operators

This page looks at telecommunication providers in Australia and New Zealand.

It covers -

• introduction - industry scope, scale and trends
• Telstra
• Optus and SingTel
• AAPT and Telecom NZ
• Primus
• Vodafone
• Hutchison
• other carriers
• disappearances - One.Tel and other disasters
• internet service providers
• pay television

     introduction

Evolution of the Australian telecommunications industry since the early 1990s has seen the emergence of a range of carriers, although most traffic and most revenue goes to a handful of organisations.

At the beginning of 1999, there were over 25 licensed telecommunications carriers controlling facilities in Australia and New Zealand. Around one thousand ISPs and other entities used those facilities to provide services to business, institutional and residential markets.

By June 2003 there were 94 licensed carriers. Telstra remained the only licensed carrier with a ubiquitous presence across Australia, providing 10.3 million fixed standard telephone services. Optus had approximately 1.1 million services connected to its network.

The mobile telecommunications sector continued to experience the largest growth in Australian telecommunications, with the ACA estimating that the sector contributes over $5 billion annually to the economy. At the end of 2002-03 there were approximately 14.3 million mobile phone services in operation in Australia, up by 12.6% since June 2002 to reach a penetration of 71.9% (ie mobile phone subscriptions per 100 inhabitants). Most growth during 2002–03 involved pre-paid services (around three out of four new mobile subscriptions). Around 3.95 billion SMS were sent in 2002-03, up 44% on the preceding year.

The ACA somewhat problematically estimated that in 2002-03 the 1997 telecommunications reforms resulted in "consumption benefits of $5.7 billion for the nation as a whole across the range of goods and services consumed by all households", with benefits to small business estimated at $1.8 billion.

     Telstra

Telstra, the dominant carrier, traces its origins to the federal government's PMG of last century and beyond to pre-1900 colonial government and private networks.

It remains the only licensed carrier that has a ubiquitous presence across Australia, accounting for most fixed line services, many mobile services and major internet operations. As of mid-2003 it provided 10.3 million fixed standard telephone services (of which 6.15 million were residential lines, 2.6 million were business lines and 1.56 million were wholesale lines provided to competitors such as Optus). Some 1.2 million ISDN lines were in service at that time. Telstra claimed that its network featured over 3.5 million km of fibre, with around 11,000 telephone exchanges.

     Optus and SingTel

Optus, the second largest telco, had around 1.1 million fixed line services connected to its network and an estimated 34% share of the GSM mobile market.

Optus was launched in 1991 by a consortium that included the Mayne logistics conglomerate, the AMP insurance group Cable & Wireless of the UK (24.5%) and US RBOC BellSouth (24.5%). It acquired the ailing AUSSAT satellite operation as part of a privileged competitive position prior to the introduction of 'full competition'. Optus launched an analogue mobile network in 1992 (with digital GSM from 1994) and initially rolled out a high capacity fibre network along the eastern seabord spine, which as noted in the preceding page of this profile accounts for most commercial traffic, and in major business centres. That rollout emphasised high bandwidth local, long distance and interstate corporate traffic: in the absence of a parallel residential network Optus was forced to rely on Telstra's local network for non-corporate calls, this becoming Telstra's major customer.

As the basis for rollout of a large scale residential network (beginning with the more affluent or geographically convenient suburbs of Sydney, Melbourne and Brisbane) Optus sought to leverage its satellites through a pay television service, which would be delivered through cable in the major cities. It accordingly formed the Optus Vision consortium with the Seven network, Kerry Packer and US cable operator Cablevision in competition with the rival Foxtel consortium.

Provision of residential phone services over that network - which reached 2.2 million homes - commenced in in 1996. Mayne's strategic wanderings saw offloading of its stake in Optus in favour of expansion into pharmaceuticals, nursing homes and pathology services. It sold its remaining stake in 1998, with the company being rebadged as Cable & Wireless Optus to reflect the dominant shareholder and subsequently listed on the Australian Stock Exchange. Moves in 1999 to acquire competitor AAPT were rebuffed by regulators; the target was taken over by Telecom New Zealand. That year saw Optus launch its own ISP, Optus Internet. In 2001 C&W sold its holdings for US$7 billion to SingTel, the Telstra counterpart in Singapore that is 67% held by Temasek, the government's investment arm. Singtel subsequently acquired the rest of Optus.

As of 2005 SingTel has investments in 20 countries; operations outside Singapore now account for 70% of SingTel's revenue and two-thirds of its pretax earnings. SingTel's profit for the year to March 2005 was around US$3.7 billion, with sales of around US$12.62 billion. Optus contributed 38% of SingTel's pretax earnings.

Expansion overseas reflects the size and structure of the home market, with 4.3 million residents, low domestic revenue growth and falling international call revenue. At the time of the C&W deal SingTel was flush with cash from its time as a monopoly (ended 2000, the year in which it was outbid by Richard Li's Pacific Century CyberWorks for the Hong Kong arm of C&W). In 1993 it took a 37% stake in Philippine mobile operator Globe Telecom (later increased to 44%), paid US$424 million in 1999 for 21.5% of Thai mobile operator Advanced Info Service (controlled by the family of Thai prime minister Thaksin Shinawatra), acquired 31% of Bharti Tele-Ventures in India in 2001 and 22.3% of the Indonesian mobile operator Telekomunikasi Selular Indonesia (Telkomsel) for US$602 million. The Telkomsel stake increased to 35% in 2002, with SingTel subsequently shedding noncore assets such as Yellow Pages publishing and 12% stake in dominant Belgian telco Belgacom, divesting its postal operations (SingPost) and taking a 45% stake in Pacific Bangladesh Telecom. Its offshore mobile operations have been grouped as Bridge Mobile Alliance.

Acquisition of Optus was controversial because of the need to satisfy Australian regulators, politicians and the US and Australian defence departments (in particular because Optus satellites carry some intelligence traffic).





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