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Telstra Corporation (, , ) (formed from '''''Tel'''''ecom Au'''''stra'''''lia) is an Australia n Telecommunications and media company under Private Ownership , with a dominant position in landline Telephone services, a large share of Mobile Phone services, domestic consumer (including Dial-up Access and Broadband internet Broadband Cable Modem , Satellite and ADSL services under the BigPond brand), business data services, and Cable Television . HISTORY Telecommunications services were originally controlled by the Postmaster-General's Department (PMG). On July 1 , 1975 , separate commissions were established by statute to replace the PMG. Responsibility for postal services was transferred to the Australian Postal Commission ( Australia Post ). The Australian Telecommunications Commission (ATC), trading as Telecom Australia, ran domestic telecommunication services. In 1989 the ATC was reconstituted as the Australian Telecommunications Corporation . In 1992 the Overseas Telecommunications Commission , a separate government body established in 1946, was merged with the Australian Telecommunications Corporation into the short-lived Australian And Overseas Telecommunications Corporation (AOTC) which continued trading under the established identities of Telecom and OTC. The AOTC was renamed to Telstra Corporation Limited in 1993. The corporation then traded under the "Telstra" brand internationally, and "Telecom Australia" domestically until 1995, when uniform branding of "Telstra" was introduced throughout the entire organisation. Telstra has faced competition since the late 1980s from Optus (Australia's 2nd largest communication company) and a host of other smaller providers. It retains ownership of the fixed-line telephone network, as well as one of two competing pay-TV and data cable networks. Other companies offering fixed-line services must therefore deal with Telstra except Optus, Transact and a few others who have installed their own infrastructure. PRIVATISATION Telstra was partially Privatised by the Commonwealth Government in two public offerings in 1997 and 1999. On 20 November 2006 Telstra became majority privately-owned, with the government's 51.8% stake reduced to roughly 17.0% after the sale of two thirds of its Shares . These floats attracted a great deal of public interest. Telstra has been a volatile stock due to the dot-com boom and the subsequent drop in value globally of telco stocks. The Australian Labor Party (ALP) had opposed full privatisation, although previous Labor PM Paul Keating considered a Trade Sale to BHP. In the past, Labor Party figures (including Lindsay Tanner ) publicly considered the idea of a breakup of the company into separate retail and wholesale businesses; this proposal was dropped after opposition from Trade Union s and the cost of the legal action from the shareholders that would follow. The Australian Greens , the Australian Democrats and key independent Senators Meg Lees and Len Harris held similar positions to the ALP, which meant that any bill for full privatisation was guaranteed to fail in the Senate. Since the Coalition gained control of the Senate, it passed the sale legislation with a majority of 37-35. In many rural areas, the availability of Mobile Phone services and Broadband internet services, as well as general service quality, remain topics of contention for many rural customers. Ultimately, the National Party supported the sale, drawing criticism from state Farmers Federations, but not the National Farmers Federation. Senator Barnaby Joyce drew criticism for reneging on his campaign promise to oppose the sale of Telstra. Over the past two years, Telstra's share price on the ASX has fallen and risen in synchronisation with regulatory and governmental decisions that may affect the company's operations. SERVICES Fixed-line services Telstra own and operate the majority of PSTN services in Australia. A large portion of Telstra's revenues are generated from fixed-line services, but Telstra has issued profit warnings in the past due to negative growth in the fixed line market. A shift from fixed line services is underway as local call volume falls Annual Report 2006 - Full Year Results and Operations Review and the uptake of mobile telephony increases. Telstra outsources a significant portion of network installation and maintenance to private contractors and Joint Ventures, such as ABB Communications and STCJV . Telstra also owns and maintains the majority of Australia's and the increasing takeup and use of Mobile Telephone s. Mobile telephony (Telstra MobileNet) Telstra operates the largest GSM , CDMA and 3G mobile telephony networks in Australia. MobileNet services are available in post-paid and prepaid payment types. Telstra provide GSM, NextG and CDMA (until early 2008 ) Prepaid Mobile services, via ''Telstra Pre-Paid''. This service has previously been branded under a number of different names, including "Zip", "U", "communic8", and "Telstra Pre-Paid Plus". In late as part of a project internally dubbed " Jersey " and launched on October 6 2006 . The CDMA network will continue to