Telstra

From Academic Kids

Template:Infobox Company Telstra Corporation Template:Asx is an Australian telecommunications company, holding a superdominant position in landline telephone services, large share of mobile phone services, domestic consumer (including dial-up access and "broadband" cable modem, satellite and ADSL services under the BigPond and Hypermax brands) and business data services, and cable television. Despite some setbacks, Telstra remains one of the most profitable telecommunications companies in the world.

Contents

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. It has since been partially privatised but as of mid-2005 remains majority government-owned. Telstra began to establish its new identity and to disengage from its previous trading identities.

Telstra has faced competition since the late 1980s from Optus 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. Competing telecommunication companies have constantly accused Telstra of overcharging for wholesale access to their networks (notably for ADSL, allegedly to protect their cable-modem broadband product); the ACCC has often agreed but decisions by the regulator are very slow.

Privatisation

Telstra was partially privatised by the coalition government in the late 1990s, but it is still 51.8% owned by the government, which would like to divest the remaining portion but has thus far been blocked: both by a hostile Senate, and because of financial and electoral considerations.

Earlier partial floats attracted a great deal of public interest but have been spectacularly poor investments, a majority of which was caused by global sentiment about telecommunications companies first inflating, and then just as quickly deflating the share price. There seems no immediate prospect of the share price climbing back to the level at which the earlier shares were originally sold.

The Australian Labor Party (the ALP), the major opposition party, has consistently opposed full privatisation and continues to do so. Their official party platform also notes a desire for the wholesale and retail arms of Telstra to be more "clearly distinct" within the company to enable fairer competition with private telecommunications providers who use Telstra's lines. In the past, Labor Party figures (including Lindsay Tanner) have floated the idea of a breakup of the company into separate retail and wholesale businesses, though this proposal was dropped after opposition from unions. The Australian Greens, the Australian Democrats and key Senators Meg Lees and Len Harris hold similar positions to the ALP, which meant that until the 2004 elections any bill for full privatisation was guaranteed to fail in the Senate.

However, after the October 2004 elections, the Coalition gained control of the Senate. The government has indicated that it will introduce legislation to enable the full sale in its new term. However, it is still not certain that such a bill will succeed; the minority coalition partner, the National Party of Australia, has a number of parliamentary representatives who have publicly opposed the sale. 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. Additionally, rural voters feel that a privatized Telstra will neglect its unprofitable and less profitable rural networks, placing further pressure on the National Party not to support the sale.

Ownership

International expansion

Telstra has attempted to expand into international markets. More 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, the most prominent of Hong Kong's six mobile operators.

Telstra also owns a New Zealand company, TelstraClear, which has acquired Clear Communications, another telco, Cable TV provider Saturn and internet service provider paradise.net.

For marketing reasons, two national sporting arenas bear the name Telstra. They are the Telstra Dome in Melbourne and Telstra Stadium in Sydney.

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