Enter the giant: Telstra’s new chapter

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When Aussie developer John Papandriopoulos won the “green card lottery”, which allowed him permanent residency in the US and the power to start his own San Francisco-based tech company, few would have predicted what would happen next.

Developing an app that allows the iPhone 5 to take 20 pictures a second, Papandriopoulos released an innovation so unique that his company SnappyLabs was bought out by Apple earlier this year for a figure rumoured to have made the 35-year-old a multi-millionaire.

The San Francisco Bay area was also where the magic happened for Aussie tech entrepreneur Ben Keighran. The young entrepreneur, who taught himself to code in C++ by age 13, moved to San Fransisco from Sydney in 2007 and eventually started Chomp, a mobile app search engine. His innovation was sold for roughly US$50m in 2012.

Papandriopoulos and Keighran aren’t alone. As mobile app technology continues to evolve, Australians have become increasingly drawn to the sprawl of suburbs that forms the southern part of the Greater San Francisco Bay area, a region better known as Silicon Valley. Businesses and professionals of all types have come here following the scent of rags to riches tech start-ups. This has included Australia’s biggest name in telecommunications: Telstra.

The company has a Silicon Valley office, set up to explore opportunities for taking stakes in technology businesses. A primary focus has been companies releasing mobile apps.

Telstra general counsel Carmel Mulhern says the company is keeping an open mind about which entrepreneurs it partners with, promising flow on work for law firms.

“Telstra is looking into applications that would use our network or potentially sit at the top of our network. They need to be innovative; applications that we could learn from or package up with other products that would be on our network. We are open to anything that people come up with. And that’s the whole point,” Mulhern says, adding that this approach has called for the company to further engage the legal community.

“There’s a lot of legal work in there because it doesn’t only involve setting up companies, but also the intellectual property side of things: trademarks and patents.”

Telstra involvement in the bustling tech start-up scene in Silicon Valley has been complimented by its establishment of an innovation hub in Sydney. The hub provides funding for tech entrepreneurs who are developing new ideas, which Mulhern says dovetails into the company’s strategy of exploring new markets and opportunities.

“Legally, this has some unique challenges,” she says. “Our industry is highly regulated and, of course, there is even a chapter in Australian trade practices law just on telcos. The challenge for us is to grow and start doing other things, but within the constraints that we have. This means it’s a really great and interesting place to work as a lawyer.”

Considering Telstra is already a well-established brand with a strong network infrastructure, the company has identified that growth is needed in service functions that are not yet a core part of Telstra’s offering.
This has propelled the company to venture into new technologies, and also to aim its sights at global diversification. One of the service platforms generating buzz is ‘the cloud’.

Also referred to as cloud computing, this entails distributed computing over a network, where applications or content are accessed and shared on a server, rather than a single device. It is nothing new, but has been generating interest as the scope of what can be accomplished utilising cloud-based platforms increases.

“We see it as very important,” says Mulhern. “We see [this] as fundamental to our business and large enterprise customers in Australia and Asia. It’s a skill we have and are looking to expand to support our Australian enterprise customers as they move offshore.”

Rolling out services at a higher level has required significant financial investment by Telstra, helping shift how the company considers many of its other expenses – including its legal bills.
“We’ve had to be innovative,” Mulhern says. “We were the in-house law team that pioneered the ‘all you can eat model’. It was a really good way to introduce a new firm to our panel and build greater efficiency in spending.”
The model was developed following an agreement with a large firm that was new to the company’s panel at the time. Telstra was concerned about being billed for additional hours brought about by learning on the job that often occurs when new firms advise the company.

“We had to think: how do we ensure we are not paying them to get up to speed?”

Mulhern says the company reached an agreement where it would pay the new firm a set figure for a year’s work. Effectively, Telstra could brief the firm as much as it liked, but the price for legal services would remain fixed.

“The beauty of this is you could factor a fixed number into your budget of what you’d be spending with that firm. There was risk for the firm that we would go over that amount and they would be giving us a lot of free work, but there was risk for the company that we wouldn’t use them enough and leave money on the table. We ended up getting it about right. We got certainties in what we were going to pay, the lawyers got encouraged to brief a new firm because effectively, you weren’t looking at every single bill in minute detail.”

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