run until 28 January 2008 Telstra CDMA Upgrade Page , however, migration onto the Next G network has already begun for customers who are pre-paid, still under contract, or have expiring contracts. The current 3G WCDMA/UMTS network operating on the 2100 MHz band is provided by a joint venture between Telstra and Three , whereby Telstra acquired half of Three's radio network and pays half of expansion/maintenance costs. This has enabled Three customers to gain access to the GSM network where 3G coverage is non existent via a reciprocal agreement. Telstra was one of the only regional providers to provide I-Mode services (running on GSM/GPRS and 3G 2100 MHz WCDMA on one particular handset), licensed from NTT DoCoMo. Telstra no longer sells i-Mode, and this service will no longer be available to existing customers after December 10 2007 , with current customers being able to recontract with a new handset without incurring early termination charges. With the launch of the Next G network, Telstra now offers more advanced value added services such as mobile TV (branded Foxtel), and other generic internet services (BigPond Mobile, formerly Telstra Active). Historically, Telstra attempted to break through to the value added services such as video streaming and content via its CDMA/1xRTT network with a service called Telstra MobileLoop. This offering was not commercially successful, and was abandoned in favour of a GSM i-Mode offering, and later Telstra Active 3G services which has now become Bigpond Mobile services and operates on the GSM, 3G 2100 and Next G networks. Telstra also is the only Australian mobile network provider supporting EDGE . {Link without Title} Internet (Telstra BigPond) Telstra Wholesale Due to their ownership of existing copper phone lines and telephone exchanges, Telstra Wholesale is the incumbent and dominant wholesaler of ADSL related services to other Internet Service Providers. They installed the first DSLAM s in exchanges prior to 2000, and began wholesaling access in late 2000.1 Broadband Telstra, through its retail Internet Service Provider, BigPond , sells broadband internet access via ADSL , HFC Cable , Fibre , Satellite , and Wireless access through its EV-DO and Next G networks. At the end of the 2007 financial year BigPond had over 2 million broadband subscribers Annual Report 2007 - Full Year Results and Operations Review (Page 46) . The existing customer base of Bigpond Wireless is currently being migrated over to the Next G network, which offers higher speeds and greater coverage. On November 10 2006 , Telstra made two major changes to their ADSL network. The first was an increase of the cap of wholesale ADSL speeds offered from 1.5 Mbit/s/256 kbit/s to 8 Mbit/s/384 kbit/s. Telstra also released an ADSL2+ broadband service offering speeds of up to 24 Mbit/s from exchanges where competitors are already offering ADSL2+ services. "Because of regulatory constraints, the up to 20 Mbit/s service would be limited to {Link without Title} exchanges where competitors are also offering those higher speeds," says Justin Milne, Telstra's group managing director of its BigPond division. Telstra does not wholesale its ADSL2+ product. See also Internet In Australia . Dial-up Telstra, through its retail Internet Service Provider, BigPond , sells dialup internet access, which is also offered as a Pre-Paid service. Subscription television Telstra's Hybrid Fibre Coax (HFC) Cable network is one of the delivery systems used by the Australian Subscription Television provider Foxtel , 50% of which is owned by Telstra. Telstra also resell Foxtel's "Digital" products in Foxtel's service area (as Foxtel by Telstra) and Austar 's "Digital" product, in Austar's service area (as Austar by Telstra). Directories and advertising (Sensis) Sensis : is Telstra's wholly owned advertising and directories arm. Sensis publishes Australia's White Pages and Yellow Pages telephone directories, and in 2004 purchased the ''Trading Post'', a classified advertising periodical. In addition, they manage several websites:
Sensis are also responsible for all of Telstra's telephony directory assistance, from basic 1223 (National Directories), 12455 (Call Connect), 1225 (International Directories) and premium (1234.) MARKET POSITION AND POWER Telstra's market dominance extends beyond its historical PSTN voice and private data business, into newer markets such as Internet Access, Hosting, and Colocation services. In spite of competition from both foreign and domestic challengers, the former PTT is perceived to have retained a strong grip on many of the country's most profitable customers. Optus remains the company's nearest rival for lucrative business networks. However, Telstra supplies almost twice as many customers in the ASX200 with Dedicated Internet Access services. Telstra is criticised as being monopolistic and anticompetitive by its competitors, and continues to regularly clash with the ACCC (Australian Competition and Consumer Commission) on many allegedly anti-competitive fronts. This topic is the subject of some discussion in investing circles. |
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