ROSE, Ms Niki, Workforce Experience and Capability Executive, Telstra STEVENS, Ms Dayle, Artificial Intelligence Executive, Telstra WORRALL, Mr Steven, Chief Executive Officer, Telstra Digital Infrastructure [16:21] CHAIR: I now welcome representatives from Telstra. I understand that information has been provided to you regarding parliamentary privilege and the protection of witnesses giving evidence to our inquiry. I'd now like to invite you to make a short opening statement, at the conclusion of which we will get underway with our questions. Ms Stevens : Thank you, Chair, and thank you to the committee for the opportunity to appear today. We have provided a detailed written statement, so I'll be brief. We want to make ourselves as helpful as we can to the committee. Telstra approaches AI as both an enabler and a major user. We build critical digital infrastructure, we're deploying AI across our own operations, we're helping thousands of employees adapt to new ways of working, and we're investing heavily in responsible AI governance. From that experience, our core message is that Australia's AI future depends on four things: working together, trusted infrastructure, skilled and confident workforces, responsible governance and broad community participation in the benefits of AI creates. Between myself, Niki and Steven, we're pleased to share our practical experience in each of these areas and hope that that perspective can be useful to the committee's work. Thank you, Chair. We will look forward to your questions. CHAIR: Wonderful. Thank you, Ms Stevens, and I appreciate you making yourself available today. As you say in your opening remarks, Telstra has got that unique capacity. Part of that is infrastructure, and part of that is connectivity in particular; it's also a user of AI and a business. I have a couple of questions with regard to the importance of fibre connectivity and how that is critical for these data centres that will be needed, the infrastructure to support AI and AI adaptability across the economy. Can you talk us through what your predictions may be for Australia's connectivity requirements and where the challenges might be in upgrading existing or deploying new networks? I'm also particularly interested to hear further about the extent to which there are opportunities here as we start to see these data centres, not just in the metro or industrial areas close to cities but also in the regions, and what the opportunities might be there for those communities. Mr Steven Worrall, this is for you. Mr Worrall : Yes, I think that might be for me, so let me take that question. In your question, I think you said 'predict'. Was that the phrase in the first question about where we see connectivity going? CHAIR: So we can see where the requirements will be. Have you mapped this out already, or is there a sense of where it will be? Mr Worrall : I think the first thing to say, Chair and to the committee, again, thank you for the opportunity to connect today. I think there are a couple of thoughts on my mind. The first would be that the environment is changing so fast. Today, as you probably already heard through the other submissions, the country has about 1.6 gigawatts of data centre capacity across the country, and there are predictions that could be three gigawatts in FY 30 all the way up to high single digits. As a result, given the nature of the market, and the fact that things are changing very rapidly, it's hard to be precise in terms of predictions. But no question, as we look at the supply chain and if I could take you to this thought for a moment, the global digital supply chain for the provision of AI services starts with energy and ends with an AI service being delivered. Of course, as we think about data centres in the country, and then we think about connectivity, which is crucial to ensure that those data centres can connect with each other and, of course, connect with data centres offshore through the subsea network, there are a number of factors that need to be considered as you start to think about where this might end up. I think for us at Telstra, we're being very thoughtful about how we play our role. We play an important role today, as I know the committee will be aware, in protecting Australia's interests today through our Clean Pipes initiative. In fact, we're on the front line of cyber and fraud prevention today, so, as we think about that role and we think about where the AI landscape is continuing to emerge, we're looking at how we can best play our role in provisioning the connectivity that will be necessary, including most recently, the Aura Network, which I'm sure we might get to a bit later in this conversation. I might pause there, Chair, just to see if that helps with your question. CHAIR: Thank you, it does. I wouldn't mind though, talking through some of the potential opportunities that you see with regards to the infrastructure required. Obviously, not just that we've got the data centres, but, in particular, the role that you play around the connectivity functionality. Is there something you can talk to, or present about the benefits for not just our metro and outer metro areas across the country but also our regions? Mr Worrall : I'd be happy to. Let me quickly start with an acknowledgement of where we are today. Telstra operates about 250,000 kilometres of fibre terrestrially in the country, which