Telecommunications in Australia
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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 80% 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.
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.
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. On 12 July 1906 the first Australian wireless overseas messages were sent between Point Lonsdale, Victoria and Devonport, Tasmania.1 Australia and New Zealand ratified the 1906 Berlin Radio-telegraph Convention in 1907. 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.
During the 1930s the PMG became responsible for the Australian Broadcasting Commission (ABC).
Background to the service:
- Australia's first telephone service (connecting the Melbourne and South Melbourne offices of Robinson Brothers) was launched in 1879. The private Melbourne Telephone Exchange Company opened Australia's first telephone exchange in August 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.
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 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.
AOTC was rebadged as Telstra Corporation in 1993, trading internationally as Telstra from that year and domestically as Telstra from 1995. International expansion was wound back 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.
Australia's telecommunications market was formally 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, 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.
Some of Telstra's 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.
Satellites are used to provide telecommunications services in very remote areas. These are primarily the Optus satellites C1 D1 and D2.
There are also a number of satellite earth stations, which provide access points into the Australian networks:
- Intelsat has 10 earth stations, 4 on the Indian Ocean and 6 on the Pacific Ocean.
- Inmarsat has 2 earth stations, which serve the Indian and Pacific Ocean regions.
- SingTel Optus Earth Stations has several earth stations located in the major cities.
Australia is linked to the world by several fibre-optic cables:
- Southern Cross Cables to New Zealand, Hawaii and the US mainland with a capacity of 620Gbit/s, with planned upgrade in Q2 2012.
- Southern Cross Cables to Fiji, Hawaii and the US mainland with a capacity of 620Gbit/s, with planned upgrade in the Q2 2012.
- Australia-Japan Cable to Guam and Japan. Primarily used as an alternative path to the United States with a capacity of 320Gbit/s.
- Sea-Me-We3 to Indonesia and onto Asia, Middle East, the United States and other destinations with a capacity of 40Gbit/s.
- PPC-1 (a joint venture of PIPE Networks and Videsh Sanchar Nigam) to Guam with lit capacity of 80Gbit/s, and potential capacity of 2.56Tbit/s.2
- Telstra Endeavour to Hawaii with a capacity of 320Gbit/s.
Next G was built to replace Telstra's CDMA network which operated from 1999 until 28 April 2008.3 Next G uses the 850 MHz band, since it requires fewer base stations to provide coverage, providing a lower capital cost.4 This network was implemented under contract by Ericsson as part of a project internally dubbed "Jersey" and launched on 6 October 2006.5 HSPA technology was included in the network to provide Australia's first wide area wireless broadband network. Telstra's next project is 4G LTE See 4G Australia
- http://tja.org.au/index.php/tja/article/view/9/30 Given, Jock. 2010. ‘Wireless politics: Marconi and the Parliament at Point Lonsdale, 12 July 1906’. Telecommunications Journal of Australia. 60 (4): pp. 60.1 to 60.7. Monash University ePress.
- ITNews, PPC-1 delivers more speed than expected by Ben Grubb Oct 8, 2009
- http://www.crn.com.au/News/74810,telstra-closes-its-cdma-network-today.aspx Telstra closes its CDMA network today (28-Apr-2008)
- Glossary. 3GSM 850, Telstra.com.au