While AirTrunk, NEXTDC and CDC Data Centres expand their hyperscale data centre footprints, Telstra is pursuing a fundamentally different strategy: transforming its Enterprise and services delivery model through automation while maintaining a focused, certification-rich data centre portfolio. Between 2024 and 2026, the telecommunications incumbent has announced more than 3,900 role reductions across Telstra Enterprise, Network Applications & Services and Telstra Purple, with significant work being re-platformed into a $700m AI and process-automation joint venture with Accenture. Meanwhile, Telstra InfraCo operates three strategically certified carrier-neutral data centres and is developing a 62MW AI-optimised Minchinbury campus targeted for 2028. The approach raises a central question for the Australian market: can connectivity-first infrastructure combined with operational efficiency compete with the growth-led hyperscale model that currently defines data centre valuations?
The latest round: 650 roles and a shift to India
In early February 2026, Telstra proposed cutting up to 650 more roles, with at least 209 positions identified within the Accenture joint venture set to be offshored to India, and hundreds more across Enterprise and customer‑facing teams flagged for redundancy or transfer. Internal emails obtained by the ABC show CEO Vicki Brady framing the changes as essential to the "Connected Future 30" strategy, a five‑year plan that leans heavily on AI to deliver simpler, cheaper operating models. This follows an initial 2,800‑role cut (roughly 9 per cent of staff) announced in May 2024, targeting Telstra Enterprise and reducing the Network Applications & Services product portfolio by about two‑thirds, and a further 550‑role reduction proposed in July 2025.
The workforce transformation 3,900 roles since mid‑2024 is concentrated in the teams that design, migrate and support complex data‑centre, hybrid cloud and network architectures. For critical‑infrastructure buyers, that means the people who turn a rack and a cross‑connect into a sticky, high‑margin relationship are being restructured through the Accenture partnership just as AI workloads become more demanding, not less. The Communications Workers Union has publicly warned that these cuts affect roles "fundamental to Telstra's ability to deliver for customers", which for data‑centre buyers translates into a transition period in customer-facing technical teams that buyers will need to evaluate.
Telstra InfraCo’s connectivity-first AI Strategy
Carolina B., our analyst with experience in strategy for the national infrastructure space, frames the central question facing Telstra InfraCo this way: "To run all the current and upcoming AI demand, there is hunger for smart infrastructure investment, especially in data centres. There have been massive investments into companies like NEXTDC, CDC Data Centres and AirTrunk. Telstra InfraCo is surfing the AI wave differently than the data centre players, though: maintaining their focus on connectivity, mainly in fibre. Is the strategy to keep a winning team good enough or is it time to bring innovation into play?" For Telstra InfraCo, the answer appears to be a calculated bet that Australia's AI infrastructure race will be won not by the largest data halls, but by the most extensive networks connecting them.
She notes that fibre is not optional for AI, it is the backbone that connects data centres, edge sites and users with the high capacity and low latency modern AI workloads demand. "Modern AI workloads generate enormous traffic flows that can't be handled by wireless or copper alone. Fibre delivers the bandwidth and speed necessary to keep distributed GPU clusters and large models fed with data."
Telstra InfraCo owns the largest territorial intercity network in Australia, providing extensive routes between cities and regions. As hyperscalers and enterprises increasingly need to scale AI services, cloud connectivity, edge computing and IoT deployments, leasing dark fibre and wavelength services can create stable long‑term revenue streams, less cyclical than colocation rack space pricing. Fibre also underpins edge computing and latency‑sensitive workloads by linking edge nodes back to core infrastructure, which becomes critical as real‑time AI inference proliferates. Another advantage of a robust fibre network owned by an Australian firm is that it helps address digital sovereignty concerns and supports regional digital access and economic development.
"That said," Carolina observes, "data centres are where the AI engines actually run: that means GPU/TPU clusters, storage, and highly specialized infrastructure for training and inference. You can't replace this compute with fibre; you can only connect to it."
