Telstra

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Telstra Corporation
Type Public (ASX:TLS, NZX: TLS)
Founded As part of the PMG - 1901

Telecom Australia - 12 June 1975[1]

As Telstra Corporation - 6 November 1996[2]
Headquarters Flag of Australia Melbourne, Australia
Key people Donald McGauchie, Chairman Solomon Trujillo, CEO
Industry Telecommunications
Products Voice
Mobile
Internet
Cable Television
Revenue ▲ $23.7 billion AUD (2007, [1])
Profit ▲ $3.28 billion AUD (2007, [2])
Employees 35,706 full time (June 2007, [3])
Website telstra.com

Telstra or Telstra Corporation (often abbreviated as Telstra Corp), (ASX:TLS, NZX: TLS)is an Australian telecommunications and media company, formerly state-owned. Telstra is the largest provider of both local and long distance telephone services, mobile services, dialup, wireless, DSL and cable internet access in Australia. Telstra is based in Melbourne, Victoria, Australia. Formerly Telecom Australia, the company was renamed Telstra as the name Telecom was seen as too common. Since 1995 the company has continued to trade both domestically and internationally under the Telstra brand, even after being privatised in 2006.

Contents

[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. 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.

[edit] Privatisation

Telstra was privatized in 3 different stages, informally known as T1, T2 and T3 in 1997, 1999 and 2006[3] In T1, the government sold 1/3rd of its shares in Telstra for $14 Billion[4] In 1999 a further 16% of Telstra shares were released to the public and sold, leaving the Government with 51% ownership. In 2006, T3 was announced by the government and was the largest of the three public releases, reducing the Government's share in Telstra to 17%.[5]

[edit] Services

[edit] Home Phone

Rural Telstra exchange building, located in Karawinna, Victoria.
Rural Telstra exchange building, located in Karawinna, Victoria.

Telstra is Australia's dominant and largest provider of Fixed Line services. These include home phone, business and other PSTN products. Due to Telstra owning the majority if not all of Australia's copper network, this has allowed them to become the dominant provider of these services.

Telstra outsources a significant portion of network installation and maintenance to private contractors and Joint Ventures, such as ABB Communications and STCJV (Siemens Thiess Communications Joint Venture).

Telstra also owns and maintains the majority of Australia's public telephones. It was announced[6] that Telstra would remove many of the phones, citing unprofitability due to vandalism and the increasing takeup and use of mobile telephones.

[edit] Telstra Mobile

Telstra mobile phone Base station in Wireless Hill, Ardross, Western Australia.
Telstra mobile phone Base station in Wireless Hill, Ardross, Western Australia.

Telstra Mobile is Australia's largest mobile telephone service provider[citation needed], in terms of both subscriptions and coverage. Telstra operates Australia's largest GSM and 3G UMTS (branded as NextG) mobile telephony networks in Australia[7], as well as holding a 50% stake in the 3GIS Ltd 2100MHz UMTS network infrastructure, shared with Hutchison (Three)[citation needed]. As of September 2007, Telstra has an estimated 9.3M mobile subscribers [8]. Telstra Mobile services are available in post-paid and prepaid payment types, known as Telstra Pre-Paid Plus (formerly communic8)[citation needed].

Next G, Telstra's primary 3G UMTS mobile network, built between November 2005 and September 2006, opened in October 2006. The Next G network is the largest mobile network in Australia, providing coverage over 100 times greater than any other 3G provider and over 3 times larger than any 2G provider in Australia[9]. The NextG Network is also the fastest cellular network in the world, delivering network speeds of up to 14.4Mbit/s in the downlink.[9].

The NextG network operating on the 850MHz band was built to replace Telstra's CDMA network which operated from 1999 until April 28, 2008[citation needed]. The 850 MHz band was chosen over the more common 2100 MHz band as it can cover much greater geographic distances for a lower overall investment[citation needed]. This network was implemented under contract by Ericsson as part of a project internally dubbed "Jersey" and launched on 6 October 2006[citation needed]. HSPA technology was included in the network to provide Australia's first wide area wireless broadband network. The efficiency of the Next G network and its coverage has been challenged and scrutinised since its launch, causing Telstra to go back to areas with average coverage, particularly rural towns to improve its coverage footprint[citation needed]. On January 18, 2008, Hon Stephen Conroy, Minister for Communications knocked back the proposal for Telstra to switch off its CDMA network on January 28, 2008, saying that whilst the new network provided coverage equal to or better than the CDMA network, the range of handsets available was not yet satisfactory'.[10]. The final approval was given by the minister on the 15th of April to close the CDMA network after April 28, 2008 [11]. Telstra closed the network nationally during the early morning hours of April 29, 2008[12].

Telstra's GSM network was the first digital mobile network in Australia. It was launched in April 1993 on the 900MHz band[13]. The GSM network has carried the majority of Telstra's mobile subscribers for the last 10 years and has seen numerous upgrades[citation needed]. 1800MHz capacity channels were added to the network in the late 1990s as well as GPRS packet data transmission capabilities. As part of the UMTS NextG deployment, the GSM network was also upgraded to a full EDGE data transmission capability in 2006 providing data transmission capabilities greater than 40kbit/s on its GSM network[14].

