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Telecommunications in Australia deals with telecommunications in Australia, involving the availability and use of electronic devices and services, such as the telephone, television, radio or computer, for the purpose of communication.

Telecommunications is an important aspect of the Australian economy. The sector is currently dominated by the telecommunications provider, Telstra. Other telecommunications providers include Optus (owned by Singapore Telecommunications), AAPT and Powertel (both owned by Telecom New Zealand), Soul (SP Telemedia), Vodafone and Hutchison 3G (3 Mobile). The sector is in a state of rapid growth and technological development, and subject to frequent changes of participants in the sector.

Section 51(v) of the Australian Constitution gives the national government power over all postal, telegraphic, telephonic and 'other like services'. The phrase 'and other like services' has empowered the federal government to expand its legislative power with technological developments over time, such as into radio, television and now the internet.

Contents

History

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Early

Following federation, the colonial networks (staff, switches, wires, handsets, buildings etc) were transferred to the Commonwealth and became the responsibility of the first Postmaster-General (PMG), a federal Minister overseeing the Postmaster-General's Department that managed all domestic telephone, telegraph and postal services. With 16,000 staff (and assets of over £6 million) it accounted for 90% of the new federal bureaucracy. That figure climbed to over 120,000 staff (around 50% of the federal bureaucracy) by the late sixties.

Public phones were available in a handful of post offices and otherwise restricted to major businesses, government agencies, institutions and wealthier residences. Eight million telegrams were sent that year over 43,000 miles of line.

A memorial at Narrandera, New South Wales to the "J" trunk route linking the Australian cities and towns on the east coast

There were around 33,000 phones across Australia, with 7,502 telephone subscribers in inner Sydney and 4,800 in the Melbourne central business district. A trunk line between Melbourne (headquarters of the PMG Department) and Sydney was established in 1907, with extension to Adelaide in 1914, Brisbane in 1923, Perth in 1930 and Hobart in 1935.

An old bakelite ash tray showing an example of a single digit phone number used in the early days of telecommunication.

Overseas cable links to Australia remained in private hands, reflecting the realities of imperial politics, demands on the new government's resources and perceptions of its responsibilities. The PMG department became responsible for some international shortwave services - particularly from the 1920s - and for a new Coastal Radio Service in 1911, with the first of a network of stations operational in February 1912. Australia and New Zealand had ratified the 1906 Berlin Radio-telegraph Convention in 1907.

During the 1930s the PMG became responsible for the Australian Broadcasting Commission (ABC). Its management of the telecommunications network echoed the values enshrined by the ABC and the BBC.

In the era of privatization is has been fashionable to backtrack to a time when the PMG was supposedly operated by enlightened technocrats in the national interest and without concerns of profit. That vision is problematical, as it is clear that decisions about the location and management of facilities (switches and service centers) reflected local political demands and the 'Australian Settlement' first articulated by Alfred Deakin.

The PMG was, after all, a major employer in rural areas, the Minister generally came from the Country Party and there was an emphasis on in-house development and local manufacturing. Governments of whatever persuasion used the organisation as a cash cow; it was not a discrete statutory body or company and faced problems in preventing profits from being absorbed by the national consolidated revenue account.

Background to the service:

  • Australia's first telephone service (connecting the Melbourne and South Melbourne offices of Robinson Brothers) was launched in 1879, with the first telephone exchange opened in Melbourne in 1880. Around 7,757 calls were handled in 1884.
  • The Australian networks were government assets operating under colonial legislation modelled on that of Britain. The UK Telegraph Act 1868 for example empowered the Postmaster General to "acquire, maintain and work electric telegraphs" and foreshadowed the 1870 nationalisation of competing British telegraph companies.
  • The nature of the networks meant that regulation in Australia was undemanding: network personnel were government employees or agents, legislation was enhanced on an incremental basis and restrictions could be achieved through infrastructure. All the colonies ran their telegraph networks at a deficit through investment in infrastructure and subsidisation of regional access, generally with bipartisan support.
  • Government-operated post office and telegraph networks - the largest parts of the bureaucracy - were combined into a single department in each colony on the model of the UK Post Office: South Australia in 1869, Victoria in 1870, Queensland in 1880 and New South Wales in 1893.

Deregulation

In Australia the 1982 Davidson Enquiry regarding private sector involvement in delivery of existing/proposed telecommunications services recommended ending Telecom Australia's monopoly. In the preceding year Aussat Pty Ltd, another government agency, had been established to operate domestic satellite telecommunication and broadcasting services.

