Telstra has activated the Perth–Sydney route of its Aura Network, the longest link in the operator's AU$1.8 billion ($1.25 billion) intercity fiber build, and now has 9,000km of the planned 14,000km network in the ground.

The milestone brings the 10-route project to roughly 65% completion, with six routes built and active connections spanning Sydney, Melbourne, Canberra and Perth. Telstra expects the remaining four committed routes — Adelaide-Melbourne, Perth-Adelaide coastal, Sydney-Brisbane and Darwin-Glendambo — to be finished by fiscal year 2028.

"Our next committed milestones are Adelaide-Melbourne, the coastal Perth-Adelaide route, Sydney-Brisbane and Darwin-Glendambo, which are planned for completion by FY28," Roary Stasko, Telstra Digital Infrastructure's chief customer and growth officer, told Light Reading.

What does the new route actually change?

The Perth–Sydney link gives Australia's western and eastern states a direct terrestrial digital pipeline. It connects cloud hubs and data centers in the eastern states to Perth, and from there to global subsea cable systems.

"Perth is an important landing point for subsea cables connecting Australia with global markets," Stasko said. "The Aura Network provides the high-capacity terrestrial backbone that can carry those international data flows beyond the cable landing point, connecting Western Australia's global gateways with data centers, cloud regions, major cities and industry across the country."

On capacity, Telstra claims the network delivers up to 35 times more fiber capacity per path than a conventional link — a marketing-flavored "35 lanes versus one lane" framing from Stasko. The commercial offer is concrete, though: customers can buy managed wavelength, direct spectrum or dark fiber, and the architecture pairs an express intercity route with regional connection points.

Demand is already material rather than speculative. Microsoft and Google have both secured capacity on the network.

Why the investment case leans on AI

The build, unveiled in 2022 as the Intercity Fibre Network, reflects a shift in Australian connectivity spending. Subsea cables long dominated investment, but AI and cloud workloads are pushing demand toward resilient terrestrial routes.

"This is about more than adding fiber. AI, cloud and data center expansions are changing where capacity is required and creating demand for networks with diverse, resilient routes that can withstand outages, congestion and other disruptions," GlobalData senior analyst Brendan Swan wrote in a recent blog.

Telstra Digital Infrastructure CEO Steven Worrall made the same case in an article posted Wednesday to mark the Perth–Sydney launch.

"AI may capture the headlines, but AI is not just a software story. It's an infrastructure story. Every AI application depends on data moving between people, systems, data centres and clouds quickly, securely and reliably," Worrall wrote. "That's why we made the decision to invest ahead of demand."

An Oxford Economics study commissioned by Telstra puts numbers on the regional stakes. It estimates Western Australia's digital economy could grow from AU$16.8 billion ($11.67 billion) in fiscal 2025 to about AU$89.1 billion ($61.89 billion) by fiscal 2040 under an accelerated digital adoption scenario. The study points to mining applications — autonomous fleets, remote operations, industrial AI, digital twins and predictive maintenance — plus defense demand as Western Australia becomes an Indo-Pacific strategic hub. As Telstra-commissioned research, the projections warrant some skepticism on magnitude.

How quickly is the build progressing?

The pace has been steady since the first segment went live:

• May 2025: Sydney-Canberra route finalized and ready for commercial service
• October 2025: Sydney-Melbourne coastal route activated
• Now: six routes live, including Sydney-Canberra Coastal, Sydney-Canberra Central, Melbourne-Canberra Central, Sydney-Perth Direct and Adelaide-Wilmington Direct

Beyond the committed build, Telstra has completed designs for potential Perth–Darwin and Brisbane–Darwin routes. "Any investment decisions on those routes will be subject to customer demand," Stasko said.

Is Telstra alone in this market?

No. Fiber specialist Vocus is building rival long-haul capacity under its Australian Digital Infrastructure Platform. In July it announced a AU$500 million ($347.4 million) ducted long-haul route between Sydney and Melbourne, due by 2029, plus a second 4,000km ducted route linking Brisbane, Townsville and Darwin, with completion expected in 2030.

That competition sets up a race to lock in hyperscaler and enterprise capacity contracts as AI-driven traffic grows. Telstra's head start — two-thirds of its network built and two of the world's largest cloud players already on board — gives it the early advantage, but Vocus's northern-route strategy targets corridors the Aura Network has not yet committed to build.