Telstra wades into electricity retail battle

The Australian operator is diversifying beyond telecom into the hotly contested energy market.

Robert Clark, Contributing Editor, Special to Light Reading

December 10, 2021

3 Min Read
Telstra wades into electricity retail battle

Diversification has become the name of the game for telcos seeking to break out of the high-cost low-growth spiral of the last decade.

5G might be a game-changer but quite probably will not be sufficient on its own.

That's why many Asian telcos have grown side hustles in areas like ecommerce, media and payments. For example, a fifth of SK Telecom's Q3 operating income derived from non-mobile business, while Taiwan Mobile's online mall contributed 14% of EBITDA.

In Australia, Telstra is taking the plunge into the big and hotly-contested market of energy retail.

Telstra Energy – which is part of Telstra's new markets group along with its health unit – was granted a retail licence from the national regulator last month.

It's not the first telco to enter the energy business. Japan's KDDI has 3 million customers for its electricity retail business and has just started selling 100% renewable power. Smaller Australian telcos including Aussie Broadband and Vocus are already in the market.

But Telstra's pivot to energy is a big deal because, first, it's the 13th-biggest company and the second-biggest brand in the country, and second because it's not the only heavyweight hoping to shake up the market.

Oil giants Shell and Ampol are also taking aim at electricity retail, both realizing that the shift to electric cars will render their service station chains irrelevant.

"This will be a war between enormous companies the like of which we have not seen before," one local business writer predicted. "It will be based on price, data and marketing because the product is a standard commodity. There will be casualties."

Want to know more about 5G? Check out our dedicated 5G content channel here on Light Reading.

Telstra's advantage is its deep channels and huge installed base and its experience, in contrast to the incumbents, in selling differentiated services. Its strategy is to be the integrated provider of broadband, media and tech services for the home.

"We want to be there to set up, optimize and manage all the tech in your home," CEO Andy Penn said in an investors' day presentation. "Energy and smart energy management will form part of this integrated proposition and we believe will help us be a top five energy retailer in Australia."

He said Telstra already had "quite a bit of technology in customers' homes," such as smart modems and diagnostics kits, providing "interesting opportunities to help customers better manage their energy and give them better transparency of how they're utilizing energy."

Penn said with about 7% of Telstra's customers move every year, providing "a significant trigger" to switch energy providers.

Telstra would also leverage its leadership position in cutting carbon emissions and using renewable energy, Penn said. The company aims to reduce carbon emissions by 50% by 2030 and to enable renewable energy generation equivalent to 100% of consumption by 2025.

It will sell its energy services internally before launching them on the wider public, most likely in the new financial year in July.

— Robert Clark, contributing editor, special to Light Reading

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About the Author(s)

Robert Clark

Contributing Editor, Special to Light Reading

Robert Clark is an independent technology editor and researcher based in Hong Kong. In addition to contributing to Light Reading, he also has his own blog,  Electric Speech ( 

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