Telstra has launched its rapidly growing eHealth division into Asia, winning two key contracts worth tens of millions of dollars in Thailand and Malaysia.
Telstra Health is one of the company's key hopes for growing profits as the national broadband network erodes its earnings and rising mobile service competition from Optus and Vodafone Australia threaten to hurt revenue.
The latest deals signal a bold new push for the telco and forms a new plank of its strategy to extract billions of dollars from Asia's increasingly affluent middle class.
"Health is just such an extraordinary opportunity especially when you consider the rate of digitisation," Telstra group executive retail Gordon Ballantyne told Fairfax Media. "We first have to build it in Australia but we have been overwhelmed by the interest in other Asian countries to come and adopt some of the things we're doing here."
Telstra has paid $237 million for 15 acquisitions in the past 18 months with the goal of hitting $1 billion in annual revenues by 2020. It's a goal that will require rapid expansion both domestically and abroad – Telstra Health made just $78 million in the year ending June 30.
In the latest Asian deal, Telstra Health subsidiary CloudMed will install its Arcus System into facilities owned by the Sunway Medical Centre Group, Penang Adventist Hospital Group, Tung Shin Hospital and Khon Kaen University Hospital.
Arcus is a hospital records system that helps track patients and their needs throughout their stay.
"We've been successful in winning a number of multi-million dollar contracts in Thailand and Malaysia to deliver our integrated hospital information exchange offering," Mr Ballantyne said. "We wouldn't be making an announcement if it wasn't in the range of tens of millions … but it's south of $50 million.
"We almost doubled our health business last year and we plan to more than double it again this year … and I would see it accelerating beyond that because our aspiration is to build a $1 billion business by 2020 if not before."
Telstra, which is Australia's biggest telecommunications company, predicted Asian healthcare costs would rise from $US1.34 trillion in 2013 to $US2.21 trillion in 2018 thanks to growing populations and the rise of chronic illnesses.
This in turn would help Telstra sell a range of new products and services throughout the region.
Mr Ballantyne said the recently-acquired health analytics company Dr Foster was the most likely subsidiary to win a range of deals in Asia.
But some key Telstra shareholders are wary of the company spending large amounts to make new acquisitions and would instead prefer an increase in the dividends paid back to investors.
Telstra chief executive Andy Penn used his first annual results in the top job to tell shareholders he would ramp up spending on his mobile network to ensure the company was a market leader, even if that eroded revenues and profits.
Telstra is also making other key investments in technology and telecommunications services throughout Asia as part of its drive to earn billions of dollars from the region. It bought technology and fibre network provider Pacnet for $US697 million in 2014.
Mr Ballantyne said the telco would continue buying ehealth providers in a bid to grow but added the shift towards organic growth – which refers to raising revenue from existing businesses – had already begun.
"Up until this point we've been very active in acquiring capabilities," he said.
"So I think we'll see a shift from inorganic to organic as we leverage all the wonderful assets and capabilities we've acquired.
"But we'll continue to acquire to fill up gaps in our capabilities."
The latest contracts have been struck in local currencies, including the Thai baht and the Malaysian ringgit. Both have fallen dramatically in the past few months thanks to Thailand's slowing economy and recent bomb blast in Bangkok and the 1MDB scandal hurting confidence in Malaysia's economy.
But Mr Ballantyne said Telstra's treasury had hedged its positions so that the falls did not have a material impact on the company – a fact likely caused by the relatively size of the contracts.
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Autor(en)/Author(s): David Ramli
Quelle/Source: The Sydney Morning Herald, 24.08.2015
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