Telstra has revealed a major change to its network services pricing and plan structure. This is the biggest shift in the networking space in the past decade and a major strategic move by Telstra to disrupt the marketplace.
Introducing Telstra 'Adaptive Networks'
Adaptive Networks is a complete change to how Telstra constructs, manages and prices network services.
It sees the end of inflexible two or three year contracts, and an 'unbundling' of network services, in a strategic shift to the way Telstra offers network services to the market.
"Right now today, we have a very fixed and arguably inflexible IPVPN and MPLS services in connectivity that are effectively bundled for our enterprise customers.
"What we're effectively doing is we're unbundling our services to give our customers choice, flexibility, much more simplified pricing, and amazingly, no lock-in contracts for most of our services."
Michael Ebeid, Telstra Enterprise Group Executive
The importance of having flexibility and scalability in the network space has been highlighted by the accelerated digital disruption triggered by the pandemic.
“Adaptive Networks enables us to lay out a menu of connectivity options for our customers to pick and choose from, with the ability to easily change or scale those solutions up or down.
That gives them the flexibility to pivot to meet challenges head-on, such as the mass move to remote working we saw earlier this year. This is a significant change to today’s environment of bundled, less flexible solutions.”
No more lock-in contracts or contract renewal conversations
Telstra has taken the lead in the marketplace being the first carrier to offer:
- Month-to-month network services
- No lock-in contracts
- Unbundled access and services
- Simplified 'flat-rate' pricing construct
- A future-proofed price guarantee
It’s hard to know what the landscape will look like in three months, let alone in three years. Telstra has removed the contract renewal element from discussions with its users, says Sanjay Nayak, Group Executive for global connectivity and platforms.
"The rationale for us was over the last two years what we have seen is a significant shift in how customers are consuming applications, and a lot of these applications are sitting in the cloud.
"The conversations that we were having with our customers were focused on not just about how do we move applications to the cloud ... but a fair chunk of the conversations were on renewals.
"And we felt 'what's the point of that renewal conversation?' Either a customer is happy with us or they're not happy with us."
Adaptive Networks reduces costs by 20-40 percent
The unbundling of network access and network connectivity under Adaptive Networks typically delivers a 20-40% saving on existing Telstra network costs.
The new pricing will make Telstra more competitive when bidding against NBN and other fixed infrastructure RSP.
Three phases of network strategy revealed
The Adaptive Networks will incorporate three phases of change with this first phase known as Adaptive Connectivity and two more phases to come.
- Adaptive Connectivity: Flexible month-to-month, no-lock-in contracts with a choice of network and connectivity options, allowing customers to adapt their technology at speed as their needs change.
- Adaptive SD-WAN: Investment in Software-Defined Wide Area Network (SD-WAN) capabilities to help customers harness the potential of hybrid networking, and smart integration of 4G and 5G with fixed networks.
- Adaptive Core Networks: Investment in Telstra’s core networks, including expansion of Telstra’s flagship Next IP fibre network, Telstra Programmable Network, NBN connectivity and 5G to enable a move toward API-based flexible IT infrastructure.
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