The Intercity Fibre Network will provide connectivity and extend Microsoft’s AI infrastructure so organisations can leverage AI.

“This partnership, which involves building high-capacity intercity fibre routes for Microsoft, further enables Microsoft to boost its capacity and achieve end-to-end connectivity across key telecommunications routes in Australia and across the Asia-Pacific region,” said Telstra CEO Vicki Brady in a statement.

“With around 1,800 kilometres of fibre already laid across the country, Telstra’s Intercity Fibre Network is undeniably about the future and will drive growth, connectivity and digital prosperity. It will move the nation’s digital capabilities from the gigabit era to the terabit era – which will be essential for AI, quantum and new data centre gigaplexes.”

According to Telstra, Microsoft has now signed contracts for the first routes and has engaged Telstra InfraCo to deliver solutions within Australia and to power more AI capabilities for its customers.

Telstra is also investing in 21,000 Copilot for Microsoft 365 licences to help its employees adapt and thrive in an AI-fuelled future.

Brady said the symbiotic partnership between Telstra and Microsoft underscored the critical role of robust connectivity infrastructure in fuelling AI advancements.

“As we move into this new era of AI, connectivity has never been more fundamental. There’s so much to be excited about when it comes to AI – including generative AI tools like Copilot – but none of it works without the foundational layer of secure, reliable connectivity,” Brady said in a statement.

“Together, we are enabling AI transformation across Australia that enriches employee experiences, reinvents customer engagement, reshapes business processes, and bends the curve on innovation,” says Microsoft executive vice president and chief commercial officer Judson Althoff.

Telstra is also proposing a phased roll out of Copilot to its regular users of Microsoft 365 apps, after consulting with employees and unions.

The large-scale adoption follows a trial of 300 early adopters, who reported using Copilot to summarise meetings, emails, and chat threads, and generate first drafts of content.

According to survey results, most Telstra users reported saving between one to two hours per week, with 90% agreeing that Copilot improved their experience at work.

The Copilot rollout follows the deployment of AI tools to help frontline employees better serve customers – like AskTelstra and One Sentence Summary – and a company-wide Data & AI Academy to train employees to use AI confidently and responsibly.

“Giving our team access to Copilot not only gives them the space and time to spend on more meaningful tasks, but also fosters a culture of continuous learning, improvement and innovation as we drive digital and AI transformation through our business,” Brady concludes.

The expanded partnership builds on the strategic five-year agreement that Telstra and Microsoft announced in July 2022 to support Australia’s digital growth.