Strategic scale: sovereign certifications meet targeted capacity
Telstra InfraCo operates three strategically positioned carrier‑neutral colocation facilities in Sydney (St Leonards), Melbourne (Clayton) and Canberra (Deakin), with target IT capacity of 20MW, 20MW and 4.5MW respectively. St Leonards and Clayton are currently operational at dual 10MW feeds. These facilities are Tier III designed, target a PUE of 1.35, offer liquid‑cooling options (direct‑to‑chip and immersion), and hold certifications including ISO 27001, ASIO security levels, PSPF compliance and Defence Industry Security Programme (DISP) compliance. Crucially, Telstra's Deakin and St Leonards facilities hold HCF Strategic Certification as strategic enclaves, a significant credential for enterprise and government tenancy.
However, global and regional reports consistently show NEXTDC, CDC and AirTrunk dominating the market's capacity pipeline and power footprint, particularly in major hubs like Sydney and Melbourne. NEXTDC alone operates multiple facilities across Australia, with its S3 campus in Sydney delivering 80MW of critical power and the upcoming S7 in Eastern Creek planned for 550MW of capacity. AirTrunk's SYD1 hyperscale campus provides 130+MW across multiple buildings, while CDC Data Centres operates as the largest owner/operator of data centres in Australia and New Zealand with campuses across Canberra, Sydney, Melbourne, Auckland and Perth
"Though they have a small presence," Carolina notes, "InfraCo is positioning itself as a player in the speculative build‑out landscape by entering a strategic partnership with Starwood Capital Group and Doma Infrastructure Group to develop a 62MW AI‑optimised data centre in Western Sydney (to be ready by early 2028)." In this model, InfraCo provides the land and the connectivity infrastructure while Starwood and Doma take on financing, construction and operations. "This kind of arrangement is smart and collaborative," she says, "but it doesn't make InfraCo the lead operator in the way a NEXTDC campus does. Instead, it positions InfraCo as a critical ecosystem enabler." This partnership model potentially allows InfraCo to participate in hyperscale development without the capital intensity of competitors.
What the future might hold
Carolina identifies several strengths that work in InfraCo's favour if it decides to compete more aggressively in the data‑centre space: "They offer carrier‑neutral colocation with strong connectivity, their data centres have the highest HCF certification and they have a data sovereignty appeal (which will become more important going forward, especially for government and defence). These are important, but they are not the metrics that typically drive the high multiples in the broader data centre investment narrative."
Several trends could elevate Telstra InfraCo's profile over time. The first is AI and hyperscale growth: with demand for AI‑optimized facilities rising, the 62MW Western Sydney project could serve as a springboard for deeper involvement in larger campus builds. Strategic alliances with private equity and specialist developers could see InfraCo becoming an indispensable partner for new builds without needing massive capital expenditure itself.
Monetisation of connectivity adds significant value and ensuring fibre direct connectivity into data centres and cloud could become a core differentiator as edge computing and distributed cloud grow. InfraCo's 250,000 km of high‑speed lit and dark fibre, predefined routes connecting Australian data centres and NBN points of interconnect, and links into ICON (Intra‑government communications network) provide a unique infrastructure moat that pure‑play data‑centre operators cannot easily replicate.
"InfraCo is well‑positioned to maintain their leadership in the connectivity business," Carolina concludes, "but if it wants to enter the data centre business (and compete for the huge investments coming from national and international investors), they need to include it in their strategic priorities. What they certainly have are the capabilities needed and they are well‑positioned to enter the data centre business in full force. That said, the question remains: will they take the ambitious leap or maintain the secure path?"
Two paths in Australia’s AI infrastructure build-out
The tension Carolina identifies between Telstra's proven connectivity strength and its specialised data centre presence is made sharper by the workforce reductions now underway. Steven Worrall, former Microsoft ANZ Managing Director, was appointed InfraCo CEO in September 2025, bringing direct experience from Microsoft's multi‑billion‑dollar Australian cloud and AI investment program. Yet the broader Enterprise and technical services teams are undergoing restructuring through the Accenture partnership, creating a contrast between executive-level hyperscale expertise and the operational transformation happening in mid-tier technical and delivery teams
For governments, banks and AI‑heavy enterprises choosing where to place sovereign workloads, the question becomes whether to back the incumbent that is optimising for workforce reduction and offshore delivery, or the specialists that are doubling down on scale, engineering depth and local operational control.
Analysis written by CertifiedStrategic Editorial Team
CertifiedStrategic.com - Australia's independent data centre index tracking capacity, certification and market news across the country's critical infrastructure providers.