is the digital backbone of the nation today. As an aside, we also own or operate about 400,000 kilometres of subsea cable, which connects Australia to the global supply chain that I've referenced. Now to your question about regions and CBD. Obviously today, a lot of the data centres that we see in operation and those planning approvals that are in process, many of those are in the CBD. Our thinking, and I know this is matched with a lot of the thinking going on in government and in different circles is that, of course, we have the opportunity as a nation to think about diversification as we look at other aspects of that supply chain, as I've mentioned. The supply of energy, for argument's sake, is one of the key inputs for data centre approvals, and that's why we're seeing some significant development applications coming in in Northern Australia. We think our role as Telstra—and this is where it intersects with the Aura Network—is to ensure that all Australians can participate in this digital economy. That's why the network we're building connects all of the capital cities but also offers 30 on-off ramps in regional centres around the country to ensure that every Australian can participate and can connect with this new AI network that we're building. CHAIR: Thanks. Just a question on Telstra as an employer and the learnings or the experience that you've had adopting AI in your own workplace. Are you able to talk through some of the ways that it's worked, some of the lessons learnt, how it's playing out for you guys as an employer. Ms Stevens : Let me start first and talk about how we have looked at adopting AI, and then I'll pass to Niki to talk about it more from an employer and workforce perspective. In our adoption of AI, we started with really looking at what the foundations are, and what are the things that you need to get right as a large organisation and tried not to be carried away with all of the exciting little use cases that are out there and ideas that people have but really think about how we make this work for a large organisation. That has meant really focusing first on our data. Where is our data? Are we protecting our data? Is it accessible to the right people and the right places? It has meant really thinking about privacy and getting our data in order in terms of data quality and privacy protection but then making sure that it's ready for AI at the same time, because it's a slightly different game from just having good data quality and good data protection. So it is about really looking at our data estate first and then, second, looking at our underlying AI capabilities so that we weren't building out a different solution for every AI idea people had but were really looking at how we would make this reusable, repeatable and resilient so that, when we were scaling, we would be able to govern it and maintain its resilience as well. Third, it is about really looking at responsible AI practices. It is relatively easy to govern a small number of things. It gets harder when you scale it. So how were we going to set ourselves up for taking the Australian government's AI Ethics Principles and turning that into policy and operational controls, but then making that work at scale across everything we were looking at? Lastly, it is about our people—so how we were preparing our people to be able to use AI in their work and think about how AI might help them in their work and in the way they talk to customers or make our network more resilient. It meant that it couldn't just be the data and AI professionals that were thinking about AI. It needed to be the whole organisation as they brought it into their work. So across the board—the data ecosystem, our AI capabilities, responsible AI and governance, and then our people's capabilities—is how we've thought about it. From the start, we have been thinking about scaling it, not just each individual idea. I might just pass to Niki to think about how we've brought our workforce on the journey as well. Ms Rose : Thank you, Dayle. I would cover probably three key points around how we brought our employees along with us. First off, we consulted with our people and with the unions around those initial decisions to introduce significant new technology or the AI tools. For instance, when we introduced Copilot, we consulted with our employees and unions before doing that, and then we really focused on the training and the upskilling. We have a data and AI academy, with path-specific pathways for different personas. But, before you could use Copilot or get a Copilot licence, you had to complete two courses. One was around the responsible AI, and the other was around Copilot and how it's used. From that, we've really focused on making sure we're starting to build AI fluency across our organisation so that our key people know what it is, when to use it, when not to use it and how to provide certifications through that. But we also have a focus on the human and AI skills—the skills like judgement and critical thinking, which are uniquely human but actually essential to making any usage of the AI effective. The third element that we've really focused on is the leader role, because what we have found around adoption, comfort and usefulness is that the leader plays an enormous role. If the leader uses AI then their staff and their teams are more likely to. It is the same from a learning approach as