As exclusively revealed by Fairfax Media, the telco giant on Wednesday announced it was partnering with Medgate, a major Swiss provider of online healthcare services, to help connect patients and medical professionals over the internet at all hours for a fee.

The move is the latest in a series of health-related partnerships and acquisitions that have cost Telstra around $100 million over the past 12 months as it attempts to cash in on Australia's ageing population.

Telstra retail group executive Gordon Ballantyne said health spending in Australia was set to hit $200 billion by 2020 and  the unit could generate substantial revenue.

"Overall revenue for the division was only $43 million [in financial year 2014] ... but over time you can see this business growing quite significantly," he said.

It would not take long for Telstra to grow its health division to the same level of significance as other units such as its Network Applications and Services group, which made $1.9 billion in revenue during FY14.

"I think we're talking about five-year horizons because you need to look at a five year plan and the ambitions around what we can achieve and materially contribute to the business," he said. "Applying our scale I think we can really build a significant business.

"We're setting the ambition of being the market leader in eHealth in Australia."

Telstra chief executive David Thodey said health products would be a vital part of his business.

"We're taking a very long-term view on it," he said. "We are not doctors or medical practitioners but we can enable."

The partnership with Medgate will result in a new service called ReadyCare, which lets patients get consultations and prescriptions from doctors over the phone or via video links at all hours.

Australians wanting medical attention usually visit a general practitioner, except in exceptional cases where remote healthcare is provided over video links.

The new service will be available nationally with its own dedicated doctors who get special training for three months.

But Telstra has not decided whether customers will be able to bulk bill their visits to Medicare or be forced to pay for the service themselves.

"We're still working on what the model will be in terms of funding," Mr Ballantyne said.

Mr Thodey will attempt to woo institutional investors on the issue at a briefing  in Sydney on Thursday morning.

Two clients enlisted

The telco has already signed up two customers for its healthcare services.

One is a national telehealth connection service formed in partnership with the Northern Territory government to bring remote healthcare to regional community centres.

It has also partnered aged-care provider Silver Chain Group to monitor its patients leaving hospital to lower the risk of post-surgery issues.

Telstra Health is being headed by Shane Solomon, who was poached from KPMG for the role.

Solving the looming clash

In August, he told Fairfax Media that virtual doctor consultations were a key part of solving the looming clash between a rising population and the high cost of building hospitals.

Telstra is fighting hard to avoid becoming a "dumb pipe" provider of telco services whose profits are eaten up by tech companies such as Google and Facebook. Profits from traditional phone-line services are shrinking and Telstra's senior management believe that electronic healthcare will be a key part of any future economy.