In practice Aussat's charter restricted it from acting as a competitor to Telecom, including a prohibition on interconnecting public switched traffic with Telecom's network. Aussat's viability was undermined through restrictions on raising capital, of critical importance given tepid government support and increasing costs. It wasn't until 1985 that Australia's first geostationary communications satellite was operational; by late 1990 it had debts of about $400 million.

The Australian Telecommunications Commission was restructured as the Australian Telecommunications Corporation, trading as Telecom Australia, in 1989. That year saw the last domestic telegram handled by Telecom, with responsibility for telegram operations handed over to Australia Post.

Proposals for a merger of Aussat and OTC (thereby permitting national delivery of telecommunication services in competition with Telecom) were rejected in favor of disposal of the satellite operator to a non-government entity that would be allowed to compete with Telecom.

Immediately following the decision that Optus Communications - a private sector entity owned by a consortium that included BellSouth - would be given Australia's second general carrier licence purchased the Satellite assets with many of the Non Satellite Assets remaining with the Government as part of Telstra.

Cable & Wireless, privatised after several decades of UK government ownership, took a controlling stake in Optus in 1998 (under the banner Cable & Wireless Optus) before control passed to SingTel in 2001.

Optus was initially allowed to enter the Australian telecommunications marketplace for national long distance and international telephone calls, with other players prevented from entering the general telephone market until 1997 and 'pro-competition' mechanisms under the Trade Practices Act 1974- such as guaranteed access to Telecom's existing infrastructure on reasonable terms - meant to ensure its viability.

Telstra also faced competition in market niches such as long distance corporate voice and data services, with AAPT (a spinoff of the local AAP financial data/news service) active from 1991. MCI Communications, later absorbed by the ill-fated WorldCom, was an early major shareholder of AAPT but departed in 1994. New Zealand's Todd Corporation took a 24.5% stake in AAPT in 1992. In 1995 AAPT launched a mobile phone service, using Vodafone as its network supplier, acquired a 50% of Australian ISP connect.com.au Pty Ltd and bought NewsNet ITN. In the same year SingTel acquired a 24.5% shareholding in AAPT.

In 1996 AAPT bought 40% of Cellular One Communications, followed by QNET Communications. In that year it gained a carrier licence, offering long distance services to the residential market and building communications networks for the South Australian and Victorian governments. It subsequently moved to 100% of CorpTEL Communications, its AAPT Sat-Tel satellite joint venture, connect.com.au and Cellular One. US operator Primus acquired Axicorp (rebadged as Primus Telecom) in 1997, gaining a carriers license and expanding into internet services.

Telstra and beyond

AOTC was rebadged as Telstra Corporation in 1993, trading internationally as Telstra from that year and domestically as Telstra from 1995. Expansion into Indonesia and other Asian markets was not strikingly successful, with the group winding back overseas involvements in 1997-98. In 1996 Telstra recorded the largest profit in Australian corporate history, some $3.8 billion and was partly privatised in November 1997 through sale by the Commonwealth of around 33.3% of its shareholding.

The Australia's telecommunications market was formal opened to full competition in July 1997, with removal of restrictions on the number of licensed operators and anti-competition mechanisms (replaced by general competition law under the oversight of the Australian Competition and Consumer Commission). The new regime featured a single national phone numbering scheme and any-to-any connectivity requirements, with the expectation that mobile phones, fixed-line phones and other devices would be able to communicate with each other irrespective of whether the service was provided by Telstra or one of its competitors.

A further 16.6% was sold by the Commonwealth in September 1999; but the sale of the government's remaining 50.1% stake required legislation. In November 2006, after many allegations of conflicts of interest, the government sold an additional 33% stake, with the remaining 17% being placed in a Future Fund, of which the Commonwealth is the primary shareholder.

At the end of 1998 there were over 20 licensed telecommunications carriers controlling facilities in Australia, with several hundred other entities using those facilities to provide services to consumers. That number had climbed to 99 by May 2002 (with 11 licences surrendered); the Australian Communications Authority estimated that the benefits to consumers of telecommunications services from competition in 2000/1 were between $5.5 billion and $12 billion.

Telstra's recurrent overseas ventures had proved unsuccessful, with withdrawal from some South East Asian markets and major writedowns of joint venture investments such as the $2.7bn Reach undersea cable with Hong Kong-based PCCW. Recurrent takeovers in the software/services sector (eg Solution 6 Holdings, Sausage Software) have proved disappointing, with Telstra buying KAZ Group in 2004 for over $250 million. In 2004 Telstra paid $636 million for the Australian operations of Trader Classified Media NV: two classified ad print publications, five complementary online sites, two automotive inserts and the Trading Post brand.