well. So we've seen leaders and leadership as a really key leverage point around that usage. CHAIR: Excellent. Expanding on where we are at the moment, this inquiry is looking at a range of factors that we want to elevate to help us chart our own AI future. Where do you see the opportunities in that space, from your perspective—in particular, Mr Evans, given your experience—and where do you think there is an important role for government to play in terms of safety, standards and regulation? What's your elevator pitch on where you think we're best placed to go? Ms Stevens : In terms of the opportunities that I think are available, the way that we think about them inside Telstra is not to think about AI as a standalone opportunity but to think about what the business purpose of Telstra is, what our strategy is and what the things that make our organisation successful are, and those are our customers, our network and our employees. So that is where we look for the opportunities. It's not just, 'Here's a new AI tool out there; let's see where we might apply it,' or, 'There's a value pool over there; let's see if we can do that,' or, 'There's productivity efficiency over there.' It's deeply thinking about where it matters in our organisation. That helps us to then make it purposeful. Whatever we might build, it makes it purposeful, it connects it better to the people that do need to adopt it in the workforce Niki was talking about, and it makes it easier for return-on-investment types of decisions about where we might invest. So we really look at the opportunities as they line up to what Telstra's business is. The really good thing about that is that means it's not just the AI tech teams that are out there thinking about what the AI opportunities are. It's deeply considered by all of the group executives, all of the leaders at Telstra, how AI might show up and might help them in achieving the outcomes that they're going after. It becomes a business conversation rather than an AI conversation. Obviously, the AI tech and the cybersecurity and everything else that needs to go around it comes along with that and informs it, but I do think that keeping our AI opportunities centred on the purpose and use for Telstra as an organisation then makes it easier to connect. Then we're not just going to our workforce and saying, 'Go and be more AI fluent.' It's like, 'This is because this is how it's showing up in your work, how we want to help you in your work or where you work leads to as it connects to customers or to the network'. So the way we think about opportunities is to be considerate of where the technology is going but also to be even more considerate about where and why it is important at Telstra. In terms of the policies and regulations that sit around it, we were early adopters of the federal government's AI ethics principles. We work with the UNESCO Business Council for Ethics of AI and with the global mobile industry and other industry forums on ethical AI standards. I think the speed at which organisations are adopting AI and the technology is moving means that it's hard for regulations to keep up with that. For me, I think keeping human safety front of mind, and human fairness and humanity front of mind—I think good AI is where it advances humanity, not gets in its way, which is a very UNESCO thing to say, actually. It's being considerate of what guardrails we need in place to make sure that we are doing things for good, not just exploring new technologies for the sake of it. That is a principle that sits behind how we've taken those principles and ethics that are out there and applied them into our own guardrails while ensuring cybersecurity and everything else, as well as our workforce commitments. That's how I think about it. I wonder, Niki, and Steven as well, if you have anything in terms of the regulations or the kinds of policies that might be useful in digital infrastructure and in workforce—maybe to Steven first. Mr Worrall : Chair, to your question as to how government might help, there are two thoughts. The first is just in relation to sovereignty. It's a broader conversation, but I'll just make the point here that very clearly, very obviously, there's an opportunity and a need for our government and our community to agree to the terms under which this technology will be used. There's an umbrella that includes many thoughts, but I think that's first and foremost the primary role the government needs to play, and that's why this committee is so important, and we applaud the government and the members of the committee for coming together to have these conversations. The second thought would be then to Niki's point about our experience as a business. In using AI, there's a leadership impact. As leaders use AI inside our business and we get productivity benefits, we see further take-up. So my second thought here is that government's use of AI in a thoughtful, measured way is important in then building the trust of the community in the use of these services, because we know that there are lots of different thoughts about AI in the community; trust is a concern for many. I think government has a really important role to play to help establish trust through the safe and effective use of the technology. CHAIR: Thank you very much. I understand, Senator Dolega, you've got some questions. Senator DOLEGA: It's about customers in regional