kilometers of additional fiber deployed. This infrastructure investment will be within our business as usual CapEx. Turning to new markets.
Telstra Health is well positioned, and we are excited by the acquisitions of Medical Director and Power Health. Our ambition is to grow Telstra Health to become a $500,000,000 revenue business by FY 'twenty five. We are also focused on diversifying growth across other verticals, including in energy, where our ambition is to be a Top 5 Retailer by FY 'twenty 5. Turning to the second block of our financial strategy. To deliver net cost reductions while investing for growth on Slide 51.
We have achieved $2,300,000,000 of annual cost reductions since FY 'sixteen and are confident that we will deliver Our $2,700,000,000 T22 target by the end of this financial year. We are targeting cost reductions in FY 'twenty two are $430,000,000 This includes benefits from digitization, Reductions in IT and network costs, ongoing vendor optimization and labor efficiencies. From FY 'twenty three to FY 'twenty five, we are targeting another $500,000,000 of net fixed cost out While also investing for growth. We believe this ambition will ensure we maintain and improve our leading operating cost metrics for a full service telco. We are already top quartile across many metrics.
However, we believe shareholder value is better supported By not targeting top quartile across all metrics, given our premium position in the market, We have 5 focus areas to achieve cost reductions during T25. We will significantly reduce our IT operating costs. The investment we have made transforming our IT digital stack during T22 Enables us to now focus on removing legacy systems and consolidating platforms. We will transform the Telstra enterprise Customer value chain cost base across order, delivery and activation processes. We will deliver operational efficiency across CMS beef billing, fixed assurance and fixed activation customer episodes.
We will realize standard labor productivity through agile at scale across back of house and support areas, And we will expand productivity discipline across total costs, including sales costs, fixed costs and CapEx. Turning to the 3rd block of our financial strategy. I focus on cash conversion and generation on Slide 52. Pleasingly, in FY 'twenty one, we delivered free cash flow of 3,800,000,000 An increase of approximately $400,000,000 compared to the prior year due to working capital improvements. Cash generation continues to be a priority in our financial strategy.
We can focus on converting EBITDA into cash. CapEx discipline and efficiency will benefit cash. Our expectations for business as usual CapEx Unchanged at around $3,000,000,000 per annum, excluding spectrum. Volatility in hardware revenue in FY 'twenty one Impacted our CapEx to sales ratio. This highlights a shortcoming in this metric.
Consequently, We have updated our capital management framework to reflect CapEx in absolute dollars rather than as a ratio. This change is consistent with how we manage CapEx internally. Spectrum payments are more irregular than BAU CapEx. We expect to pay for the recently acquired millimeter wave spectrum over 4 further equal annual installments. Full payment for any licenses awarded in the upcoming 850900 Megahertz spectrum auction It's expected in late FY 'twenty four.
I will return in a moment to further investments for growth above BAU CapEx. In addition to CapEx discipline, there are several areas of additional focus that will benefit cash. Enduring working capital improvements will benefit cash. We will continue to manage mobile handset receivables and focus on initiatives to deliver ongoing improvements in working capital Across inventory management, receivables and payables. Reducing leases will benefit cash as flagged at our full year results.
Given our shift to hybrid working, we continue to assess our property requirements and may exit some leases early. This may have short term negative impact on D and A, but should result in financial benefits over time. Reducing finance costs will also benefit cash. Finance costs paid have been reducing due to both reductions in net debt And lower average borrowing costs. We expect this trend to continue as high cost debt matures.
In addition to our focus on converting EBITDA into cash, we expect cash flow to remain ahead of accounting earnings, largely due to structurally lower CapEx than D and A. In FY 'twenty one, CapEx was $1,400,000,000 lower than our D and A Of DKK4.5 billion. After adjusting D and A for DKK532 million of lease depreciation And DKK 239,000,000 of spectrum amortization, CapEx was around DKK700,000,000 lower. We expect that business as usual CapEx will continue to be around $600,000,000 lower than adjusted D and A Due to historically higher CapEx and mix of asset lives, cash flow remaining ahead of earnings Provides flexibility for further investment and capital management that I will discuss shortly. Turning to our 4th block of our financial strategy, active portfolio management to unlock value on Slide 53.
We have a strong record of generating additional cash, unlocking value and managing our balance sheet. We illustrated this through T22 with our successful monetization of $2,000,000,000 of assets. We have also now completed the sale of a 49% non controlling stake in our towers business. The transaction valued Amplitel at $5,900,000,000 representing an FY 'twenty one Pro form a EV to EBITDA after leases multiple of 28x. Net Cash proceeds were $2,800,000,000 On Telstra InfraCo more broadly, we are delivering on the promises we made in our T22 To provide greater transparency of our infrastructure assets, improve the efficiency of how we manage those assets And provide optionality in an evolving industry.
This optionality includes ensuring InfraCo fixed is ready to explore future monetization or other opportunities. Across our portfolio, We also retain the discipline to grow or exit investments depending on their ability to exceed ROIC targets. We will take an active approach to portfolio management to unlock value. Now that I've taken you through Howard will drive underlying EBITDA growth, cash generation and unlocking value. I will turn to the 5th block of our financial strategy And our capital management framework on Slide 54.
We will continue to apply fiscal discipline And use this framework to manage capital and deliver shareholder value. The objectives of the capital management framework are to maximize returns for shareholders, maintain financial strength and retain financial flexibility. These objectives are unchanged. The framework includes 4 principles, and we have made changes to 3 of them effective from today. The first principle is a commitment to balance sheet settings consistent with an A band credit rating.
This commitment is unchanged as it continues to be important to shareholders and debt holders. The A band credit rating demonstrates the strength of our business and provides continued access to global low cost capital. The second principle is to maximize our fully franked dividend and seek to grow over time. This principle reflects continued feedback from shareholders of the importance of our fully franked dividend. It also reflects our intention to return as much cash flow to shareholders via fully franked dividends, Which can be sustainably supported by earnings and franking, while also balancing the objectives and principles of the capital management framework.
We are confident in maintaining a minimum $0.16 per share fully franked dividend, subject to no unexpected material events and the requirements of our capital management framework. However, Our franking balance is low. We reported FY 'twenty one EPS of 0 point one five six dollars And grow our franking balance in order to grow fully franked dividends. This replaces our previous principal To pay fully franked ordinary dividend of 70% to 90% of underlying earnings. We have replaced this principle Because we expect our cash flow to remain ahead of accounting earnings, and we are focused on growing underlying earnings into our total dividend.
The split of ordinary dividend funded by underlying earnings and special dividend funded by net one off NBN receipts It becomes less relevant in the future. We remain committed to returning in the order of 75% of net one off NBN receipts. However, we expect FY 'twenty two to be the last year of special dividend funded by the NBN receipts. The third principle is ongoing business as usual CapEx of around $3,000,000,000 per annum, excluding spectrum, as I have already discussed. Turning to the last principle of our capital management framework, To invest for growth and return excess cash to shareholders on Slide 55.
This replaces our principle To maintain flexibility for portfolio management and strategic investment. The new principle is more specific And illustrates our intention to use the flexibility provided by our cash flow being greater than earnings To invest the growth and deliver additional returns to shareholders, we expect to generate excess cash flow after capital is deployed in accordance With the first three principles of our capital management framework. With excess cash, our focus then shifts to investing for growth And returning excess cash to shareholders. When we invest for growth, we will continue to be disciplined And apply our previously communicated criteria for organic and M and A opportunities. Our criteria for organic opportunities are an NPV that is positive using WACC and appropriate risk analysis.
Organic opportunities could include a long term or nation building infrastructure investment or a major customer project. We are currently exploring opportunities in these areas. Our criteria for M and A opportunities are To be EPS accretive in year 2, to have a return on investment above our weighted average cost of capital by year 3 And any acquisition needs to be more value accretive than a share buyback of a similar size. We preserve discretion to take advantage of longer term strategic opportunities where we expect them to deliver financial returns That exceeds the cost of capital and long term value creation for shareholders. We expect to outlay around CAD 450,000,000 Acquiring Medical Director and Power Health.
