History of Telstra

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History and Successes of Telstra

Introduction

The Australian telecommunication market is currently shared between three main players with the key player being Telstra, an Australian premier telecommunication company with perhaps one of the richest history in light of telecommunications companies in the world. Even though there is a paucity of information touching on the formation of the Telstra, it is indubitable that there are several factors that the role played in formation of the company; factors that if complied proficiently, gives a clear picture of the history of the Telstra. This papers aims at compiling events and activities in Australian telecommunication sector that define its development and successes of the company.

Background of Telstra

As indicated in the Telstra website, the history of Telstra can be traced back to 1901 when the Post Masters General department was created in Australia following the handing of powers to the commonwealth Government in handling Posts and Telegraphs by the constitution in a move that ended up creating a monopoly with regards to telecommunication. Initially, handling of posts and telegraphs was the responsibility of separate and distinctive colonial departments. Afterwards, as reported by the Australian Bureau of Statistics (1988), there was considerable growth in the telecommunication sector that saw the establishment of radio stations like the Marconi Radio System. Even though, the growth in telecommunications was interrupted by the World War 1, the period witnessed a lot of technological advancements; the war led to a spontaneous growth of wireless stations all over Australia, particularly, along the coastline. Notably, longline interstate trunk services of Australia were established during in the period after the end of World War I (1920s). In essence, the modernization of Australia’s telegraphy and telephony occurred during this period with the implementation of automatic exchanges, thanks to the then Postmaster General, H. P. Brown, who inspired most of these changes (Australian Bureau of Statistics, 1988).

It worth noting that all this time there was no wireless telephony in Australia. However, 1992 was marked with the signing of agreements for wireless telephony to be used in the transmission of national messages to Australian people. The then prime minister of Australia, Billy Hughes, makes it in history as the first prime minister of Australia to transmit his speech across Australia. Later, broadcasting stations would be allowed to transmit programs in Australia in a move that was not warmly welcomed by Australians who preferred radio transmission to television transmission. In 1924, the Wireless Telegraphy Act was signed into law and this paved way to the establishment of the Australian Broadcasting Commission (ABC) (Australian Bureau of Statistics, 1988).

Until the 1940s, there was no legislation to regulate Australia’s international telecommunication. However, 1946 saw that enactment of the Overseas Telecommunications Act of 1946 that sought to establish, maintain and develop public telecommunication services between Australia and other countries, its external territories and ships in the sea (Australian Bureau of Statistics, 1984). As a provision in the Act, The Overseas Telecommunications Commission of Australia (OTC) was to be formed to serve as a custodian of the Overseas Telecommunications Act. The OTC was given special instructions by the Commonwealth Government to ensure its services were as cheap as possible. This commission was responsible to the Commonwealth parliament through the Minister of Communication and a report about its activities was supposed to be availed to the parliament in October every year (Australian Bureau of Statistics, 1984). In the same year, the proceedings in Australian parliament were broadcasted for the first time. Again, the first commercial television was established, thanks to the 1956 Olympics that was overly instrumental in the establishment of this television.

In 1975, the Telecommunications Act of 1975 was signed into law leading to the separation of Telecommunications from postal functions (Telstra, 2012; Grant, 2004). The law created the Australian Telecommunications Commission, trading internationally and locally as Telecom, whose specific function was to regulate Australia internal telecommunication services. Telecom was supposed to take charge of installing, maintaining and operating domestic telecommunications infrastructure besides being the sole issuer rights to third parties wanting to install any infrastructure that was directly linked to domestic telecommunication (Grant, 2004; Telstra, 2012). As Grant (2004) asserts, the separation of telecommunication and postal functions by the Australian Telecommunication Act also led to the creation of Australian Postal Commission (Australia Post) that was supposed to handle postal duties. Anecdotally, during this time, the availability of telephone in Australia was one telephone to ten people. Telecom grew remarkably over the years and in 1981, it launched the first Australian mobile network called the Public Automatic Mobile Telephone System (PAMTS). In its basic form, PAMTS was a car phone whose prominence grew spontaneously in Australia and was a brilliant innovation with regards to the plight of travelling workers. This phone that fully automated though not cellular was first launched in Melbourne followed with Sydney before its use spread to other parts of Australia.

Both OTC and Telecom were incorporated into public companies in 1988 and 1989 respectively. The incorporation of OTC was occasioned by the enactment of the Overseas Telecommunication Act of 1988 while the corporation of Telecom came as a result of the amendment of the Australian Telecommunications Corporation Act in 1989 (which renamed it to Australian Telecommunication Corporations) (Campbell, 2008) even though it continued to trade are telecom in Australia (Telstra, 2012). Following the corporation of Telecom, the functions of Telecom Corporation as highlighted in the act was majorly to supply telecommunication services within Australia as well act, on behalf of Australia, in businesses or activities relating to telecommunication internationally (Australian Bureau of Statistics, 1984). Also notable is the fact that the Telecommunications Act of 1989 was aimed at creating a competitive environment in the telecommunication sector of Australia. In this regard, a telecommunication regulator, AUSTEL, was also established and served with responsibilities that ranged from technical regulation, formulate policies meant to effectively control monopoly and competitive services in the Australian telecommunication sector, protection consumers from extortions and other fraudulent business practices.

