AustLit

TELSTRA

The Postmaster-General’s Department (PMG) had responsibility for domestic Post, Telephone and Telegraph operations in Australia from Federation. In practice, international telegraph and telecommunications services were contracted to Amalgamated Wireless (Australasia) Ltd (AWA) in 1922 and service were provided by AWA between 1926 and 1946, when the Overseas Telecommunications Commission (OTC) was formed to take over the international telecommunications service.

The Australian Telecommunications Commission (ATC) was formed in 1975 when the PMG split its services, with mail going to Australia Post and domestic telecommunications to Telecom Australia. In 1989, the ATC became the Australian Telecommunications Corporation but continued trading as Telecom Australia. OTC and Telecom Australia merged in 1992 as part of the start of a ‘managed duopoly’ to form the Australian and Overseas Telecommunications Corporation, renamed ‘Telstra’ in 1993—although Telstra branding was only used domestically from 1995. The Australian satellite operator AUSSAT was granted a telecommunications licence and offered for sale: it was bought by Optus.

Optus resold Telstra’s analogue mobile service and provided competitive fixed-line services. Telstra, Optus and Vodafone each provided digital mobile services after Vodafone won the third mobile licence in 1993. Hutchison has provided 2G services with the ‘Orange’ CDMA network in Sydney and Melbourne and 3G services branded as ‘3’. Telstra initially entered into a joint venture with Hutchinson to deliver 3G services. Hutchison and Vodafone merged in 2009 and now trade as Vodafone.

Telstra built a second-generation (2G) digital mobile network using the GSM standard and replaced the analogue network with a different technology (CDMA) 2G digital mobile network in 1999. After the launch of its NextG network using third-generation (3G) UMTS technology in 2006, Telstra closed the CDMA network in 2008. Telstra has continued with the delivery of mobile voice and data services, and now has an extensive network using 3G and Long Term Evolution (4G) services.

Telstra uses its large optical fibre-based backbone network to provide data, internet and telephony services. It acquired a substantial portion of Australia’s domestic internet in 1995 when the Australian Vice-Chancellors’ Committee ceased providing commercial internet access.

Telstra’s local loop has remained mainly copper, although it also has the most extensive hybrid fibre-coaxial (HFC) cable network which passes about 2.5 million homes and is used to deliver Foxtel services. Telstra owns 50 per cent of Foxtel with the balance held by News Corp. It provides fixed broadband services using the copper network and the HFC. Telstra is the leading provider of fixed broadband services using the technology known as Asymmetric Digital Subscriber Line (ADSL). Telstra’s broadband over HFC service uses Data Over Cable Service Interface Specification version 3 (DOCSIS 3.0).

Telstra was part privatised in three tranches. One-third of Telstra was sold in 1997, a further 16 per cent in 1999 and 31 per cent in 2006. The balance of 17 per cent was held by the Future Fund (a sovereign wealth fund to finance public servant superannuation). The Future Fund has sold down its stake to a level that is not ‘overweight’.

In 2011, Telstra entered into definitive agreements with NBN Co and the government to lease and sell infrastructure required to construct the National Broadband Network. In 2012, Telstra gave a Structural Separation Undertaking (SSU) to the Australian Competition and Consumer Commission (ACCC), which committed Telstra to become a wholesale customer of NBN Co and not to use its own local loop infrastructure to provide both wholesale and retail services. The SSU has extensive migration provisions and there is a Migration Plan, which was also accepted by the ACCC.

The SSU positions Telstra as a retail-focused business in the provision of fixed-line services as well as being the largest provider of mobile services competing with Optus and Vodafone. Telstra offers a range of retail media services that are usually bundled with voice and internet access services. These include packages that use Internet Protocol (IP) delivery using the Telstra T-Box as well as Foxtel services. The Foxtel services delivered to wireless devices (such as Foxtel Go, Presto and Foxtel Play) and set-top boxes (Foxtel on demand services) do not incur download charges when they are delivered using the Telstra network.

REFs: J. Given, ‘Talking Over Water: History, Wireless and the Telephone’, MIA, 125 (2007); M. McCutcheon and J. Given, ‘Audiences as Consumers: Broadcasting Meets Telecoms’, Telecommunications Jnl of Australia, 59 (3) (2009).

ROB NICHOLLS