We applied discretion acquiring Medical Director given its Strategic significance to our Telstra Health portfolio. Going forward on M and A, we expect our in sourcing of retail channels We're costing the low 100 of 1,000,000. We also continue to assess other M and A opportunities. Turning to options for returning excess cash to shareholders. Our preference is to participate that involve the distribution of available franking credits.
If that is not possible, we will consider share buybacks, Capital returns and unfranked dividends. We have demonstrated this with our recent announcement of an up to 1,350,000,000 On market buyback from the proceeds from the sale of a 49% stake in Amplitell. To conclude, Over the last 3 years, we laid the foundations for growth and to take advantage of the opportunities ahead. We are now a simpler, Leaner and a more digital company compared to where we started T22. We are also a market leader With unparalleled scale, brand and network, we are values based and focused on doing business responsibly.
We have world class infrastructure assets, and we will deliver further value from them. We are excited by the future, With FY 'twenty one marking an important inflection point for our financial performance, we will deliver growth through our T25 strategy By staying disciplined and focused, by continuing to build financial momentum across our portfolio to deliver growth, By delivering $500,000,000 net fixed cost reduction from FY 'twenty three to FY 'twenty five while investing for growth By having a strong balance sheet and focusing on cash conversion and generation, by being active in portfolio management to unlock value And by creating shareholder value through our growth strategy and updated capital management framework. I will now hand to Nathan to take us through Q and A.
Great. Thank you, Vicki. So we'll now start Q and A, beginning with investors and analysts. Now all speakers today are on the call and able to answer questions. And for those that are on the call, to register a question, it is.
We'll move to our first question, which comes from Eric Choi from Barran Joey. Go ahead, Eric.
Thanks, Nathan, and thanks, guys, and congratulations. The outlook hasn't been this positive in years. So great work on executing on T22. My first question is on Unfranked dividends, which is now in your option set. In the absence of M and A, is there anything else holding you back From doing a partially franked dividend in FY 'twenty two or FY 'twenty three, wondering if bondholders are a hurdle at all?
Or are you just waiting to see how your other options Like the buyback performs. My second question is on your T25 ambition. The EPS Growth you're forecasting is pretty much equal to the post tax growth in EBITDA with some tweaks for net interest and minorities. But this suggests D and A doesn't reduce much versus FY 'twenty two, is that right? And why aren't we sort of writing down assets given the D and A and CapEx gap?
And then just a last question, if I could. I'm just trying to unpick that mobile service revenue growth of mid single digit out to FY 'twenty five. Nominally, that's sort of a $1,400,000,000 to $1,500,000,000 number. And I suppose a COVID rebound will get you 200,000,000 Sub growth might get you another $400,000,000 which means you're going to need another $800,000,000 of growth from ARPUs. And if I convert that to postpaid ARPUs, That's sort of another $5 to $6 of postpaid ARPU growth beyond FY 'twenty two.
Is that right? We're sort of, I guess, intimating there'll be More regular postpaid price increases from FY 'twenty three onwards in guidance? Thanks very much.
Thanks very much, Eric. And firstly, look, thank you for your kind comments. I think very proud of what the team has done on T22, put us in a great Position, as you say, I think it's enabled us to have a pretty positive outlook. On your questions, I think I can hand them over to the team to be honest. So I might get Vicki to take the lead on just some of the considerations around increasing dividends in the short term On a partially frank basis is and then I think your second point is really around what's happening with underlying D and A and then mobile services revenue, which Michael Aachen might also like to comment on 2.
So Vicki?
Thanks, Andy, and thanks, Eric, for your questions. So starting with unfranked dividend. So I think the new capital or updated capital management framework obviously talks to the principles With which we'll look at deploying capital. So as you said, obviously, the first three priorities in that framework talk to our balance sheet, maintaining that strong Balance sheet and the A band rating. Secondly, we've got to maximize the fully franked dividend.
And then third, Obviously, the ongoing business as usual CapEx of around $3,000,000,000 So as you said, beyond that, what will we look at? Absolutely, we will look to invest for growth, and that could be organic opportunities or it could be M and A in line with the criteria I spoke to. And then, yes, beyond that, we'll look to return excess cash to shareholders. And as I said, we'll look at All options there could be share buyback, could be capital return, could be unfranked dividend. So that's how we're thinking about that Over the coming period of T25.
Then on your second question about EPS growth and D and A, Yes, our outlook is, from FY 'twenty two, we do expect D and A to be pretty flat through the rest of T 'twenty five, so not expecting Step downs like we've seen over the last couple of years. And to your point around would we look at write offs, so The reason our D and A is sitting higher than our now in year CapEx is due to higher CapEx spend historically And also the mix of asset lives. So higher proportion of long life assets sitting in our base versus where our Current CapEx investments are going. That proportion is now higher into shorter life assets like software. So obviously, we have invested in assets in the past.
Of course, we continue to review, and each reporting period, we do a thorough review of our asset base. And at this stage, we are anticipating that structural difference In our EU CapEx and our D and A to continue at around the $600,000,000 level per annum through the course of T25. And then on your final point on mobile services revenue, Yes, you're right. We would be hoping our borders reopen, and we see some international roaming Return as we look out to FY 'twenty five. And then you're right.
So in terms of what drives Mobile Services revenue growth, what are the things in there? Yes. Obviously, ARPU could play a part. We would hope to see SIO growth return as borders reopen and the Australian population returns to growth. And You heard both Michael and David talk today about 5 gs use cases and propositions and how we look to Monetize that further is obviously important over the T25 time horizon as well.
But I might just throw across to Michael because obviously he's very close to the mobile services revenue growth. Michael?
Thanks, Vicki, and thanks, Eric. I think Vicki covered it broadly. I think the way that I would sort of think about it is we've seen Over the last 5 years with data inclusions getting bigger and bigger as sort of a we've seen that pull down of ARPU and that pull to the middle. And so we're starting to see that turn now as you've seen in our results as we've had 5 gs on the top tiers and as David is saying through Adaptive Mobility, we can start to spread that plan mix and pull that plan mix up with Experience based offers, so that's one and ARPU is a big part of the strategy. I think the other couple of points that I think are worthwhile is As we see those 5 gs sort of use cases and expand is We should expect and we've started to see in many places that expansion of non postpaid handset service revenue as well, so tablets Wearables and AR and VR and so forth, but the bulk of it will be that trend in postpaid ARPU.
Back to you, Nathan.
Thank you. The next question comes from Kane Hannan from Goldman Sachs.
Good morning, guys. Thank you for the update. Just a brief for me as well, please. Firstly, just interesting if you could talk about your Expectations for Telstra's overall revenue trends out to T25, with the mid single digit mobile NAS growth is going to be able to offset the legacy declines. Secondly, just in terms of that mid single digit NaaS revenue KKR, I think you've still got that ISN revenue to fall out and I assume that happens over the next few years.
How do we think about the phasing of that NAS growth? Is it low single digit in the early period and then accelerating to double digits to the end? Hoping you could talk a bit more about the phasing and also when you might hit those margin targets? And then finally, just on the dividend, if I use that high teens EPS Growth and that $0.097 base, and I think you're saying basically 100% payout ratio. It looks like you're saying the first time
you're going to have
to grow that Frank, dividend will be to say $0.18 in FY 'twenty five. Just confirming that's consistent with what you're saying today, as far as does the EPS growth have anything in there for the tailco buyback?
Thanks very much, Okay. Well, I think, look, on the revenue one, I mean, one of the biggest factors has obviously just been what's been happening with Ansett sales and hardware, particularly through the period of COVID, and it's a bit hard to sort of predict how that's going to play out Over time, it's a little bit why we've decided to just go to the nominal number for CapEx because I think the CapEx to sales ratio He's obviously somewhat influenced by that, but I'll get Vicki to comment further on that as well as the mid single NAS margins, which I think also David I can comment on. I'm not sure there's too much more we're going to say in relation to guidance on Dividend, I think we've provided pretty much all
of the
parameters that we can. And the real focus is We're very conscious how valuable and important the dividend is to shareholders. So we're going to seek to maximize it to the extent of the franking That is available and also to seek to grow it over time. And thereafter, we'll assess our excess cash flow Position against the framework that Vicki has already provided. But look, with those comments from me, I might hand over to Vicki to pick up further on All three points and maybe invite David to talk a little bit about the trajectory on NAS2.
