Telstra launches new holding company, subsidiaries as restructuring moves forward

Telstra is moving ahead with its planned restructure with the launch of a new holding company and the creation of subsidiaries to house each new business unit.

The telco late last year announced it would split into three separate businesses as part of its ongoing T22 strategy, namely InfraCo Fixed and InfraCo Towers for its physical infrastructure and ServeCo for the customer-facing side.

The three new units are now officially separate subsidiaries, with the existing Telstra Corporation to be renamed InfraCo Fixed, while the relevant assets will be transferred to InfraCo Towers and ServeCo.

Telstra also established a fourth subsidiary, Telstra International, which includes its international business and subsea cables.

The telco said shareholders will own shares in the new holding company on a like-for-like basis with no change to ownership levels.

Telstra chairman John Mullen said “realising more value” from Telstra’s infrastructure assets was one of the “fundamental pillars” of the company’s T22 strategy.

“Even before the COVID pandemic reminded us of the enormous importance of telecommunications infrastructure globally, we could see the opportunity to provide transparency of our assets and opportunities to deliver additional value for shareholders,” Mullen said.

“The legal restructure is a step toward that outcome. It also reflects the new post-COVID world we are living in and the fact that our assets are a critical part of the infrastructure that is enabling the nation’s rapidly growing digital economy.”

Chief executive Andrew Penn said the new legal structure would be an important milestone in Telstra’s T22 strategy and came at “a significant inflection point” in the company’s history.

“We started setting up InfraCo almost three years ago and what has happened since has only reinforced the importance of the strategic decisions we made at the time,” Penn said.

“The end of the impact of the NBN rollout on our financials is within sight, and the COVID-19 pandemic has demonstrated the critical importance and value of telecommunications infrastructure to the world.

“The new structure has been chosen as it delivers a modern, optimal long-term portfolio structure for the Telstra group of businesses, which will maximise flexibility and value realisation of our assets, and deliver optimal outcomes for the Telstra Group as a whole.”

Penn added that Telstra’s “proposed monetisation” of InfraCo Towers remains on track.

“As previously communicated, we plan to commence the process for external strategic investment into InfraCo Towers early in FY22, with binding offers to be submitted in the second quarter of FY22,” Penn added.