In 1981, Telstra (then Telecom Australia) was the first company to provide mobile telephony services in Australia[citation needed]. The first automated mobile service operated in the major capital cities on 500MHz using the '007' dialing prefix. This network only provided "car phone" capabilities to subscribers as portable handheld terminals were not practical at that time. The first cellular system in Australia offering portable handheld phones was launched by Telstra in 1987 using the AMPS analogue standard on the 800MHz band. This network at it's peak had over 1 million subscribers, but was mandated by the government to be closed down by the year 2000, partially due to privacy concerns which resulted from the AMPS technology, but also because of arrangements undertaken to secure sufficient interest in the GSM network licenses offered in 1992 to competitors. A license condition placed on Telstra to maintain an equivalent coverage footprint at the time resulted in Telstra deciding to deploy an IS-95 CDMA based network in its place.

Telstra has made a number of attempts to find a market for mobile data products based on its cellular networks in recent years. Early examples were based on the GPRS capability added to their GSM network and consisted of a WAP text based information service. Telstra further 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. 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 is no longer available to existing customers as of 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).

Today, Telstra can claim to have found a market for it's mobile data offerings, announcing in January 2008 that it has for the first time had mobile data revenue exceed that received from SMS. [15]

[edit] Internet

Telstra provides internet subscription and various internet services (such as IP networking, email, servers, and hosting) through its range of ISP companies.

  • Telstra Internet Direct provides internet subscription, services (such as IP networking and email) to businesses, government and enterprise. Telstra Internet Direct is mainly focused on business customers and does not sell its products to residential customers unless they have an ABN (Australian Business Number)
  • Telstra BigPond provides internet subscription (Cable, ADSL, Wireless and Dialup) for residential customers as well as small business. BigPond is Australia's largest internet service provider with over 2 million subscribers.
  • Telstra Wholesale resells or leases Telstra's range of products to other companies for a fee. Such products are internet ports and exchange space for servers.

[edit] Wholesale

Telstra Wholesale[16] provides products such as Data, Mobile, Voice, and other Facilities (such as Colocation and Duct Access)[17] to other companies and organisations for re-sale.[18]. Telstra Wholesale also provides operational support for its customers[19], and facilities for international customers such as International Data Transport and IP Transport[20].

Due to their ownership of most if not all existing copper phone lines and telephone exchanges in Australia, 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.[21] Telstra wholesales all ADSL (ADSL 1) products for Australia, as it is the only company which has ADSL1 ports in its exchanges. Telstra has more ADSL coverage than all other ISP's combined.

[edit] BigPond

Main article: BigPond

Telstra owns and operates the largest cable internet network in Australia. Telstra Cable operates in the main cities of Australia (Sydney, Melbourne, Brisbane, Perth and Adelaide as well as the Gold Coast), providing downstream speeds of up to 30 Mbit/s in selected areas. Telstra provides internet services for personal and business clients, through its internet service provider (ISP), BigPond. BigPond provides internet products such as:

At the end of the 2007 financial year BigPond had over 2 million broadband subscribers.[22] 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. Telstra does not wholesale its ADSL2+ product.

On Wednesday 6 February 2008, Telstra issued a press release announcing that it would activate high-speed ADSL2+ broadband in a further 900 more telephone exchanges serving 2.4 million consumers across every state and territory, claiming it has received assurances from the Government that it will not be forced to wholesale these services to other providers, saying that the move came "after the Government made clear it did not consider a compelling case had been made for regulating third-party access to the service – an assurance sought by Telstra for more than one year."[23]

[edit] Criticisms

Bigpond rates poorly in independent customer satisfaction surveys, in both customer service and value for money. Choice Magazine in October 2007 found Bigpond the worst provider for both ADSL and Wireless internet, with Westnet first for ADSL for overall customer satisfaction.[24] A previous survey found less than a third found Bigpond to be good value for money and just as few would recommend Bigpond to a friend.[25] In this survey, Bigpond came second last, with Dodo coming last and Westnet first.[26] Bigpond is criticised for charging $150 per GB excess charges on some of its broadband plans, and for counting uploads in the monthly download allowances.

According to Alexa statistical analysis of Yellow Pages traffic, Yellow Pages online website traffic is dramatically down over the last year.[27]

See also Internet in Australia.

[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. Telstra owns 50% of Foxtel, in a joint venture. Telstra also resell Foxtel's "Digital" products in Foxtel's service area (as Foxtel from Telstra) and AUSTAR's "Digital" product, in AUSTAR's service area (as AUSTAR from Telstra).

Although Telstra does not own any share in AUSTAR, it holds the right to resell its products. Telstra has deals for current Telstra full-service customers, that either have a home phone, internet or mobile with Telstra, or a bundle of multiple Telstra services, who choose to sign up to Foxtel. Such discounts include free installation + the first month of the best Foxtel package (all channels) for free[28]

[edit] Directories and advertising (Sensis)

Sensis: is Telstra's wholly owned advertising and directories arm. This subsidiary was originally known as Pacific Access (since 1991), before changing its name to Sensis in August 2002[29]. 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:

Sensis are also responsible for all of Telstra's telephony directory assistance, from basic 1223 (National Directories), 12456 (Call Connect), 1225 (International Directories) and premium (1234.)