Policy challenges

Telstra however retained a dominant position - particularly in the residential market, through ownership of infrastructure - and much public debate centered on

  • the advisability and timing for disposal of the Commonwealth government's remaining stake
  • definitions of 'basic service' (to be provided by Telstra and competitors, in some circumstances on a subsidised basis).

Telstra management encouraged sale, others called for retention of the stake (or even purchase of private holdings), still others called for various splits of services and assets (with for example public ownership of the infrastructure, to be substantially enhanced to bring broadband to all Australians - regardless of cost).

Industry specialists noted the difficulties facing Telstra's smaller competitors, often perceived to be undercapitalised, or with uncertain support from ailing overseas parents.

Infrastructure

Domestic

Telstra is the largest provider of both local and long distance telephone services, mobile services, dialup, wireless, DSL and cable internet access in Australia[1][2] On 15 September 2009, the Australian Government announced plans to structurally separate Telstra into two separate entities; a retail and a wholesale arm.[3]

Ownership statistics:

  • Telephones - main lines in use: 9.76 million (2007)
  • Telephones - mobile cellular: 21.26 million (2007)

Within Australia, telecommunications is provided using various technologies:

Domestic satellites

Domestic satellites are used to provide telecommunications services in very remote areas. These are primarily the Optus satellites C1 D1 and D2.

Domestic fibre-optic cables

Telstra, Optus, Nextgen Networks, PowerTel and AAPT are the main Intercity Networks with several other providers having regional networks or Eastern Coast links.

Domestic microwave links

Telstra is the main user of microwave links in remote areas; WIN Television provides a network of microwave towers for distributions of Television, and provides common carrier services. Other providers such as Agile Communications provide backhaul services in South Australia.

International

Australia is linked to the world by several fibre-optic cables:

  • Sea-Me-We3 to Indonesia and onto Asia, Middle East, the United States and other destinations with a capacity of 40GB/s.

There are also a number of satellite earth stations, which provide access points into the Australian networks:

Radio

Radio stations in Australia include commercial radio stations, national state-funded broadcasters (predominantly the ABC and SBS) and community radio stations. Licensing is handed by the Australian Communications and Media Authority (ACMA).

In February 2006, Commercial Radio Australia announced a digital radio network.[10]

  • Radio broadcast stations: AM 262, FM 345, shortwave 1 (1998)
  • Radios: 25.5 million (1997)

Television

Free-to-air television stations in Australia include three commercial networks, transmitted in various parts of the country by several different stations, two state-funded broadcasters (ABC and SBS), a small number of community television stations, and some digital datacasting services.

Australia is transitioning to digital free-to-air broadcasting and will phase out analogue broadcasts no earlier than 2010. Australian digital TV regulations call for standard definition (SD) broadcasts in 576i and a required amount of high definition (HD) content in at least 576p format. HD quota is currently set at 1040 hours annually. State media (ABC and SBS) are able to offer multi-channel services, however commercial networks are restricted in this area until 2008 in deference to the Pay-TV satellite and cable networks. Datacasting is also restricted.

As of September 2005, there were about 1,824,000 installed digital set-top boxes in Australia (roughly 12% of televisions).

  • Television broadcast stations: 104 (1997)
  • Television broadcast networks: 5 in most areas
  • Cable & Satellite Television Companies: 6 (Foxtel, Optus TV, Austar, SelecTV, TransACT and Neighbourhood Cable)
  • Televisions: 15.2 million (2005)

Internet

See also

References and notes

  1. ^ Telstra - Australia's largest telephony company, Bloomberg L.P.
  2. ^ Telstra - Australia's largest cable provider., CNET Networks
  3. ^ http://www.intelligentinvestor.com.au/articles/Telstra-TLS/Telstra-structural-separation-coverage.cfm?articleID=1020426# Separation Article
  4. ^ a b Southern Cross Announcement
  5. ^ Alcatel Jasaraus Information Page
  6. ^ Alcatel Announcement on Gondwana-1
  7. ^ Pipe Networks Release on New Australia to Guam Cable.
  8. ^ ITNews, PPC-1 delivers more speed than expected by Ben Grubb Oct 8, 2009
  9. ^ Telstra Wholesale Product page: Telstra Endeavour Cable
  10. ^ [1] Digital Broadcasting Australia

PD-icon.svg This article incorporates public domain material from the CIA World Factbook document "2003 edition".

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