Telstra

From Wikipedia, the free encyclopedia

Telstra Corporation

Type	Public (ASX: TLS, NZX: TLS & NYSE: TLS)
Founded	As part of the PMG - 1901 As Telecom Australia - 12 June 1975 [1] As a company - 6 November 1991 [2]
Headquarters	Melbourne, Victoria, Australia
Key people	Donald McGauchie, Chairman Solomon Trujillo, CEO
Industry	Telecommunications
Products	Voice Mobile Internet access Pay TV
Revenue	$22.8 billion AUD (2006, [3])
Net income	$3.18 billion AUD (2006, [4])
Employees	37,599 full time (June 2006, [5])
Website	www.telstra.com

Telstra Corporation (ASX: TLS, NZX: TLS, NYSE: TLS) (formed from Telecom Australia) is an Australian telecommunications company under private ownership, holding a dominant position in landline telephone services, 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) and business data services, and cable television.

[edit] 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.

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.

[edit] Privatisation

The neutrality of this article is disputed.
Please see the discussion on the talk page.
This article has been tagged since November 2006.

Telstra was partially privatised by the Commonwealth Government in two public offerings in 1997 and 1999. As of 20/11/2006, Telstra became majority privately-owned, with the government's 51.8% stake reduced to roughly 17% 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.

Solomon Trujillo as the current CEO of Telstra

Telstra remains a company that has struggled to maximise shareholder value. In the past two years, but especially since the appointment of American Sol Trujillo as CEO, the share price has fallen and risen based mostly on regulatory and governmental decisions affecting the company's operatons.

[edit] Services

Some information in this article or section is not attributed to sources and may not be reliable.
Please check for inaccuracies, and modify and cite sources as needed.

[edit] Fixed-line services

Telstra own and operate most PSTN services in Australia. Most of Telstra's revenues are generated from fixed-line services, but Telstra recently issued a profit warning due to declined growth in the fixed line market. A shift from their fixed line services is underway as local call volume falls.^[1]

A typical Telstra payphone

Telstra outsources a significant portion of network installation and maintenance to private contractors and businesses, such as ABB Communications and STCJV.

Telstra is also responsible for Australia's public phones, and was announced^[2] they would remove many of the phones citing unprofitability due to vandalism and the increasing takeup and use of mobile phones.

[edit] Mobile telephony (Telstra Mobile)

Telstra operates the largest GSM, CDMA and 3G mobile telephony networks in Australia.

Mobile services are available in post-paid and prepaid payment types. Telstra provide GSM Prepaid Mobile services, via Telstra Pre-Paid Plus. This was a service by the former name of Communic8.

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. 850Mhz was chosen over the usual #g 2100Mhz 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 early 2008, however, migration onto the Next G network has already begun for customers who have expiring contracts. Despite this, Telstra has also currently expanded their GSM capabilities by offering EDGE.

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), licensed from NTT DoCoMo. With the launch of the Next G network, value added services such as mobile TV have been branded Foxtel, and other generic internet services Bigpond. Whether Telstra will continue to use the i-Mode branding is unclear.

Previously 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 the Telstra MobileLoop. This offering was not popular, and was abandoned in favour of a GSM iMode offering, and later Next G.

[edit] Internet (Telstra BigPond)

[edit] Telstra Wholesale

Due to their ownership of existing copper phone lines and telephone exchanges, Telstra 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.^[3]

On the 10 November 2006, Telstra finally launched uncapped ADSL1 and ADSL2+ broadband services, more than 18 months after some competitors started offering the higher speed services. The uncapped ADSL will allow speeds of up to 8Mbps. ADSL2+ allows speeds of up to 24Mbps, but Telstra is advertising the service at up to 20Mbps. However, unlike other ISPs, Telstra also limit the upload speed, to 384kbps for their 'up to 8Mbps' plans, and 1000kbps for their 'up to 20Mbps' plans.

"Because of regulatory constraints, the up to 20Mbps 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.

[edit] 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 NextG networks. Telstra has over one million retail ADSL customers, and over 200,000 Cable customers. The existing customer base of Bigpond Wireless is currently being migrated over to the NextG 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 1.5Mbps/256kbps to 8Mbps/384kbps. These increased speeds were available from Bigpond on the same day, and will be available through other ISPs in December 2006. Telstra also released an ADSL2+ broadband service offering speeds of up to 20Mbps from exchanges where competitors are already offering ADSL2+ services.

[edit] Dial-up

Telstra, through its retail Internet Service Provider, BigPond, sells dialup internet access.

[edit] 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 and Austar's "Digital" product, in Austar's service area.

Telstra's ownership of Foxtel has in the past come under fire from the Australian Labor Party (ALP).^{[citation needed]}

[edit] 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.)

[edit] 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 has retained a strong grip on many of the country's most profitable customers.

Optus remains the companies' closest rival for lucrative business networks. However, Telstra supplies almost twice as many customers in the ASX200 with Dedicated Internet Access services.

Telstra is criticised by some competitors as being the dominant Telco player, and competition companies use the power of the ACCC (Australian Competition and Consumer Commission) to regularly force Telstra to justify prices and costs. The copper network forms the backbone of Telstra and is the property of Telstra. Competitor companies continue to complain that they want more direct access to it. Some say the solution is for those companies to be truly competitive and build their own network instead of riding on the assets of Telstra. Obviously the cost of such an undertaking would be considerable, and the status quo does seem to lend Telstra an unassailable (and arguably unfair) market advantage in many fields. This argument is the subject of much discussion in investing circles and the general public.

[edit] Fibre-to-the-node (FTTN)

Telstra is advocating the development of a nationwide FTTN network which, in conjunction with VDSL2 technology, would be enable up to 100MBit/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 unfair rates dictated to them by the ACCC.

[edit] Advocacy

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 and how it stifles technical innovation. Burgess famously remarked that he "wouldn't recommend Telstra shares to his mother".

Burgess led the devlopment of NowWeAreTalking, a web site where Telstra provides its own view on regulation and its inability to innovate.

In February 2007, Telstra launched the Broadband Australia Campaign. This campaign is intended to increase public awareness in broadband, and prove that Telstra should not be forced to build faster networks without being able to charge reasonable rates.

[edit] Employment

Empty cells have no data available for that year. All results at 30 June 2006.

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

In April 2006, the appointment of Fiona Balfour saw Vish Padmanabhan demoted to his previous role of deputy CIO^[4]

On 6 February 2007, Chief Information Officer, Fiona Balfour left the company 10 months after she joined the company from 14 years with Qantas^[5].

[edit] 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^[6].

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^[7]. 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.

[edit] Sponsorship

Telstra logo up to October 2006, currently being phased out.

[edit] 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.