J.E.Flinn

Continued from Part One....

The Postmaster General Split

By 1975, the telephone services were subsiding unprofitable postal services, in turn “starving” the telephone network of the money needed for the growing technology. Thus the Commonwealth split the PMG into two departments: Telecom Australia and Australia Post (Australian Heritage Commission, 2003).
Also known as the Telecommunications Act 1975, this “established a commission for the purposes of planning, establishing, maintaining and operating telecommunication services within Australia” (DuVe, 2005).
The title given to the commission was the Australian Telecommunications Commission, or ATC. They traded as Telecom Australia.

Change of Hats

The Australian Telecommunications Corporation Act 1989 reconstituted the ATC to the Australian Telecommunications Corporation. Still trading as Telecom Australia, the principle function of Telecom is to supply telecommunications services within Australia. A subsidiary function is to carry on, outside Australia, any business or activity relating to telecommunications.
Telecom was given the power to “do all things necessary or convenient to be done for, or in connection with, the performance of its functions” as stated in Section 15-17 of the Australian Telecommunications Corporations Act of 1989. Telecom Australia was roughly 50% owned by the government at the time. This act set the functions and powers of Telecom as a corporation.

Merging into the Telstra Brand

Telecom Australia was incorporated as an Australian public limited liability company in 1991. The Australian Telecommunications Corporation merged with another government body, the Overseas Telecommunications Commission, in 1992. This created the Australian and Overseas Telecommunications Corporation, or AOTC, and continued trading under Telecom Australia until 1993. The name “Telstra” was created in 1993 for branding purposes by combing Telecom Australia (Wikipedia, 2007). Telstra Corporation Limited traded internationally as Telstra in 1993, and domestically as Telstra in 1995 (Telstra.com, 2007).

Privatization

In July 1997, Australia’s telecommunication markets were opened up to full competition. By November 1997, Telstra went through a partial privatization where the Commonwealth sold 33 percent of their shares to the public (Telstra.com, 2007). With competition rising from other telecommunication providers, Telstra still held ownership of the fixed-line telephone network, pay-TV, and data cable networks. Optus and Transact are two telecom companies that began to build their own infrastructure.
Another 16.6% of the Commonwealth’s shares of Telstra were offered in September 1999. These shares were then listed on the Australian Stock Exchange, the New Zealand Stock Exchange, and the New York Stock Exchange (Telstra.com, 2007). This gave the Commonwealth 51.8 % ownership of Telstra with the remaining going to private shareholders. With the dot-com boom, Telstra stocks started the twenty first century nearly double of what they are today in 2007 (Yahoo Finance, 2007).
In Novermber 2006, the Commonwealth sold its remaining Telstra shares, known as T3, raising $15.5 billion for the Australian federal government’s Future Fund. This marked one of the biggest days of trading for a company on the Australian Stock Exchange as nearly 1 billion shares flooded the market (Rossi, 2006)
In March 2007, Telstra announced their intention to de-list its American depositary receipts (ADRs) from the New York Stock Exchange. They made plans to move to an over-the-counter ADR program. They will not be listed on any United States exchanges, but will still be listed on the Australian Stock Exchange (Hextall, 2007).

Telstra Today

Telstra is known as Australia’s leading telecommunications and information services company. The Telstra name can be found on two national sporting arenas, one in Sydney and the other in Melbourne. Telstra is a major sponsor of Swimming Australia, Australian Football League, National Rugby League, Surf Life Saving Australia, V8 Supercars, and more.
Providing 9.8 million fixed line services and 9.2 mobile services, Telstra has made a prominent dent in the Australian telecom market. They own and operate approximately 25,000 payphones throughout Australia, 90 percent of which are SMS enabled.
Beyond the historical PSTN line, BigPond is Telstra’s Internet service offering ADSL, cable, fiber, satellite, Wireless and dial-up access. Foxtel is an Australian subscription television provider that is 50% owned by Telstra. Sensis is Telstra’s advertising and directory department, publishing Australia’s White and Yellow Pages as well as many websites. (Telstra.com, 2007)
In recent news, Telstra is battling National ICT Minister Linda Coonan over the $958 million subsidy awarded to OPEL to expand regional broadband infrastructure. Telstra Group General Counsel, Will Irving, said “The ruling allowed the federal government to succeed in keeping secret its reasons for changing the Broadband Connect program without informing all bidders”. He went on to claim “It shouldn’t be this hard to find out why the government spent $1 billion of taxpayers’ money supporting a Singapore-backed proposal that didn’t even achieve the government’s stated aims. They’re either hiding something or didn’t understand the technology choices they were making” (Rossi, 2007).

What This All Means

Telstra’s impact on the growth of Australia is undeniable. Without telecommunications, Australia would be just as isolated today as it was when Captain Cook first landed in 1770. Telstra is a multifaceted telecom company that not only grew with Australia, but also helped Australia grow. Telecommunications continue to shape Australia as well link the land down under to countries across the globe.