Thanks, Andy, and thanks, Kane, for your questions. And Andy, I think you've covered the first one well. So we're not going to comment on overall revenue But obviously, mobile services revenue is a key driver, so we wanted to give that ambition and make that clear. The second question, which was NAS related. So in terms of, yes, mid single digit Revenue CAGR out to FY 'twenty five and then what's the phasing of that?
As you rightly Call out Kane. There are some things we're obviously navigating in that portfolio or on the legacy side and some transition in terms of unified comms as well. So that definitely plays a part in the earlier years in T25. In terms of the midteens EBITDA Margin on NAS, that's obviously already in our ambition set for FY 'twenty two. So we're targeting to get So around that mid teens on NAS EBITDA margin short term, so as part of FY 'twenty two and then looking at To hold that over the T25 period.
And then on I'll get David to comment in just a sec Further on, Nazz, and let me just finally cover off on high teens. You spoke about the high teens EPS CAGR And what is the timing of a potential lift in the fully franked dividend? As we've said in the capital management framework, we're actually we're absolutely going to seek to grow The fully franked dividend, and we've got confidence in maintaining at a minimum of $0.16 a fully franked dividend. I'm not going to talk more about the timing of that. And in terms of what we've included in calculating that EPS ambition, yes, we factored in the buyback that will commence soon using Part of the proceeds from the Amplitel transaction, but there are no further buyback assumptions In that calculation of the midteens CAGR sorry, high teens CAGR on EPS growth.
And on that note, David, I'll pass across to you on NAS.
Thank you. I think you covered a number of the financial points. I guess I'll only add one more A little piece to it. As we've committed to growing the portfolio in this fiscal year, we can't do that without NAS growing. And so that's a clear expectation.
The question was and its content was absolutely spot on. There are some Moving parts, calling apps is a great example of where the disruption of COVID, while volumes are the same, the new Technologies are significant less per unit than some of the technologies of 2 to 3 years ago. So we work our way Through that, I mentioned in my content our next generation growth around security, around managed services and in particular partnering With the hyperscalers, that is an area that we expect to cover that those challenges and And ensure we're in a position of growth. And I'm seeking reasonably consistent growth outcomes To achieve the T25 objectives, and we'll continue along those lines and we'll manage those services as we come through. The last piece That I would comment on is NAS does include a lot of the services above and beyond Areas such as mobility and IoT, and they are core to our growth as well because we will be adding more and more Services around those offerings and the industry alignment is critical to that and growing those services and those offerings On top of those market leading and huge nation coverage in covering Coverage, try saying those three words together, to enable those services to be provided to the businesses we outlined like Supply and Logistics, Agribusiness, Mining, etcetera, that's a real advantage to us.
Maybe I'll pause there.
Next question comes from Entcho Rakowski from Credit Suisse.
Good morning, all. My first question was around the investments growth and M and A in particular. Just interested in whether you can provide us with more color on what areas you might expect to be looking for M and A. It something similar to Telstra Health or perhaps there are other areas you're exploring? Any sort of detail around Quantum would also be quite useful.
Secondly, no announcements around the timing of InfraCo fixed monetization. But can you Give us any more guidance on whether this is likely to be linked to the NBN privatization or perhaps whether you're pursuing a different Timeline and if we assume, I guess, a standalone monetization, would a similar structure to Amplatel be most likely? I don't know how much you can provide us, but any again, any color would be useful. And then finally, the importance of the JV Hi Fi channel in mobile that you explicitly mentioned, are you able to comment on what percentage of new subs It comprises, given there's been a lot of focus more recently on its pricing, whether you see it as ARPA accretive as well or whether it's just One channel as part of your overall strategy. Thank you.
Thanks very much, Encho, look, some comments from me, and I'll see if Micki and or Brendan Want to add anything, and I'll ask Michael to talk about JB Hi Fi. But I would say it's just one part of our overall multi Channel strategy and the reason there's lots of noise on pricing is candidly because I think one of our competitors has Got a bit hot under the collar because it's been particularly successful in targeting customers and winning customers across that are not Telstra customers and Incrementally adding value and customers to our network. So we're pretty happy with that partnership, but I can let Michael talk a bit more About it, but look, on the M and A side, no real change in strategy here. I mean, M and A has been Part of our strategy for a good number of years, we've done a number of acquisitions, Particularly in and around the services space on enterprise and then of course obviously in some of our new businesses particularly In health, I don't think the overall nature of that's going to change unless something Unusual happens or other significant opportunities are presented to us. I mean, of course, domestically, we're very constrained In the context of doing anything in core telco, just by virtue of our scale, I think for competition reasons, We would be unlikely to be able to make any type of significant acquisitions in our core business, but there are opportunities to enhance Some of our capabilities and services through add ons, which we've done in the past in services and we've mentioned health.
And The acquisition of Medical Director was a particularly exciting and interesting opportunity because as you can imagine, The GP sits at the apex of much of the health system in Australia and is where you go to get Referrals to consultants, to experts, to pathology, It's where all of your tests come back in as well. So it's actually quite a strategic focal point. And so that was pretty important. But We also did Power Health a couple of weeks before. So I think that, that will continue to be the case.
It hasn't come up yet today, but obviously, we've been transparent about the discussions we're having on an ongoing basis in relation to Digicel In the Pacific, that's come up in more sort of unusual circumstances, but nonetheless It's interesting. And then in terms of quantum, we're really talking in the tens of 1,000,000 to the low 100 of 1,000,000. I can't concede. I'm not going to rule it out, but I can't see anything at the moment that's sort of north of 500,000,000 Dollars, but as I say, I'm not ruling it out, but I think it's less likely just because of the constraints that I've already mentioned. On InfraCo Fixed monetization.
If we go all the way back to when we launched T22, we said Now one of the things we were going to do is set up our infrastructure business as a separate business unit within the context of Telstra, we were going to do that for a number of reasons. 3 in particular, one was to get greater transparency of those assets. Secondly, to Put them into an environment where they're led by CEOs and Brendan and the team whose clear focus is to commercially operationalize those Assets to the maximum value as opposed to them just being part of the delivery of our networks. And then third reason was to create optionality. I also said at the time that Separating our infrastructure assets out from our core operational business is a nontrivial exercise.
I mean, we're talking about more than 100 years of history here, And it's not much like sort of BHP spinning off South 32 or West Pharma spinning off Coles. This is Integral to our business, so teasing it apart is a very complex and detailed exercise and one that needs To take we need to take a lot of care on, which is exactly what we've been doing. We said it would take years, and we also said that it would be important for us to do that and then to Live in that operational world so that we really understood the implications of all of that. And Brendan and the team have done an outstanding job on that. We're absolutely Bang on track.
If anything, we're ahead because not only have we set it up as a separate business unit, but we're also expecting to Set it up as separate legal entities as well. And we've done, obviously, the deal on towers, which really goes to the point about Optionality. Now I did say that it was optionality in a world post the rollout of the NBN And particularly as we think about a time when NBN privatizes, I don't have any particular insights as to when NBN will privatize, but my guess is it is a good number of years in But my guess is it is a good number of years into the future and probably beyond Our T25 strategy, Eden, I would have thought, I don't know that, but I'm just surmising based on experience, I guess, and instinct. That doesn't mean to say, however, there aren't opportunities for us to monetize some or all of our fixed infrastructure assets in the meantime. But because of the significance of getting the work done on the separation, putting in place the structure, and Brendan's sort of really sort of alluded to this already, There's a lot of work to be done on that.
That's what our focus is now. Then as part of T25, we can turn our mind to Possible monetization options and a structure similar to the towers deal is definitely one scenario which is feasible. But as I said, there are others as well we could consider subsets of assets or the whole of InfraCo fixed. But as I say, that's something that we're going to Turn our minds to when we get into beyond the end of T22 and when we get all of the structuring done and then all of the final Other operational aspects that you would need to get done? Because ultimately, you'd need to get the business into a position where it is due diligenceable.