areas, following on from the chair's questions. I come from Tasmania, where in some areas it feels like Telstra's coverage is put together with rubber bands and bandaids at times. We have areas on the West Coast which lose connection sometimes for days on end. In a world where more customers are going to be demanding more mobile reliability and more data, how are you going to ensure that people in regional areas of Tasmania have the opportunity to harness and use AI in business for their own personal uses? How reliable will Telstra's services be, and how will it improve for Tasmanians? Mr Worrall : Dayle, I'll take that, I assume. Ms Stevens : Yes, of course. Mr Worrall : I'll just start by acknowledging that the geography of the country that we cover—mainland and, of course, into Tasmania—presents a range of challenges that are well understood in regard to the provision of high-quality telecommunications services. It's something that we work on each and every day, obviously balancing all the different requirements that need to be considered as we then provide the mobile services that we offer around the country. The same considerations are now being brought to this dialogue around how we think about building the digital backbone for the nation to sustain the AI economy that we're rapidly seeing emerge in front of our eyes. I'm not suggesting that we will cover every part of the country, but I do want to emphasise that the investment we're making in the Aura Network has been purpose built to connect rural and regional Australia and very much not just to think about the data centres that are operating around the country or those that may operate in the country in years to come. The Aura Network is a $1.8 billion investment in the digital future for Australia. It includes the on- and off-ramps, as I think I might have mentioned earlier. So it doesn't connect every part of the country, but it does connect large parts of Australia, and independent economic analysis talks to the economic benefit that we expect will accrue to rural and regional Australia as a result of the investment. We can obviously give you a detailed breakdown as it relates to Tasmania after the committee meeting if that would be of interest. Senator DOLEGA: That would be of great benefit, Mr Worrall, because obviously, while we talk about Telstra rolling out these opportunities, the regions may think, 'Well, we still haven't even really got decent, reliable services as it is, let alone moving to newer technology.' It would be greatly appreciated if you could provide that on notice to me. That's all from me. CHAIR: Ms Mascarenhas? Ms MASCARENHAS: One of the things that I think are unique about Australia is that we have the NBN, and that's a national asset. I'm wondering if you've got particular views on sovereignty and data centres and the role that we could play—and whether Telstra could play an important role—in relation to that sovereignty. Ms Stevens : Let me start by saying that I think our experience in operating critical infrastructure sovereignty tends, for us, to resolve itself into really practical situations. I might hand to Steven Worrall to talk to you about that. Mr Worrall : Sure, I'd be happy to. There are two thoughts here. In relation to sovereignty, we think agency is first and foremost. As I mentioned earlier, I won't dwell on it, but Australia should determine the terms under which this technology is used here and, again, this is why these conversations are so important. Obviously, that goes to a range of factors related to where you locate data centres, the use of water, the use of energy, of course copyright and a range of other factors. We think that's where this conversation starts. The second thought then is control. If I can pass back to that supply chain thought that I mentioned earlier, we think it's really important for us as a nation to be thoughtful about where we want to maintain control in that supply chain. It doesn't necessarily mean ownership, but it does mean control, and the first thing under that banner, of course, comes to security. How do we secure our nation when the nature of the threat that we're being exposed to is only continuing to escalate, where some of these frontier lab models are being used in ways—or could be used in ways—that would be detrimental to the national interest? We at Telstra think we play—we know we play—an important role in defending the nation today. We work with a range of government agencies using cleared resources—Australian personnel—running services over the top of Australian owned infrastructure. We think these sorts of considerations are becoming even more important in this new AI era, where that defensive capability and responsive capability needs to operate at machine speed, leveraging the tools that are being developed largely offshore. Just to round back, we think these two sorts of agency and control are vital as they relate to sovereignty, and we look forward to playing our role, working side by side with government, in continuing to defend the nation and building that sovereign capability. Ms MASCARENHAS: Another question relates to social licence. One of the things that's unique about Telstra is you have so many users across Australia, but you also have a physical footprint—and you've also been here forever. I'm wondering if there are particular lessons that you've learnt from participating