In 1991 telecom was incorporated into a limited liability company even though it retained the name “Telecom”. Telecom was later renamed Telstra in 1993; a name that was only used for international business deals even though locally it was still using telecom (Telstra, 2012) even though in 1995 the name telecom was dropped by Telstra hence the name Telstra could now be used both in international business and local business.

Telstra’s Current Successes

As a telecommunication company, Telstra has undergone massive developments since historical times. These have greatly prepared it to face the future challenges with ease. Even though competition in the telecommunication sector in Australia has become still with the entrance of international companies like Vodafone into the Australian voice and data market, Telstra is still Australia’s the main telecommunication company commanding a considerable share of the telecommunication market. The company was commanding a remarkable 42% of the telecommunications market share in Australia followed by Optus and VHA with 31% and 27% respectively (ACMA, 2011). This makes it the dominant company and undoubtedly, although indirectly, it enjoys the benefits associates with monopoly. This is a great development especially considering that other companies are equally competitive (Desai, 2006).

Another area of success includes diversification of its products and services. Currently it is no longer just offering “telegraph and telephony services”. The company offers a wide range of products that include; fixed and mobile services, mobile networks, wholesale and paid television among other services (Telstra, 2012). Some media companies in Australia report that the company was recently rebranded in what is termed as the greatest change ever since Telecom was renamed Telstra (Sandev, 2011). Product diversification has enabled it to not only survive in the current economy, but to also thrive and maintain the topmost position in the market. In his research, Grant (2004) ascertains that market shock expose current companies to various economic threats. Inherent fluctuations compromise the ability of the respective companies to maintain upward growth. Product diversification cushions the company against any destructive market shocks and fluctuations.

Another area of success that the company has done well pertains to mainstreaming sustainability in its practices. The Australian Bureau of Statistics (1988) ascertains that successful companies are increasingly making sustainability a mainstream factor. In particular, Telstra acknowledges the impact of global warming and environmental protection. Some of the practical steps that it has undertaken to address these concerns include pursuing energy consumption strategies and engaging actively in corporate social responsibility through initiatives such as community capacity building. In this regard, the company provides the community with education programs regarding environmental conservation and management (Telstra, 2012). This is attained through idyllic strategic planning.

Perhaps the most important success area of Telstra entails the incorporation of ICT in its operations. This according to Grant (2004) has enables the company to inculcate lean practices in its operations. To a great extent, it ensures efficiency and effectiveness in service delivery. It also minimizes the relative wastes and aids in saving important natural resources. In a world that is being faced with the problem of diminishing natural resources, natural resource conservation should be at the core of all companies (Australian Bureau of Statistics, 1984). Seemingly, this contributes significantly to sustainable living. Besides, pursuit of sustainability has given the company a competitive edge against its competitors. This is because the underlying principles are in line with the modern day business expectations.

In sum, Telstra Company has undergone significant developments since its inception in the early 1900s. Its strong economic base has enabled it to face wide ranging economic challenges with ease. As it has come out from the study, the first greatest success of Telstra is its ability to maintain market leadership even after privatization. Also, diversification of its products is a significant development. Also worth mentioning is the mainstreaming of green practices in its operations. Finally, development of its ICT sector has ensured efficiency in production and service delivery.

Reference List

ACMA. (2011). The Australian communications and media market. ACMA Communications report 2010-11, 31-71.

Australian Bureau of Statistics. 1984. Year Book Australia No. 68, 1984. Australia: Australian Bureau of Statistics.

Australian Bureau of Statistics. 1988. Year Book Australia, 1988, No. 71. Australia : Australian Bureau of Statistics.

Australian Bureau of Statistics. 1991. Year Book Australia, 1991 No. 74. Australia: Australian Bureau of Statistics.

Campbell, D. ed. 2008. International Telecommunications Law [2008]. Salzburg: Yorkhill Law Publishers.

Desai, A. V. 2006. India’s telecommunications industry: history, analysis, diagnosis. New Delhi, Sage Publ.

Goldfinch, S., and Wallis, J. 2009. International handbook of public management reform. Cheltenham, Edward Elgar.

Grant, A. ed. 2004. Australian telecommunications regulation: the Communications Law Centre guide. Sydney: University of N.S.W. Press.

Sandev, M. (2011, September 19). Telstra’s Colorful Rebrand Craves Emotional Connection. Bandt. Retrieved from http://www.bandt.com.au/news/top-stories/telstra-s-colourful-rebrand-craves-emotional-conne

Telstra. 2012. About Telstra – History of Telstra. Telstra. Retrieved October 9, 2012, from http://www.telstra.com.au/abouttelstra/company-overview/history/telstra-story/index.htm