That was a lot of work to do that on InfraCo Towers. InfraCo Fix is probably 4 or 5 times the size of InfraCo Towers. You could just imagine What's involved there? So look, I think that's probably the comments I would make. I'm not sure, Vicki, if there's anything else you want to add in relation to what I've said or Brendan wants to add on the InfraCo fixed side, and certainly, we'll go to Michael as well.
So maybe just go quickly to Dickie, then to Brendan, then to Michael.
Thanks, Andy. And just to add, I mean, I think you've covered it incredibly well just on the M and A opportunities. Obviously, we look and focus on those areas that are going to help drive and diversify where growth comes from longer run. And as you talk to, Obviously, key acquisitions in health, in other new markets. Obviously, energy is an exciting opportunity.
And you spoke about, obviously, the Digicel opportunity that continues to be under review. And just the final piece will be our services business. Are there areas where we can expand services growth? So That's what I would say in terms of what are broadly the focus areas from M and A. That doesn't rule out other things, but definitely diversifying growth Longer run and helping to support ambitions overall for the business are key.
Brendan, I might hand across to you.
Yes. Thanks, Vicki. Andy, I think you answered it very, very comprehensively. So I don't have anything further to add.
Let's go to Michael to answer the 3rd question.
Great. Great, thanks. Look, I think JB Hi Fi is an important part of our distribution mix. Just to give you a sense, in terms of gross adds, It varies quite a lot month to month as you can imagine. Some months it's as high as 20% or 25% of our gross adds in postpaid.
And from an ARPU perspective or a value perspective, it's proven to be incredibly resilient. And if you look at our prices In JB, over the last few times last few years, we've lifted value there significantly. So it's a really accretive Channel for us and it's been very effective at attracting high value customers. So that's it for me, Nathan.
Great. The next question comes from Darren Lung from Macquarie.
Good morning. Thank you, guys. I just had two questions, please. The first one is just more nearer term on the Mobile market piece. So, appreciate JB Hi Fi
has been doing well. But is there
any update on the $85 price point, Just given one of your competitors has started offering an always in each plan at this past point and sort of initial thoughts on how to respond to this? And then the second one was just on your competitive edge in the energy business. How should we think about Quantifying this, obviously, we can look at top 5 market share, but it doesn't sort of matter in the context of your business and how much of your Telstra Plus customer base, will you manage to convert? And then the final piece here is how are you thinking about managing the commodity risk here?
Thanks. Sorry, Nathan, I didn't quite get the very last bit. It was how do we manage Something to do with risk for Darren?
Commodity risk, the pricing, I was just speaking.
Pricing risk, sorry. Look, On the mobile market, I might get I think that's probably a question directly from Michael, sorry. And then also Michael can also comment on energy as well. But in terms of Competitive Edge. I mean, we did quite a lot of work on this a few years ago actually.
And We already refer quite a large number of customers to energy companies because we don't Offer an energy service ourselves at the moment. And we did quite a bit of research to see what proportion of customers would be interested in acquiring And Energy Service from Telstra, which would be a renewable certified energy, so it's going to be a very green product. We've obviously got 3,600,000 fixed broadband customers. You've also referenced our Telstra Plus customers of 3,500,000 there, which we plan to £6,000,000 and we've also got £8,000,000 postpaid handheld customers. Obviously, some of and or all of those overlap, But we don't actually have to get a particularly unbelievable level of penetration into that customer base To get into that top 5, which we estimate you'd have to get somewhere between maybe 500,000 Subscribers, the other lever that we can pull as well and the reason, by the way, I should say that we've sort of held off until now to do something is that we wanted to get And new digital platforms in place.
And so we now have a completely new CRM system in place. That gives us a lot more capability and functionality To manage that customer interaction and to really sort of manage an omnichannel approach for customers and really track customers' lifetime experiences Through the through their experience with us. So there's a lot of capabilities we can bring to bear. And then I've also referenced as well, We've got quite a bit of technology in customers' homes at the moment, which gives us some quite interesting opportunities to actually help customers better manage their Energy and give them better transparency of how they're utilizing energy both through the Telstra Smart Modem, Telstra TV, The Wi Fi doctor and then also we'll be putting smart meters in for every one of our customers. We'll be starting them from scratch.
And of course, we don't have a back book to protect on energy. So there are some of the dimensions and dynamics of it. I might I'll pass over to Michael to talk about add anything on energy because obviously, it will be a consumer play and then also To talk about the mobile market competitive dynamics and Vicki may want to comment on the risk management stuff, albeit We are going to come back and, as I mentioned in mine, and do a bit of a deep dive on health and energy and international at the Investor Day in November. I just felt there was So much that we were trying to share with you today that we wanted to focus really on the sort of the big ticket items from an economic standpoint that we just thought that If we tried to do it all today, we wouldn't do it justice. So we will do a bit of a deep dive, so we may be able to pick it up then.
But anyway, let me pass to Michael and then see if Pigg has got anything to add.
Thanks, Eddie. And I think you nailed it on energy. I mean, we're the opportunity Is we're there when people are moving and we refer a lot of customers already. You mentioned Telstra Plus, which It's absolutely a way to add to the value proposition. And I think the work that we've done in terms of creating what will be A fantastic integrated experience in terms of the day to day experience as well as the ability to integrate the technology in the home.
So I think Andy's Covered those well. On the mobile market and that sort of $85 price point, it's not a big part of the market and we haven't seen any real Movement from the unlimited offering there and then, but I think it's a move that we've have all been expecting and sort of anchoring it with that competitor at $85 I think is probably a positive position to be in. So Haven't seen any real impact yet, but as we sort of spoke about, we'll be our objective is to move towards More of those experience based plan tiers and that with the increasing data inclusions we're seeing In the market for the last period of time that has sort of pulled the plan tiers together a bit and experiences are our opportunity including 5 gs To sort of spread that out and give people who have a willingness and a need, the opportunity to get To move into those higher plant tiers for different experiences.
Great. Thank you.
And just To cover off on the question related to the energy commodity pricing risk, which I think is what you're asking about. So as we prepare to launch into energy, one of the areas of focus where we have developed Very comprehensive policy and procedures and controls is absolutely the risk that you flagged and called out. The thing I would say is, Firstly, we have some great depth of knowledge and talent in our Energy business who have a lot of experience in this. So That's been incredibly helpful as we've developed those policies and procedures. We also have very strong capability in our treasury team as well, As well as, obviously, through this, we have sought external input from some experts as well.
So I don't want to say I'm complacent. We are very aware of this risk, but I feel we're well prepared and understand how to manage That risk can mitigate it, particularly, obviously, we'll have a chance to learn that in the early stages as we're building the energy business. But yes, we have in place and ready to go detailed policies and procedures to be able to manage and keep on top of that risk. So back to you, Nathan.
Thank you. The next question comes from Roger Samuels from Jefferies.
Can you hear me?
Yes, go ahead.
Okay. Sorry. Yes. First question, just going back to the energy question. So to get from where you are today and To become top 5 energy retailer in FY 'twenty five, do you think that you need to acquire Like a large energy generation asset or retailer to get there?
And my second question is on your $500,000,000 in net fixed cost reduction. Is it fair to say that it's going to be front loaded, so More in FY 'twenty three than FY 'twenty five, just the phasing of that 500,000,000.
Thanks, Roger. I'll get Vicki to comment on the productivity one. On the question for us though, No, getting into the top 5 is not predicated on us doing a large acquisition either of a retailer or an energy Generates sorry, an old company in Energy Generation. It's not predicated on that. It's predicated on an organic approach, really targeting Our customer base, we have probably about 7% of our customers move every year, and so that is a Significant trigger point, but as well as just we've got a very significant customer base, as Michael has already referred to, and we can leverage our Telstra Plus Loyalty program as well.
It doesn't mean to say that we wouldn't consider acquisitions, But we're not it's not predicated, and that's not necessarily our strategy. And to be honest, I'm not sure That is really going to be helpful to our strategy to I mean, one of the things that we see is that the energy industry We'd benefit from a refresh in terms of the sorts of products and services. There's a lot of legacy in there. I'm not sure that we want to buy Best in legacy, but there may be opportunities that add value to our strategy. But as I say, it's not predicated on it.