in the physical and the digital world that you think the new AI providers should learn from Telstra, because you guys have been in this game a lot longer than some other players. Mr Worrall : No doubt. I think back to the earlier question in relation to Tasmania. We acknowledge that the provision of the services we provide is challenging in a nation the size of Australia; I'll start there. Yes, we've learned a great deal over many years of supporting Australia. As it relates to that intersection between the physical infrastructure—you mentioned data centres—there's no question that AI is not just software; AI is increasingly being recognised as an infrastructure discussion as well. It's the community commitment, the relationships that are established and the social licence that you referenced that become the most important. We are not perfect, but I point back to the Aura Network, the $1.8 billion investment. We're two-thirds of the way through that network build. We've worked with traditional owners, local councils and state governments all across the country to build that network to this point. In fact, the reason I'm not appearing in person for this hearing today is I was in Perth yesterday, opening the Perth to Sydney route. That has been a massive collaboration with a range of stakeholders. There's no doubt, as I look at the supply chain and in particular at the data centre operators that are emerging, that many of them are well aware of these sorts of issues and the importance of them. But that industry is not as mature as the telecommunications industry. We would love to play our role in working side by side—and we do today—with those data centre operators to ensure that, together, we work in the national interest. We think that's an important role that we can and need to play. Ms Stevens : I might add to the social licence question, beyond the data centres and infrastructure part. One of the questions for me is how people can trust the work we are doing in AI or trust any business with the work they're doing in AI. You shouldn't have to take a company's word for it that their AI is trustworthy and responsible. In our experience, it is, as I mentioned before, taking the principles into policy and into controls, and then being able to, ultimately, get to evidence that those policies are working and provide evidence about how that is working. That means clear and rigorous assessment and assurance over the AI that we have in place and being able to monitor it ongoing—so not just what AI we choose to deploy but how we monitor it as it's live, and providing that highly transparent oversight of it. Responsible AI, for us, is also monitored at a board level. It is a board level risk. We report to the board on a regular basis on how we are governing and managing responsible AI, and the technical controls that we have in place around that. Ultimately, trust is earned when organisations do not just say that their AI is trustworthy but provide the evidence points on it. That is something we're working with the UNESCO Business Council on—how we share and learn from others to bring that capability back in for us. The last part about social licence is thinking about the broader community: how is the broader community thinking about AI and engaging in AI? There's a lot of work we do through the Telstra Foundation, predominantly, which is about trusted research—so the Australian digital index and the Australian youth digital index is trusted and well-used research and information, comparatively, year on year about how Australia is thinking about not just AI but digital capabilities. We also work with vulnerable cohorts, like the AI for Good program with the Good Things Foundation, and with Microsoft and LinkedIn, on providing resources out in AI hubs for vulnerable cohorts to be able to go and learn to confidently use AI. We run AI modules through Code Club, which is for youth and kids out there learning to code and learning to work with AI. The Telstra Foundation works with youth mental health organisations like ReachOut, helping them to work out how they might use digital capabilities in providing more reach for youth in mental health. We do work with AI and devices—we're not a device manufacturer—and a recycling facility, the National Device Bank, to get devices out to people. We're really trying to think not just about our role as a critical infrastructure provider and our role in terms of what we do with our customers but what kind of difference we can make in the broader community as well. I think all of that goes to not just Telstra's social licence but how we are helping our customers, our employees and also the rest of Australia in terms of being able to access the benefits with AI. Ms MASCARENHAS: Cool. This will be my final question, and I feel like it sounds superficial, but I think it matters. I'm going to say what data infrastructure looks like. I went to a conference, and the sentence that was said was, 'Why do data centres have to look like windowless prisons?' What's interesting is that, if I look at some of the communications infrastructure in my community, there are sometimes beautiful examples and sometimes some really ugly examples. I'll be really specific. There's a beautiful fence for a Telstra building on Albany Highway in Cannington. The fence is painted in these fabulous bright colours. It almost looks like it's inspired