Strategic Foresight - Insights in Business and Technology

Telstra Network Paradox: Growth Trap: More network → More customers → More usage → More capex.  Returns Impact: Historically subpar ROC (5-6%) due to continuous investment needs. Future:  10% ROIC by 2030 is highly ambitious 5G Network Evolution Higher frequency bands require denser base station networks.  Fixed mobile internet growth (NBN competitor) increases infrastructure demand. Hypothesis:  Telstra’s competitive advantage in network quality requires sustained high capex, limiting FCF and shareholder returns. Capex: 16.5% × $23Bn revenue = $3.8Bn annually.  FCF Under The Hood Current EBIT: $3.8Bn  Capex Intensity: 16-17% of revenues  ~$23Bn revenue, so capex ≈ $3.7-3.9Bn.  Depreciation & Amortisation: ~$2.5Bn (typical for telcos). Taxes: $3.8Bn × 30% = $1.14Bn.  FCF = EBIT + Depreciation - Taxes - Capex – WC FCF = $3.8Bn + $2.5Bn - $1.14Bn - $3.8Bn - $0 (stable)  ≈ $1.36Bn. FCF Yield = $1.36Bn / $75Bn   ≈ 1.8% (low, r...

  Andrej Karpathy’s Vision of Software 3.0: A Glimpse into the Future of AI-Driven Development Andrej Karpathy’s recent keynote at AI Startup School in San Francisco, as discussed on Hacker News, introduced “Software 3.0,” a paradigm where large language models (LLMs) become programmable building blocks, with natural language as the new code. Here’s a quick dive into the key takeaways and why they’re sparking both excitement and scepticism. What is Software 3.0? Karpathy defines  Software 3.0 is a shift from traditional coding (Software 1.0) and neural network weights (Software 2.0) to LLMs that directly execute tasks.  Instead of writing code to be compiled, developers prompt AI to deliver outcomes (Human → AI → Result). Think of it as programming with plain English, where LLMs act as dynamic, intelligent interfaces. Key Highlights Human-in-the-Loop Design : Karpathy advocates for tools with adjustable autonomy (an “autonomy slider”), tight generate-and-verify loops to ...

The telecommunications industry is undergoing a profound structural transformation, moving away from traditional, vertically integrated operators towards specialist business units, affectionately known as "X-Co" models. This blog post takes a deep dive into these emerging entities—ServCo, NetCo, InfraCo, and TechCo—outlining their distinct roles, strategic drivers, and intricate interdependencies. This push towards disaggregation is primarily driven by the need to unlock shareholder value, boost operational efficiency, navigate complex regulatory landscapes, and fast-track innovation in our rapidly evolving digital economy. While offering significant advantages, this strategic re-architecture introduces inherent complexities, particularly concerning IT system integration, operational coordination, and talent management, demanding meticulous planning and robust collaboration frameworks for successful implementation. The Evolving Landscape: Why Telcos Are Breaking Up For quite ...