So Vicky?
Thanks, Andy, and thanks, Roger, for that question. So the $500,000,000 of net fixed cost out, It's over a relatively, I guess, short period when you think it's FY 'twenty three, 'twenty four, 'twenty five, so 3 years. What it will be linked to in terms of phasing, a key component of those additional cost savings really come from Leveraging the full benefits of the migration of customers to the new digital stack, achieving those efficiencies in terms of Back of house support areas as we transition fully to the digital stack. So in terms of phasing, Maybe slightly front end loaded, but I wouldn't say, as I look at it, that I think there's a really Heavy swing in that phasing, I mean, it will be very much linked to us to continuing to deliver those operational efficiency benefits That we're really leveraging from the T22 foundations. Thanks, Nathan.
And our next question is from Tom Beadle from UBS.
Hi, guys, and thanks Maybe a first one for Michael. You spoke about expanding your multi brand breach through partnerships. You go into a bit more detail here, like what are the types of partners that you're looking for? JV Hi Fi has obviously been very success Are you looking for other retailers to partner with or businesses in other categories? And how might these partnerships be structured?
And then just a second question on costs. I realize we've spoken about them a bit, but just wondering if you could quantify how much of that 500,000,000 It's from savings from shutting down your fixed copper networks that isn't in the FY 'twenty two base already, that is? And also, are you assuming any fixed wireless substitution in there? Or could any potential migrations Does the fixed wireless actually be incremental to this? And then I guess actually a third related question to that probably depends On the answer to the second one, maybe another way to put it on the fixed wireless is, are you assuming a meaningful contribution from it in that To grow EBITDA by mid single digits out to 20 25 or could a meaningful contribution from fixed wireless actually result in upside to that number?
Thanks.
Thanks, Tom. I'll get Michael can probably comment on fixed wireless And obviously, on the multi brand thing and I'll get Vicki also to talk about the cost. I mean, just one thing to be clear. On fixed wireless, To the extent it would it's not really having an impact on our cost position In the sense that any costs associated with reselling NBN in the main, which is obviously mainly the NBN Costs itself are not included in they're sort of included in they're in their sort of essentially in their DVCs, I think, aren't they? And Vicki, they're not in the cost base from which we're going to take out £500,000,000 on top of the £2,700,000,000 So in a sense, it doesn't really I'll affect that, but I do acknowledge it potentially has an impact on EBITDA, but we're not assuming a material Contribution to the improvements in EBITDA from fixed wireless, there'll be some, but not sort of Not material in the scheme of things, but why don't I get I'll hand over to Michael to pick up on the multi brand thing to make any comments on fixed wireless And then we'll go to Vicki just to make sure I'm on the money from a financial point of view.
Yes. Thanks, Andy. And on the agency agreements, I mean, we're looking at a range of Different kinds of partners, those that have access to a customer base and have a relationship with a customer base and for which this would add value To their offering and that could be other retailers, but it could be a range of other partners in the market. The structure of those Could vary from sort of an agency revenue share to brand licensing So sort of a sales commission kind of model, and we've got experience with all of those. And really, the objective with those is to Provide another way to reach different groups of customers and to leverage the relationships those brands have with them.
For fixed wireless, we already have customers on fixed wireless and we've been doing that in a really targeted below the one way. We will go Much more above the line with Optics wireless offerings towards the back end of this calendar year and we think there is an opportunity. I think the thing that we're very focused I know is a little bit that point around being technology agnostic and to use the technology For someone's home that is going to give them the best experience that they can get relative to their needs and the experiences they want. And that may Be fixed wireless, in some cases 4 gs or 5 gs fixed wireless in some cases for many households and that will change as Spectrum rolls out and other things occur, but it could also be and we want to be very disciplined on that. It could also be that The best experience for them will be on a fixed connection.
So above the line as we go into the back end of this year And we think that, that opportunity will get bigger as spectrum the different spectrum bands in 5 gs rollout And how that plays forward. So back to you, Vicki.
Thanks, Michael. And Andy, yes, you were spot on the money In terms of that point about the $500,000,000 of cost out is out of our fixed costs. And so the fixed wireless question around If there was more fixed wireless, would that help achieve the $500,000,000 It would help us on our variable costs, not on the Fixed costs, so you were spot on. And Tom, you asked, out of that $500,000,000 of cost out, Was the reduction in copper legacy support costs a big contributor? Look, we continue to obviously manage those as tightly as we can.
But as we've spoken to before, to meet the obligations of the last 8 It does require a lot more of our copper network than 8%, just given geographically that's very spread out in terms of servicing those customers. What is critical in that fixed cost ambition, the $500,000,000 I would say Right at the front of that is, again, our ability to decommission IT legacy systems and consolidate platforms, and that's enabled through the investment we've Forms and that's enabled through the investment we've made in the new digital stack and the transition of customers onto that. And then the second piece, I would say, linked to it, but very much focused on our enterprise business is, again, as we do that Transition across, we see opportunities through the benchmarking there to really continue to drive not just customer Experience benefits but cost benefits in the ease and simplicity in terms of all the way from order to activation to assurance. So I would certainly call out those areas as key focus areas in that $500,000,000 rather than The copper legacy cost reductions. So Nathan, back to you.
The next question comes from Nick Harris from Morgans.
Thanks. Good afternoon. Actually, good afternoon, everyone. Three questions from me. Just First one on the consumer energy target.
I just really want to get my head around the positioning. So just trying to clarify Can you clarify that it's not about selling energy cheaper than incumbents, it's more about adding value on the top with clean energy and smart homes? And if that is the case, is it really an extension of your, I guess, somewhat new go to market where you're looking to in house the retail stores, get locals turning up at houses, doing smart homes, That sort of thing. So that's the first question. Second one was, I guess, for Brendan on InfraCo.
Just obviously, Telstra has got some pretty significant infrastructure. You've announced a couple of upgrades there, 6,000 Kilometers of fiber and some data center upgrades. Could you just talk a little bit about the logic behind what you're doing there? For instance, is some of that fiber upgrade helping lower that last 8% copper legacy costs that Ricky talked about? Or are you actually expanding your network to new locations?
And then just the last one was just M and A. Appreciate, as Andy said, you can't do anything domestically, but would you consider overseas telco acquisitions Expanding your significant fiber network, your submarine cable network. Thanks.
Thanks, Nick. Sorry, just looking for my mute button. Look, just a couple of comments From me, on the consumer energy one, and Michael might want to comment. I'll maybe go to him in a second. But look, It's not fundamentally a sort of looking to undercut the current operators, albeit I Do observe that unlike us, we've very much moved to a world where we're trying to get all of our customers on in market Plans from a telco point of view, so no customers are left on old legacy plans, which are candidly not in their best interests and They're actually on the best current marketing plan.
So we're not sort of necessarily looking to be a price leader if that's The right expression will sort of compete overly on price in relation to what's in the market at the moment. We're looking to compete on service, on differentiation and on leveraging, as we said, our existing customer relationships and then also Leveraging some of our technologies that we're doing and also leveraging our leadership position in relation to Offering a green more of a green or more of a renewable supported proposition. So That's the comment on energy. I'll let Brendan comment on InfraCo. But just in relation to M and A, I should say, and I didn't comment on it earlier, I mean, Interestingly, I think that by setting up InfraCo in the way in which we have, that may also open up opportunities On the M and A front as well, I still think we're a very big infrastructure entity.
So there are going to be, I guess market concentration considerations in that regard, but it may offer other opportunities from an M and A perspective. And certainly, I'll let Brendan speak about sort of projects. In terms of overseas acquisitions, I've referenced Digicel This morning, I think that is a fairly unique set of circumstances. We do have obviously a very extensive submarine cable network throughout The Asia Pacific region and then points of presence in 200 countries around the world as well. And as I mentioned, I think that the Our international network is growing in its strategic significance and importance.