from Mexico. I always feel joy when I drive past that bit of infrastructure. But then there are other ones where you're like, 'Oh my gosh, that is so embarrassingly bad.' Do you think that there are lessons that Telstra has learnt? Even if I think of communication boxes in some local councils, there's beautiful artwork on these centres. Are there lessons that you've learnt on how the creative industry can actually uplift some of this ugly but critical infrastructure? Ms Stevens : Steven, do you want to talk to that one? Mr Worrall : We'll pass on your comments to the team. They'll be delighted to hear that. That's very kind of you. It connects directly with the earlier question around maturity and the potential for collaboration and, perhaps, a role that we might play in working more closely with the data centre operators. Data centres are designed for functionality. In the same breath, because of the relative immaturity of that sector, we end up with the data centre footprints that we see today. I think you're pointing to a really important point, which is that, as this industry matures and gets to that social licence and community acceptance that we are talking about, these sorts of outcomes are possible. By working together, we might influence what the future design looks like or how they're presented in the community. So this is an interesting question. I hadn't thought of it in this way before. That will certainly jog some other conversations that we can have with the partners that we work with in the data centre segment. Thank you for raising it. Ms MASCARENHAS: The Pawsey supercomputer in Kensington in WA is a really beautiful example of beautiful critical infrastructure while you're in Perth. Mr Worrall : I'll put that on the list of beautiful infrastructure exhibits. CHAIR: Excellent. I understand Senator Sheldon has a question; we might go to him for a final one. I wanted to step back out again to the big conversation or the big debate in front of us as a nation at the moment in relation to artificial intelligence. It is about the extent to which there is an opportunity for Australia in the interest that some of the hyperscalers have in coming here to build and invest and train here. I wanted to get some reflections from you around what you think this means, noting that there are significant issues that we need to make sure we navigate well. But what, in your sense, could this mean when it comes to sovereign capability and when it comes to the deployment of artificial intelligence across the economy—the economic gains. But, more importantly for us, I think—and it goes to the social licence element—is how do we actually share, genuinely share, the benefits of it? Some broad reflections from you would be really helpful, I think, for the committee. Ms Stevens : Steven, do you want to take that one? Mr Worrall : Yes, I'd be happy to. I think we're right on that threshold at the moment. As I know, everyone is aware of the AI labs looking at Australia as a training destination, subject to those two thoughts that I shared earlier—agency and control. They're broad umbrella statements, but they point to many of the thoughts that you included in your question. We think having that capability based in Australia is a net asset for us as a nation. If I just look at that in terms of security implications, given the more challenged environment that we are operating in our region and around the world, having access to leading models, in Australian hands, using Australian infrastructure in cleared environments, I think, is a huge advantage and something that would accrue to the national interest. I extend that thought then to think about how the presence of that training footprint and the capabilities that we would develop as a nation could then be extended into other industries. This is where you get to the central theme here which is: how do you ensure that the economic surplus that's created as a result of these technologies is largely retained here in Australia? There are lots of considerations, and you've heard many of them through these hearings that have to be weighed up because there are competing demands. I understand that. But I think, to your question, I believe and we believe that this is a threshold moment and as a result does present a range of unique opportunities for Australia. My last thought is we know that these firms are not operating these models in any other country other than the US today. And so this would give us access to the capabilities that I think ultimately would assist Australia in a range of ways. CHAIR: Thanks, Mr Worrall. I understand Senator Sheldon is going to put his question on notice. That brings us to the conclusion of this session. Thank you very much to you all from Telstra for making yourselves available to present to us today and to answer our questions. We really appreciate that. Again, if there have been any commitments around providing additional information on notice or answers to questions on notice, please work with the secretariat for the next two weeks to do that. This now concludes today's hearing. I extend thanks out to all the witnesses who have appeared before us today and a big thank you again to Hansard and Broadcasting for their assistance. As I said, the committee has agreed that responses to questions on notice should be provided within the next two weeks. Committee adjourned at 16:58