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Telstra consolidates digital media business, invests $100M in media infrastructure

The telco has established a new digital media business division with Sensis, BigPond and Foxtel all rolled into one

Telstra has started up a new digital media division to consolidate its Sensis, BigPond and Foxtel units for greater clarity on how those businesses perform.

It will also invest $100 million to upgrade its media delivery infrastructure, namely in video distribution capabilities, over the next four years.

The news was announced by Telstra CEO, David Thodey, at the company's Investor Update event in Sydney.

With $4 billion in combined annual revenues and 4000 staff, it is still hard to grasp how the media assets deliver results for Telstra, according to Thodey.

The telco does have an eclectic mix of media businesses. Besides providing broadband services, the BigPond division deals with music downloads and is looking to ramp up its movies downloads segment.

So far, BigPond Movies carry 3300 film titles and 2.4 million movies have been downloaded by customers.

There is also Sensis, the advertising and directories arm of Telstra, which began its transition from print to digital this year. While the new digital product is not meeting revenue expectations, the telco stressed it is still the early phases of its transition.

Bundling all the digital assets into one division will provide more clarity and focus for the business, Thodey said.

"By putting product port together we will be able to really see how this media business will go in future but we have to go through the transition of Sensis," he said.

Telstra has recruited Rick Ellis to head up the digital media division.

Ellis' previous role is CEO of Television New Zealand and will join the telco in early 2012.

As for the $100 million media infrastructure investment, it will help enterprise and business customers deliver broadcast-quality video streaming services to their customers efficiently. Delivery of content to personal devices such as tablets and smartphones was a consideration.

"Our media strategy is around the network and how we build in differentiation to move it forward," Thodey said.

The new digital division also encompasses Trading Post, IPTV and other content arrangements.

Telstra Investor Update continues.


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