So we're certainly Looking very thoughtfully at that business as to how we can leverage that and continue to grow, I wouldn't put M and A in there As a key priority, but again, if opportunities presented themselves, and I'm Not suggesting that's highly likely, but if they did, we would certainly be in a position to think about them. But it's not something that's sort of Central to our strategy, we're always sort of actively pursuing at the moment. But similarly, as with energy and health, we will come back and talk a little bit more about International at the next Investor Day in a couple of months' time. So with that, I don't know if there is anything else, Michael, you wanted to add on energy. Otherwise, maybe I'll just go to Brendan, but just on the way through, Michael.
No, I think Andy, you covered it. And Nick, the answer to the question is, yes, we want to over time see our energy proposition is Absolutely, caller to the home proposition and that will include the integration of the technology that Andy talked about, but also over time the integration of a
Yes. Thanks very much, Michael, and thanks for the questions, Nick. Yes, so the 2 main areas of development that I spoke about In my comments was firstly on data center itself. So we've got some fantastic facilities, not only large purpose built data centers, But some of our large fixed network sites, we used to call them exchanges. We call them large fixed network sites now.
And a number of those across Australia are data center like. So we've announced a new set of offerings To drive the utilization, increase our utilization of those facilities, so that's the first Major initiative we've announced. And then the 2nd major initiatives was in and around dark fiber. Now we haven't Being in the dark fiber market, even though many the industry and a lot of our customers have wanted to enter into the dark fiber market. And so we've launched A number of products, we've got another 6 products to come.
And that fiber connects major facilities, our facilities, major Data centers across the nation, NBN points of interconnect. So they're the 2 major things that we discussed today. In relation to the 6,000 kilometers of new fiber, you need to sort of think of sort of 3 segments. The first is the dark fiber itself that we have modeled and anticipate selling. There's a wholesale business, which sells a set of wholesale active services that requires more fiber, And then there's David's enterprise business, which also requires more fiber.
Of course, Telstra itself, in terms of All of the services it delivers, including all of the fiber that it needs to power the mobile network, also has a set of needs. So the 6,000 kilometers of new fiber is really sweeps up all of those different categories. What we haven't included in the 6,000 kilometers is any new substantial investments that we will be making in fiber, And that's likely to come from 2 sources. First, major new customer deals and then the second would be Any nation building activities that we would undertake. Andy has indicated we'll have another investor Update in November, and I anticipate providing a little bit more color on some of those areas in November.
Thanks, Nick.
Thanks very much everyone.
Excellent. The next question is from Ian Martin from New Street Research.
Thanks for that.
Andy, thanks for sharing that Plan with this T25, it looks like good follow-up to T22, pretty comprehensive. Three areas that might impact that That you don't sort of have direct control over. 2 of them NBN related. We're seeing quite a debate emerge over NBN access pricing. And In the past, I think you've been careful to say that you haven't got any assumptions built into the mid teens Marg, as you're looking at in Consumer and Small Business.
So I just wonder how important it is for this plan Over the period of 'twenty five for increasing EBITDA to get some resolution of that NBN price and structure and level. Secondly, a bigger NBN impact is likely in terms of their ongoing impact in the enterprise market where they're expanding with the support of a taxpayer Back to cost of capital, again, how important is it to resolve that issue in order to achieve those Those 3 or 4 year targets. And thirdly, an area we've talked about in the past is when we've seen these big strategic investments and Strategic plans. We had a situation where the telcos did the heavy lifting in terms of investment, but a lot of the benefit flows through to OTT and Streaming services and so on. I wonder what you can share with us about your commercial arrangements with the likes of The cloud operators, Microsoft, AWS and so on, just in terms of how the risk is shared and how the reward is shared Over that 3 or 4 year period.
Thanks very much, Ian, and thanks for your Kind comments. Look, I might take the one on I'll take the one on upfront on access pricing and then I might get David Burns to talk about the NBM impact on the enterprise market. And David can also talk a little bit to our partnerships with people like AWS and Microsoft is a bit of an indication as to those commercial arrangements. But I think your Part of your bigger point there is, again, you're spot on. I mean, I think historically, the telcos have obviously done a lot of the heavy lifting in investing the capital Create a platform to enable the digital economy, but they've been less effective than really capturing the value that that's Creative and it's more been sort of over the top players and services that have captured that.
And I think I mean David will comment more specifically about A couple of those partnerships, but what I would say is that and this is to be honest, it's something I've been saying since Advocating what we've been endeavoring to do since I became the CEO is that we've got to build these new capabilities in new areas in software engineering and Data analytics, and we've got to be better at how we architect our network. You'll see we talked a bit about how we're going to move 90% of our workloads to the cloud, but also Having an API led architecture, that's really important for monetization. It all gets a bit techie and we'll go into a bit more detail on it When we get to the Investor Day in November, but they are really important points of enabling monetization. I think the other thing, as I said in that, By integrating more software capability into how we manage the network, we're actually much more able to dynamically manage The different parts of network functionality, so things like capacity, speed and latency, resiliency and security, historically, those things were sort of Set and forget upfront and in a service, whereas if we can dynamically manage them, that enables us to Improve how we are able to monetize.
And the other piece of it is the pivot towards focusing on industry solutions. But I'll let David I'll talk more about that as well. I mean, I think the simple point on NBN excess pricing to me has been really just the impact on Customers and consumers, which was I've always maintained a position, either 1 or 2 things is going to happen Have to happen either retail prices are going to have to go up or wholesale prices are going to be going to come down. And I think now is the right time To look at that wholesale pricing model, the NBN is now fully rolled out. You'll see that a building block model has been Look forward, that is the right way to look at it.
And I think that's pointing towards NBN wholesale prices closer to the sorts of Numbers that I've been advocating for in the past, but our strategic plan and our financial trajectory is not Dependent on that, we've got to get to our mid teens EBITDA margin without depending on Wholesale price reductions, and that's endeavoring what we're going to do. I won't say it's easy. It's a pretty ambitious target, but It's not predicated on those wholesale prices. But with that said, I'll hand over to David just to maybe talk about NBN in the enterprise market and some of those partnerships that we have.
Thanks, Andy. I made a comment In my content that the fixed market is being highly disrupted and the NBN allows many, many Others to enter into the marketplace. And so that's how we've responded is both to Make our Telstra fiber offerings more adaptive and flexible, I'll come back to that in a moment, but also partner with NBN where we don't have fiber. That's consistent with many of us in the industry where we don't have fiber and NBN do good capital management. We're going to partner with NBN, And that's something that we've engaged in very strongly over the last half a year or so And being very successful with those range of offerings.
So I mentioned Adaptive Networks was our Our product offering and where we've separated, if you like, the connectivity in the access layer and what that Enables us to do is to provide variability in product options for our customers and volume options, meaning they can move up and down in Capacity, something that no one else does in the marketplace. And where there's also Ethernet options, Ethernet requirements, I should say, from our customers, that's both Telstra, where available, and NBN, we're not available, Offerings that we provide. So the NBN offerings are very quite formally and structured part of our adaptive Network offering suite, which we provide to customers and embrace that where it's needed. And also, if it's about resiliency and customers want alternative suppliers, which some customers do. The Telstra network is highly resilient, But some customers just like a second network provider in amongst that.
NBN continue to challenge in that marketplace. Only about recently, they reduced their prices, which is going to have an impact on all of us and we'll continue to both challenge where we have fiber and partner where we don't. And I think that will continue for the next 12 to 18 months, which is why I made the comment that I think the market will further disrupt And we'll be very active in amongst that, and I think we're well positioned to get ourselves back into that growth space. Let me turn to the second question, Which is partnering with the hyperscalers. If you're going to partner with the hyperscalers, it's a big in by both parties, ourselves and In our instance, with all of the major hyperscalers, but in particular with AWS and with Azure, I now have hundreds of fully trained technicians in all aspects of the Amazon AWS product And the Microsoft Azure product, it's quite formally structured in how we seek and look for go to market Opportunities together and a huge differentiator for Telstra and for me is Purple because that enables me to have the volume of resources, The volume of talent and the partnerships to those key hyperscalers that others will struggle to meet in scale and depth.