[edit] Market position and power

Market share data, September 2005
Market share data, September 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.

[edit] 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.

[edit] 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[30]

On 6 February 2007, Chief Information Officer, Fiona Balfour left the company 10 months after she joined the company from 14 years with Qantas.[31]

Telstra's employment policies have been the subject of some criticism. On ABC's (Australian Broadcasting Corporation) documentary program Four Corners, [4] 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... "

[edit] International expansion

Telstra has expanded into international markets.

  • 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.[32]
  • 50% of Reach, an Asian undersea cable venture, with Pacific Century Cyberworks. This partnership was created during the late 1990s telecommunications boom - it struggled and had its book value downgraded to zero by Telstra in February 2003. Reach's debt was renegotiated in 2004 and it was restructured to operate mainly as a vehicle for its owners' international requirements.
  • 76.4% of New World Mobility, the largest mobile operator in Hong Kong with 34% of the market in 2006. Telstra originally acquired 60% of CSL (the former Hong Kong Telecom's mobile arm) from Pacific Century Cyberworks, then the remaining 40%, before merging it with New World Mobility.[33]
  • 100% of TelstraClear, New Zealand's second largest telecommunications provider. It has its own fibre networks in major cities, is building regional fibre backhaul, has a hybrid fibre-coax network providing phone, internet, & TV services (in Wellington, Christchurch and Kapiti), and resells Telecom New Zealand's phone & data services nationwide (including a mobile agreement). 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.
  • Telstra Europe - The Telstra Group has been operating in Europe since 1992. Telstra Europe has a customer base of over 7000 customers, who buy data, voice and complex managed network and hosting services [5].

[edit] Sponsorship

Telstra logo up to October 2006.
Telstra logo up to October 2006.[34]

[edit] Sporting

Telstra has naming rights to the Telstra Dome in Melbourne and is the naming rights sponsor to the National Rugby League premiership. Telstra is also the principal sponsor of Swimming Australia. They also sponsored Minardi for the 2002 F1 season.

[edit] New Zealand

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

[edit] References

  1. ^ Telstra Sale and Chronology
  2. ^ Telstra shareholder - History
  3. ^ Telstra Privatization Facts
  4. ^ Telstra Privatization Facts
  5. ^ Government's final share in Telstra
  6. ^ Telstra to cut number of pay phones
  7. ^ About Telstra - Fact Sheet - Mobiles.
  8. ^ Telstra Reports 2 Million Hsdpa Subscribers. cellular-news. Retrieved on 2008-04-05.
  9. ^ a b Telstra to make Next G biggest, fastest in world. The Age. Retrieved on 2008-04-05.
  10. ^ Conroy order delay of CDMA closure
  11. ^ CDMA Network to close on 28th April 2008
  12. ^ Cool reception for Next G network as CDMA service ends
  13. ^ GSM Roaming Australia.
  14. ^ EDGE Databank.
  15. ^ Telstra mobile revenue soars | AustralianIT
  16. ^ http://telstrawholesale.com//index.htm Telstra Wholesale Website
  17. ^ http://telstrawholesale.com//products/index.htm Telstra Wholesale Products and Sollutions
  18. ^ http://telstrawholesale.com//dobusiness/become-a-customer/become-a-customer.htm Information on becoming a TW customer
  19. ^ http://telstrawholesale.com//operationalsupport/index.htm Telstra Wholesale Operational Support
  20. ^ http://telstrawholesale.com//products/international/index.htm Telstra Wholesale International
  21. ^ "Telstra pressure increases as more ISPs join ADSL race", Whirlpool (website), 2000-09-05. Retrieved on 2006-10-14. 
  22. ^ Annual Report 2007 - Full Year Results and Operations Review (Page 46)
  23. ^ Stuart Corner, ITwire, Telstra ADSL2+ 'spin' is breathtaking
  24. ^ CHOICE - ISP satisfaction survey
  25. ^ Telstra's BigPond bombs out with consumers | NEWS.com.au
  26. ^ Telstra's BigPond bombs out with consumers | NEWS.com.au
  27. ^ yellowpages.com.au - Traffic Details from Alexa
  28. ^ Foxtel Summer Deal by Telstra
  29. ^ Sensis Pty Limited (2002-08-19). Pacific Access launches new corporate brand - Sensis. Press release. Accessed on 2008-03-08.
  30. ^ http://www.zdnet.com.au/news/business/soa/Westpac_hires_ex_Telstra_CIO/0,139023166,339273836,00.htm.
  31. ^ Balfour leaves Telstra | Australian IT
  32. ^ "Telstra Media Release: SouFun acquisition complements Sensis growth strategy", Telstra Corporation Ltd. 
  33. ^ "CSL Corporate Profile", Hong Kong CSL (website). 
  34. ^ Telstra Brand
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