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Mullen hails 'world class' Telstra network

AAP logoAAP 10/10/2016 Lilly Vitorovich

Telstra chairman John Mullen has tried to reassure shareholders over the state of the company's networks after its reputation was damaged by seven outages this year.

Mr Mullen - who took over from Catherine Livingstone in April - told the company's annual general meeting in Sydney that Telstra infrastructure had been rated "world-class" by independent global experts despite the disruptions.

"There is nothing, I repeat, nothing, inherently wrong with Telstra's core networks," Mr Mullen said on Tuesday.

A raft of shareholders complained about Telstra's poor customer service, and a handful questioned the group's growth plans and lagging share price at the three-hour meeting.

Mr Mullen repeatedly assured shareholders that part of the $3 billion investment will go towards improving customer service by simplifying systems and products and removing legacy issues.

Telstra remains focused on extracting more out of its local operations, and expanding internationally, primarily in Asia, Mr Mullen said.

Telstra surprised investors in August when it announced an extra $3 billion upgrade to its stretched networks amid rising demand for data. That came on top of $250 million pledged in direct response to the outages, which were blamed on a series of problems.

Chief executive Andrew Penn said on Tuesday the $3 billion investment is critical given the growing reliance on smart devices and technologies, and will put the company in a strong position.

Telstra's network in Australia currently includes about 230,000 kilometres of optical fibre cabling, 170,000 routers and switches, more than 8,500 mobile network sites and 5,000-plus exchanges.

"Our network will be smart, adaptable and scalable," said Mr Penn, adding that network traffic would grow "enormously" over the next four years.

"Mobile video consumption has increased eight fold since 2011, with twice as many people now watching four times as much video on a mobile device."

Mr Mullen and Mr Penn also repeated their opposition to possible regulation of mobile roaming charges by the consumer watchdog, warning that it will hurt profits and network investment across regional Australia.

"Why would anyone invest in maintaining or upgrading their regional networks when they can hitch a ride on someone else's network and there is no longer any competitive differentiation from greater network coverage?" Mr Mullen said.

Mr Penn, who reaffirmed the company's 2016/17 guidance of mid to high single digit income growth and low to mid single digit earnings growth, took a shot at UK-based Vodafone, which has argued in favour of the Australian Competition and Consumer Commission inquiry.

"The principal advocate for mobile roaming is a foreign company that has chosen not to invest to the extent that Telstra has," Mr Penn said.

"A foreign company that is very capable of investing and a foreign company that has argued against roaming in other markets where it suits it do so."

Telstra shares closed two cents lower at $5.05 in a broadly flat Australian share market.

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