And so we're significantly in on those relationships, the highest level of commitment We make to them and they make to us in their partnership strategies. And then on top of that, for example, with AWS, We partner with Nikos and the network group about how we can explore cloud at the edge on Telstra's network in a differentiated manner. So That's it's a very significant relationship and commitment for both sides, and we're in for It enables greater areas of opportunity for us. So it's not only the return That the partnering with the hyperscalers give us, but it's actually the ancillary services and the ancillary products and offerings that we get To provide, very few of our customers have a one cloud environment. They usually have a multi cloud environment.
And so how can we help them manage that multi cloud across Our network and be able to switch between those cloud providers and help from a cloud management area as well as meeting our Customers, business needs and opportunities. So huge commitment from both of us and very excited about what it can bring. Let me pause there and give I hand you back to Nathan.
Thanks, David. Our next question is from Fraser McLeish from MST.
Great. Thanks. Just a quick one for me. Just on that plan to double your metro Sales sites by FY 'twenty five, is that aimed at home wireless or is that what you need to do just for mobility? And also is where will the CapEx fall for that?
Will that be done by Amplitel or was that going to be
Thanks very much, Fraser. The way telecommunications sort of topography works is that when you put up a macro cell, which is obviously a main tower, You create coverage across a broader area, notwithstanding the fact that you've got coverage over the broader area. The coverage within that area It's not all consistent because you've got different topography and different impacts from buildings and from Boliogen from various different aspects that are going on within that area and also you get different usage within that area. That situation is increased, as you can imagine, in metro more than in regional because Macro area might cover several square kilometers of coverage, but actually within several square kilometers of coverage, you've got very different dynamics Going on, so what we do is we use small cells to infill those various different Parts of that overall coverage to increase capacity and increase density to basically really just Super boost up the overall network performance. So it could support more people using a fixed wireless Solution, but it's not primarily focused on that.
It's actually primarily focused on building capacity and density within the network. So not only have you got Coverage, but you've got really good speeds and performance as well. As far as the CapEx that His concern to it, it is implicit in the CapEx sort of guidance or outlook that we've provided In Vicki's presentation, in terms of how we execute on small cells, I might pass over to Brendan and he can tell you just how that Works because the thing about small cells is sometimes they come with their own structure and sometimes they don't. But Brendan?
Yes. Thanks very much, Andy. So we work collaboratively with and others in the industry on small cells. And so typically, there's a lot of long range planning on the topology that's required. And then We'll work to identify the site and the location, get the passive dimensions of all of that infrastructure prepared, And then that enables Telstra to deploy the actors.
So essentially, that's how we'll work the small cell side. In relation to the existing infrastructure, there's obviously already a lot out there. We have a lot of poles. So we have a very, very big portfolio of poles. And There will also be a set of existing sites where Telstra can very, very quickly deploy small cells.
So It works very, very similar to how we would work in macro, but would expect there's probably going to be A little bit more leverage of the existing infrastructure and poles that we have, which is pretty sophisticated. Thanks. I'll pass back to Nathan.
Thanks, Brendan. Our next question is from Brian Han from Morningstar.
Thanks. On capital management, you said Telstra will preserve discretion To go outside those financial criteria that you mentioned for doing M and A, would it be Too cynical to think that anything acquisition may be justified as strategic, so that those criteria don't really mean much In practice? And my second question is, can you please remind me how long does the peak and trough In industry CapEx cycle last for telcos, and do you think 5 gs will shorten or lengthen that The current trough CapEx cycle. Thanks.
Thanks very much, Brian. Whether it would be too cynical to assume that anything could be strategic would depend on how cynical you are, I guess. But look, No, I mean, hopefully, we're trying to be very accountable here. And I think one of the things that we have Demonstrate it is we are pretty disciplined when it comes to capital management, pretty disciplined I think when it comes to running the overall business. And I think By putting a lot of metrics out there, I mean candidly, I think we put out more metrics, more frameworks, more Aspirations, more targets than probably any other major listed company in Australia.
And frankly, right now, I think That's a good thing because, I think we do need to provide clarity of direction, particularly at a time when I know there's a lot of uncertainty around us because Of COVID and we've seen certain companies have sort of therefore shied away And perhaps been a little bit more conservative in terms of their outlook, we've actually decided to go the other way, which is known to be bold. We want to be clear what our strategy is. Want to be clear what our ambitions are. As I said when I was commenting earlier, we've got a very detailed score there scorecard there. I suspect like T22, we will not hit every metric 100%.
I'm sure we won't, but overwhelmingly, if we hit the majority of them as we have in T22 where we've now at least 80% of them, We will have transformed the company again. But look, on the capital management framework, we're trying to again demonstrate and hold ourselves accountable And show you what those M and A criteria are. And to be frank, Medical Director was one that we did recently, which didn't quite meet those M and I criteria. It's more of a timing issue Then an absolute issue, but they didn't. But that is, as I've referenced previously, a strategically very important asset For, I think, reasons that can be pretty obvious, if what we're trying to do is to create a digitally enabled health system by connecting the various different parts of it and you think about What sits at the very heart of that is the GP.
And what does the GP use? The GP uses their practice management system. So Getting hold of that asset for a very significant proportion of the market is clearly very important. And so That was a very good strategic rationale to do it. And but I would expect us not to You should use that sort of, if you like, discretionary exemption, particularly often.
It's more just that We do need to give ourselves the room to be able to do so if assets come up like that, that are really strategically important. But otherwise, we will Very much holding ourselves to account as indeed, and Vicki can confirm this on I think pretty much all acquisitions we've done over the last few years have met our Requirements and our benchmarks. In terms of the peaks and troughs of telco by So network CapEx, I mean competitively the dynamic has obviously been that People tend to invest more CapEx at the beginning of the rollout cycle of the Gs. The Gs have tended to Follow-up sort of an 8 to 10 year pattern. So we first started rolling out 4 gs in 2011, 5 gs in 2019, 3 gs was in the mid-2000s.
And of course, obviously, the spectrum investments tend to come At the beginning of those periods as well because often you're moving to a new it's coming on a new spectrum band as well. I think as we move forward To a world where we've got much more software enabled networks, where the hardware and the software is becoming Separated, for example, the 4 gs equipment that we're putting in now is software upgradable to 5 gs. That's actually going to make quite a bit of difference in terms of both the long term CapEx efficiency, but also the cyclicality. So I think we'll be able to move to a world where you're not suddenly ripping out lots of equipment or rather having to roll out lots of new equipment To upgrade to a new G, you're actually software upgrading that new G using existing antennas and Existing infrastructure as well. But I mean typically, the cycle has followed that sort of 8 to 10 year cycle, I think, has been the history of it.
But as we move to a more Software enabled networks, I think that's going to ultimately sort of balance or equalize out. I'm not saying the overall CapEx is going to go down, But I suspect it will smooth out more over the longer term.
Thanks, Andy. We're now going to have our last Investor and Analyst question, after which we will move to media Q and A. So if you're media on the line and you'd like to ask a question, please press star 1 to register a question. So our last investor analyst and analyst question comes from Rod Sleeth from Remo Equity Research. Go ahead, Rod.
Hi, guys. Thanks very much for taking my questions and for managing to get me in. I've got a couple of questions. First of all, I guess I'd just like to come back to the mid digit mobile revenue growth. And I understand that there's A number of levers in there, including, let's say, relatively new products such as The wireless broadband and continuing growth in IoT, revenue coming back from roaming, etcetera.
But I'm just curious within that, are you do you believe you would be able to make that sort of mid single digit target Without ARPU increases on the consumer portion Of your business. So it certainly seems to me that there's a lot of potential for growth in the enterprise from 5 gs. But I'm just wondering if we can still continue to see this step up in ARPU that you've described recently As a result of people wanting to adopt 5 gs when there doesn't really seem to be a lot of additional functionality that they're getting for a consumer, For Retail
Consumer. Hello?
Michael, do you want to take that?
