The wealth flowed to tech giants, not the company that built the pipes
At the crossroads of a technology revolution, Telstra's chief executive Vicki Brady arrives in Barcelona carrying more than a conference agenda — she carries the weight of an industry that built the roads but watched others collect the tolls. After decades of massive network investment that enriched platform giants while leaving telecom operators behind, Brady is staking Telstra's future on artificial intelligence as the mechanism by which the company might finally capture a fair share of the value it helps create. The question she brings to Mobile World Congress is not whether AI matters, but whether a telco can learn, in time, to matter within it.
- Telstra has spent decades funding the infrastructure of the digital economy while shareholders watched the rewards flow to Silicon Valley instead — a structural injustice Brady is now determined to correct.
- The company's enterprise division underperformed in its last reporting period, adding urgency to the search for a credible growth strategy before investor patience runs thin.
- Brady has identified three distinct AI levers — internal productivity, data centre infrastructure, and enterprise partnerships with Microsoft and Quantium — each representing a different bet on where value will accumulate.
- Barcelona will flood her with more ideas than Telstra can possibly execute, and the real discipline will be in knowing which opportunities to abandon before they become distractions.
- The trajectory is cautiously optimistic: Telstra's return on capital finally exceeded its cost of capital, a milestone long overdue, suggesting the foundation for an AI-led turnaround may at last be solid enough to build on.
Vicki Brady is travelling to Barcelona's Mobile World Congress this week with a clear thesis: Telstra must become an AI-fuelled organisation, or risk repeating the mistakes of the last technology boom. Alongside Communications Minister Michelle Rowland and company directors, she'll navigate five days of conversation dominated by artificial intelligence — even as the official agenda covers network openness and technical milestones like Telstra's microwave project extending coverage to King Island.
Brady's ambition is grounded in a painful history. For decades, Telstra poured capital into the networks that made the modern internet possible, yet the wealth generated by that infrastructure flowed overwhelmingly to social media platforms and tech giants who built on top of it without bearing its costs. The depth of that failure was quietly acknowledged in Telstra's December results, when the company celebrated the fact that its return on capital employed had finally exceeded its cost of capital — a metric that should never have taken so long to achieve.
She sees three paths forward. The first is internal: using AI to sharpen network management, customer service, and operational efficiency, tapping into what McKinsey estimates could be $275 billion in global telecom productivity gains. The second is infrastructure — Telstra's $1.6 billion intercity fibre rollout positions the company as essential backbone for the data centres the AI boom demands. The third is enterprise: acting as a connector between business customers and AI tools through partnerships with Microsoft and Quantium, a strategy that will likely anchor any turnaround of Telstra's underperforming enterprise division.
The hardest part, Brady admits, will be choosing what not to pursue. Barcelona will return her home with more possibilities than Telstra can execute, and the discipline to resist distraction may matter as much as the ambition to lead. After years of searching for growth, having too many options is a problem she can live with — provided she picks the right ones before the window closes.
Vicki Brady is heading to Barcelona this week with a notebook and a thesis. As Telstra's chief executive, she'll walk the floor of Mobile World Congress—the telecom industry's annual gathering—alongside Communications Minister Michelle Rowland and other company directors, including Craig Dunn. The conversations will range across network openness and technical achievements, like Telstra's microwave technology project that recently strengthened mobile coverage to King Island. But everyone knows what will actually dominate the five days: artificial intelligence.
Brady has been explicit about her ambition to remake Telstra into what she calls an "AI-fuelled organisation." She wants the company to lead both in deploying AI within its own operations and in rolling out AI capabilities across Australia. It's tempting to dismiss this as corporate chasing of hype—the kind of bold repositioning that Telstra's predecessor, Andy Penn, attempted when he declared the company would become "a world-class technology company," a statement that took years to live down. But Brady's push is rooted in something harder and more concrete: the company's struggle to generate acceptable returns for shareholders.
For decades, Telstra has poured enormous capital into building and maintaining the networks that made the modern internet possible. The company invested trillions to support explosive growth in data and mobile services. Yet the wealth created by that growth flowed overwhelmingly to social media platforms and technology giants—companies that built on top of Telstra's infrastructure without bearing its costs. Telstra itself felt the sting acutely. In its December results, the company celebrated a milestone that should have been routine: its return on capital employed finally exceeded its cost of capital. That it took so long to achieve this basic metric reveals the depth of the problem.
Brady sees three distinct ways AI can help Telstra reclaim value. The first is internal: deploying AI to improve network management, customer service, and operational productivity. McKinsey estimates the global telecom sector could realize up to $275 billion in productivity gains from AI, with another $100 billion possible from new use cases. The second is infrastructure. Telstra's $1.6 billion intercity fibre rollout, and similar projects, will become essential as data centres multiply to support the AI boom. The company can position itself as the backbone that AI depends on. The third is as a middleman for enterprise customers, connecting them to AI tools through partnerships with Microsoft and Quantium, the data company owned by Woolworths. Telstra's enterprise business disappointed in the last reporting period and is under strategic review; Brady will almost certainly make AI central to any turnaround plan.
The challenge, Brady acknowledges, is choosing what to pursue and what to leave alone. She'll return from Barcelona with more ideas than she can execute. The temptation to chase every opportunity will be real. "It's a choice now about what to do and what not to do, because you could get distracted, I think, into many things," she said. But after years of struggling to find growth, having too many possibilities is a problem Telstra can live with. The question now is whether Brady can pick the right ones early enough to matter.
Citações Notáveis
It's a choice now about what to do and what not to do, because you could get distracted into many things— Vicki Brady, Telstra CEO
There's been various points where there's been growth on our networks, but a lot of the value's being created over the top of it— Vicki Brady, on why telcos must capture AI value
A Conversa do Hearth Outra perspectiva sobre a história
Why does Telstra care so much about AI specifically? Isn't this just the latest tech trend?
It would be easy to think that, but the real issue is that Telstra built the pipes everyone uses and captured almost none of the value. Google, Meta, Microsoft—they all got rich on networks Telstra paid for. AI is a chance to be in the game itself, not just the infrastructure underneath.
So this is about catching up?
It's about not being left behind again. They've already missed the social media boom, the cloud boom. Each time, the telcos invested and others profited. AI feels different because data centres and networks are suddenly critical again—Telstra can't afford to fumble this one.
What does "AI-fuelled organisation" actually mean in practice?
It starts small: using AI to route calls faster, predict network failures, automate customer service. But it scales to selling AI services to enterprise customers, becoming the trusted middleman between companies and the tools they need.
Is there a risk she's overselling this?
Absolutely. Her predecessor tried to rebrand Telstra as a tech company and it didn't work. But Brady's advantage is that she's not claiming Telstra will become Google. She's saying Telstra will be the company that powers Google's data centres in Australia.
What happens if she picks the wrong projects?
Then Telstra spends billions on the wrong bets while competitors move faster. That's why she's being careful about prioritisation. But waiting too long is also dangerous—the window for being early in AI is closing fast.