TELSTRA

'Telstra Corporation' (, , ) (formed from '''Tel'''ecom Au'''stra'''lia) is an Australian 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 unions 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.

The Telstra logo used in conjunction with the Next G project rollout.

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^[3] and the uptake of mobile telephony increases.

A typical Telstra payphone

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 public telephones. It was announced^[4] that Telstra would remove many of the phones, citing unprofitability due to vandalism and the increasing takeup and use of mobile telephones.

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 2005, Telstra announced that it would replace their CDMA network with a new UMTS network incorporating HSDPA running at 850 MHz, later to be known as Next G. 850 MHz was chosen over the usual 3G 2100 MHz as it can cover much greater geographic distances. This network was implemented under contract by Ericsson 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 ^[5], 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.[4]

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 DSLAMs in exchanges prior to 2000, and began wholesaling access in late 2000.^[6]

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 ^[7]. 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 [telephone] 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:

★ Invizage: a provider of outsourced IT services

★ Trading Post: Classified in Print, online and mobile

★ Yellow Pages Online: an additional revenue source compared to print

★ Sensis.com.au: an Australian search engine

★ WhereIs.com: online maps and street directories

★ CitySearch: city-based lifestyle and entertainment guide

★ GoStay: online accommodation booking

★ LinkMe: business networking directory

★ JustListed: a real estate site focused on the Sydney market

★ Home at Yellow: a home improvement website

★ SouFun: a China-based property website
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

Market share data, Sept 2005

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.

Fibre-to-the-node (FTTN)

Telstra is advocating the development of a nationwide FTTN network which, in conjunction with VDSL2 technology, would enable up to 100 MBit/s symmetric download and upload speeds to the home. Competitors, such as the G9, have proposed similar developments, with both Telstra and G9 making progress on various fronts including political and regulatory expectations and funding.
Telstra has indicated that it will not proceed with building the network until it receives regulatory certainty that it will not be forced to wholesale FTTN access to competitors at rates it believes are unfair.

Advocacy and Debate

Since the arrival of CEO Sol Trujillo, Telstra has become very politically active. Managing Director of Public Policy, Phil Burgess, has publicly decried the condition of government regulation in Australia, claiming it stifles technical innovation. Burgess famously remarked that he "wouldn't recommend Telstra shares to his mother".
Burgess led the development of NowWeAreTalking, a web site where Telstra provides its own views on regulation. This in turn led a group of Telstra's competitors calling themselves T4 to set up a web site in response, known as Tell The Truth Telstra. ^[8]
In February 2007, Telstra launched the Broadband Australia Campaign. This campaign is intended to increase public awareness in broadband, and again set forth Telstra's views on regulation.
On May 17th, 2007, The Australian Treasurer, Peter Costello, said that he has never seen a company in Australia attack the independent ACCC in the way that Telstra has done. [5]

Employment

Empty cells have no data available for that year. All results at 30 June.

'Year'	'Domestic full-time staff'	'Full-time staff and equivalents'	'Total workforce'	'Reference'
1995	73,307	86,885		Annual Report
1996	76,522	88,995		Annual Report
1997	66,109	76,990		Annual Report
1998	57,234	66,760		Annual Report
1999	52,840			Annual Report
2000	50,761	53,055		Annual Report
2001	44,874	48,317		Annual Report
2002	40,427	44,977		Annual Report
2003	37,169	42,064		Annual Report
2004	36,159	41,941		Annual Report
2005	39,680	46,227	52,705	Annual Report
2006	37,599	44,452	49,443	Annual Report
2007	35,706	43,411	47,840	Annual Report

In April 2006, the appointment of Fiona Balfour saw Vish Padmanabhan demoted to his previous role of deputy CIO^[9]
On 6 February 2007, Chief Information Officer, Fiona Balfour left the company 10 months after she joined the company from 14 years with Qantas^[10].
Telstra's employment policies have been the subject of some criticism. On ABC's (Australian Broadcasting Corporation) documentary program Four Corners, [6] Telstra Chief Operations Officer Greg Winn was revealed to have stated "''"We run an absolute dictatorship and that’s what’s going to drive this transformation and deliver results… If you can’t get the people to go there and you try once and you try twice… then you just shoot ‘em and get them out of the way… " ''

International expansion

Telstra has expanded into international markets. Telstra acquired 51% of China's SouFun, a real estate and property website. SouFun will be integrated into the Sensis business and provide Telstra with an entry point into China^[11].
Also notable is a joint venture with Hong Kong entrepreneur Richard Li and his company Pacific Century Cyberworks during the late 1990s telecommunications boom. Their undersea cable venture, Reach, has struggled, with its book value downgraded to zero by the company in February 2003. (It continues to operate, though, and the company believes that it may still be viable in the longer term.)
In 2002, Telstra also acquired PCCW's remaining 40% stake in Regional Wireless Company (RWC), giving it total ownership of CSL, then the most prominent of Hong Kong's six mobile operators. CSL announced in April 2006 that it was to enter a joint venture with New World Mobility Ltd in order to capture a larger share of the market^[12]. CSL comprises just over 75% of the joint venture.
Telstra also fully owns New Zealand subsidiary TelstraClear. The company was formed in 2001 from the merger of subsidiary TelstraSaturn (a 50/50 joint-venture with Austar which had previously acquired ISPs paradise.net and NetLink) and the telco Clear Communications purchased from BT Group plc. TelstraClear also operates a Cable TV brand Saturn.

Sponsorship

Telstra logo up to October 2006.^[13]

Sporting

Telstra has naming rights to two national sporting arenas, the Telstra Dome in Melbourne and Telstra Stadium in Sydney and is the naming rights sponsor to the National Rugby League. Telstra is also the principal sponsor of Swimming Australia.

New Zealand

Telstra also has the naming rights (under TelstraClear) for the TelstraClear Pacific events centre in Manukau City, New Zealand.

References

1. Telstra Sale and Chronology
2. Telstra shareholder - History
3. Annual Report 2006 - Full Year Results and Operations Review
4. Telstra to cut number of pay phones
5. Telstra CDMA Upgrade Page
6. Telstra pressure increases as more ISPs join ADSL race
7. Annual Report 2007 - Full Year Results and Operations Review (Page 46)
8. Competitors hit back at Telstra's 'misinformation' campaign Stuart Corner
9. http://www.zdnet.com.au/news/business/soa/Westpac_hires_ex_Telstra_CIO/0,139023166,339273836,00.htm.
10. http://www.australianit.news.com.au/articles/0,7204,21183574%5E15306%5E%5Enbv%5E,00.html
11. Telstra Media Release: SouFun acquisition complements Sensis growth strategy
12. CSL Corporate Profile
13. Telstra Brand

Data

★ Yahoo! - Telstra Corporation Limited Company Profile

★ Telstra Corporation stock performance chart from Gstock

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