So absolutely to get mid single digit revenue growth in mobile, we are And we are relying on ARPU growth in the consumer business as well as all of those other things you described. We're expecting that Growth, I think, to be not the kind of step change we've seen in the last little while, but we do believe That there will be an opportunity to differentiate on experiences and to differentiate on the kind of experiences that people will Be willing to pay for. And as I said, what we've seen over the last 5 or 6 years as ARPUs have come down by at least that amount over the last 5 or 6 years As data inclusions have increased, we've pulled everyone into those into the mid tiers. So with things like being able to optimize around A work from anywhere mobile experience that optimizes the experience we're having right now on your mobile to optimizing for gaming, to optimizing for streaming, To prioritizing your use so that when you're in a congested area, you get some priority. So I think those use cases are still to come.
Speed is absolutely one thing and 5 gs is delivering a speed now, but the opportunities that 5 gs can deliver in terms of our ability, as Andy said, to deliver a software optimized experience. We do believe can get some That structure back into the plant tiers across the market and lift ARPU.
Okay, great. Thanks. Can I just ask on the wireless broadband, obviously, TPG and Optus have been talking about that Somewhat more so than what you have? But I'm just curious, I was looking back at the 2011 Press release with regards to the original NBN agreement. And are you relatively more constrained Then your competitors in terms of promoting fixed wireless as a result of that agreement with NBN at the time?
There's a couple of ways to think about this, Rod. I have always maintained that what we need to be guided by is some best interest in customers. And whilst fixed wireless, including using 5 gs, is definitely a technology that's going to Good for some customers in certain circumstances as an alternative to the NBN. It's not necessarily the right technology in all circumstances, particularly if a customer has got a fiber to the home service or a maybe an HFC service. And so what's Important first and foremost is the customers get sold the right technology for their circumstances.
There are certain customers clearly that Maybe they've got an old copper line service or a fiber to the node and maybe they're struggling to get speeds where a fixed wireless solution It's a great potential alternative. And so therefore, our approach has been to identify and Engage with those customers. Now as a separate matter to your point, When we went through all of the NBN agreements, there are certain contractual aspects That mean that if we were to effectively compete in mobile against the NBN, And that could have implications if it were material. Now at the sorts of levels we're talking about, I don't think it's Particularly material and as I said, providing is what's in the best interest of customers, that is what I think is going to be the determining factor. And I think I've always been consistent In saying that maybe 10% to 15% of customers in Australia may be serviceable using a fixed wireless solution.
By the way, NBN already services 5% of the population using fixed wireless. People somehow seem to miss that point. But In the last 8%, NBN is servicing 5% of customers using fixed wireless and 3% using satellite. And the fixed wireless technology is exactly the same fixed wireless technology that the operators are looking to use. I mean, it's In a sense, conceptually, it's the same technology it's using that's using 4 gs and it will obviously be upgraded to 5 gs.
But look, there is a proportion of the population For which the technology is a very viable alternative, but I think it would be misleading And wrong to assume that a very significant proportion of customers are going to move to fixed wireless, and I think it would be the wrong thing to do. Other thing as well, of course, is that NBN will continue to upgrade its network. And so as you saw last year In their plans and budgets and updates, the government announced a $4,500,000,000 Additional investment sorry, to support NVMe of $4,500,000,000 additional investment of which at least $1,500,000,000 is going into Upgrading fiber to the node, fiber to the curb and capacity and speeds, etcetera. So it's also not a static environment.
Thank you, Andy, and thank you to all the analysts for their questions. I'll now hand over to Nicole McKechnie, who will moderate the media Q and A.
Thanks very much, Nathan. We've got a couple of questions today. I think it should be a reasonably short one, but So the first one is from Zoe Samios. Zoe, over to you.
Thanks, Nick. Hi, everyone. Thank you the presentation today, just 2 from me. With the $500,000,000 cost cuts over the next Few years, is that going to impact on jobs? And if so, is there a ballpark figure of how many jobs that will affect?
And just secondly, on Digicel, I know you mentioned it briefly before, Andy. But if that transaction does go ahead, how does that fit into The T25 strategy.
Yes. Thanks very much, Zoe. On the first one, the $500,000,000 one of the things I've said to the teams today was, of course, That headcount reduction was quite a significant feature of our T22 project and our T22 program rather. And I make the point today with our teams, it is not a feature of our T25 strategy. In terms of the Job reductions for T22 were essentially done on those.
And so we don't expect to see material changes to Our headcount and significant job reductions going forward. I make the caveat, however, having said that, that obviously we're a very large complex company. We're constantly changing. Customer needs are constantly evolving. Customers are adopting digital ways of working.
So there will be organizational changes, and that will impact Roles going forward, but there's not a sort of a wholesale or a big headcount reduction as part of T22. And I'll get Vicky to talk about where some of those cost reductions perhaps come from so that we'll sort of give that a bit of color. On Digicel, If we were to proceed with that transaction, a couple of points to make is, firstly, it's not included in any of the financial ambitions or the guidance That we have provided so far. And then secondly, as you know, we're going through the process of restructuring Telstra into a new contemporary Structure, and that will create 4 subsidiaries, InfraCo Fixed, InfraCo Towers or Amplotel, Servco and Telstra International, and were we to acquire it, we would effectively operate it and run it under our international business Relatively independently to the other parts of the business as well. So that's the How we would do that.
But Vicki, on the cost out, things you want to just maybe comment with a bit of color on where that comes from?
Absolutely. Thanks, Andy, and thanks, Zoe, for the question. The thing I would focus on in that cost out, the biggest driver of it is really leveraging the benefits Of the digitization program that we've been running under T22, so components there include reduction in our IT costs As we decommission legacy systems and consolidate platforms and really the efficiency that drives back of house in our business. So that would be the key thing I'd flag, Andy.
Thanks, Vicki.
Thank you.
Thanks very much, Vicki. Appreciate it. Thanks, Zoe. And the next question comes from Lucas Fair from the AFR. Hi, Lucas.
Hi, guys. Can you hear me okay?
Yes. Go for it.
Yes, yes, cool. Andy, I was just wondering given that this strategy goes out to 2025 now, I'm assuming Your plan is to stay with Telstra all the way till the end of the end of T25. I'm wondering also when we get To the end of the FY 'twenty five, whether that's where you sort of call it curtains and sort of see your time with Telstra ending? And then just another thing on the disruption to the scheme folks about splitting into the 4 pronged Structure, does that impact anything around the time lines for the monetization of InfraCo 6?
Yes. Thanks very much, Lucas. On the first one, I mean, I obviously understand why there's speculation around my plans at a time when we're Announcing a new strategy. But look, what I would say is we're here today to talk about T25. T25 has been a collective effort.
There's a whole team involved in creating it and the whole team will be involved in leading it, just as much as they were on T22, Involved in creating T22 and leading T22, but candidly, I'm as excited to be part of this next strategy as I was as part of the previous strategy. So That's really my comments in relation to the first point. On the second point, I think I sort of Alluded to this in a previous question with one of the analysts. Look, the establishment of InfraCo as a separate business standalone business unit and now putting it in place With a corporate restructure is a nontrivial exercise. It's an enormous amount of work involved.
This is Basically creating 4 subsidiaries under a holding company. You heard me today reference the fact that the government is, in fact, The process of developing legislation which will be introduced into parliament soon That actually seeks to ensure that the legislation that currently applies to Telstra Corporation equivalently applies to the The new structure, and so all of that needs to be put in place. We are incredibly well progressed on that. If you take into account The complexity and the scale of what's involved, and we always said going all the way back to when we launched T22 that To the extent that we would consider any monetization options, that would be after we've effectively completed T22, once the NBN is fully rolled out. So nothing has changed in all of those plans.
And the timing has not been affected and we're not behind where we need to be. I did say earlier that We thought we'd do the scheme meeting this year. I think as it transpires, it's probably going to be early next year just because of the impact of getting all of those Approvals and processes and stuff in place, particularly in the context of COVID as well, which hasn't necessarily Well, rather, has had its impacts as well just in terms of when parliament meets and all sorts of other things. So, no, look, I think we're in good place. What we said we would do We would set up InfraCo as a standalone separate business unit to give us optionality and to drive performance and growth in as part of T22, and that's exactly What we will have done.
So yes, that would be my comments. So thank you, Lucas.
Great. Thanks, Lucas. Okay. We do not have any other questions for today, so we might call it a day there. Thank you very much, everyone, for