Telecom Australia Business Information, Profile, and History

History of Telecom Australia

The Australian and Overseas Telecommunications Corporation (Telecom Australia) is a government-owned, regulated, public utility that provides 95 percent of Australian households with telephone service. It is the telecommunications leader in the Asia/Pacific region, as well Australia's second largest employer.

In no other country in the world has modern telecommunications played such a pivotal role in bridging vast distances within a country, and in bringing an isolated continent into direct contact with the 'outside' world, than it has in Australia. Australians have traditionally embraced and improved upon technologies that would help them reduce their domestic and international remoteness. In 1853 the telegraph arrived in Australia, nine years after Samuel Morse first demonstrated it in Baltimore. The Electric Telegraph Department in the British colony of Victoria opened for business in 1854. Unlike American utility companies, this utility was government-owned; the colonial government installed in Melbourne was skeptical of the public advantage of privatizing telegraphy, and the legacy of government ownership of utilities in Australia would remain long after the country achieved independence in 1901. By 1861, the four most populous colonies of Australia were connected by telegraph, and by 1872 telegrams passed between London and Melbourne.

Following the introduction of the telegraph in Australia came that of the telephone. When Alexander Graham Bell described his telephone in the pages of the Scientific American in 1877, an Australian inventor in Tasmania, Alfred B. Biggs, snapped up his ideas and three years later the first public telephone exchange opened in Melbourne. This time several complaints were issued from the business community when the colonial government bought out the private exchange, turning it into a government-owned monopoly. However, use of the telephone rapidly spread across Australia despite the inhospitable terrain and harsh climate that made development difficult. By 1887 the most remote region of western Australia boasted its first telephone.

In 1885 the world's first long-distance telephone line was constructed between New York and Philadelphia. One year later, Australia made a similar long-distance service available. By 1889, after American inventor Almon B. Strowger successfully experimented with 'automatic switching,' large numbers of people could use the telephone service simultaneously without relying on an operator to connect them, which vastly increased the potential customer base. In 1901 there were 32,767 telephones in Australia. Ten years later, the number had risen to 100,000.

The year 1901 saw federation of the colonies in Australia and independence from Great Britain. While the colonial government had previously controlled the telecommunications industry, henceforth telecommunications fell under the auspices of the federal postmaster general. The economic potential of the telephone and telegraph was immense and growing, providing a spur to business, a connection to the financial markets of Europe and America, and a window of opportunity for immigrants, particularly women, who were employed in great numbers. In 1930 the first Australian overseas telephone call was made between the new capital, Canberra, and London. The Second World War placed Australia directly in the line of enemy attack, and the coastal cities were readied for defense by receiving 'state of the art' telephone and wire communications. In 1946 a new government agency, Overseas Telecommunications Commission (OTC), emerged and was given control of overseas telecommunications.

With a burgeoning population and large numbers of immigrants arriving in Australia annually, the postal service could neither keep abreast of the changes nor turn a profit. The Telecommunications Act passed by Parliament on July 1, 1975 established Telecom Australia. Wholly owned by the Commonwealth of Australia, Telecom Australia became the sole supplier of domestic telecommunications under the management of a board of directors that reported to the Minister of Transport and Communications. Overseas telecommunications came under the ownership and control of OTC, and, in 1981, a new government agency, AUSSAT, was formed to operate Australia's satellite communications.

Regarded by the business community as long overdue, the divorce of telecommunications from the postal service allowed Australian telecommunications to enter the rapidly changing world of microchips and satellite communications. The leaner, more focused Telecom turned a handsome profit in its first year of operation, beginning a continuous trend of profitability. Worldwide competition in the telecommunications marketplace and the desire to promote Australian exports inspired Telecom to advance or risk leaving the nation technologically backward. Looming deregulation and the inevitable rise of domestic competition strengthened Telecom's commitment to excel.

The numerous special challenges facing the new company included servicing the thousands of miles of remote outback, where often little if any electricity was available, recognizing the special needs of the handicapped, the Aborigines, and the newly arrived, non-English speaking immigrant, addressing environmental concerns as well as social and community needs, and providing the most up-to-date services to Australia's business community. Many of these concerns were assessed in the company's publication Telecom 2000: An Exploration of the Long-Term Development of Telecommunications in Australia, which provided an analysis of technological options the company could explore and projections for its development up to the year 2000.

Turning a profit after years of loss under the postal service was the first challenge Telecom met. By 1983, Australia had the highest telephone use in the world. The following year Telecom launched its 'Rural and Remote Areas Programme' to bring high quality telecommunications services to remote areas (rural telephone users are also given a special 'pastoral discount'). By the early 1990s, 46,000 residents of the Australian outback had been provided with phone service. In so doing, Telecom adopted some innovative techniques--utilizing solar and wind power as alternative fuel sources--that have given the company the distinction of being a world leader in alternative energy sources for telecommunications purposes. Telecom also employed an 'Ethnic Community Relations Officer' as a liaison between the company and community groups, especially non-English speakers, and supplied the handicapped with special equipment free of charge. Furthermore, a special environmental task force was created to ensure compliance with environmental regulations. Out-of-date telephone directories and unused cables continue to be recycled, and attempts have been made to curb the use of substances that damage the ozone layer.

In 1989 Telecom Australia became the Australian Telecommunications Corporation, and in 1992 the official name of the company was altered to the Australian and Overseas Telecommunications Corporation, following its merger with OTC. Telecom Australia has since become a $24 billion dollar company that owns and controls the telecommunications infrastructure of the nation. Pouring $2.5 billion into the Australian economy in 1990, Telecom also has become a vital contributor to domestic growth. Millions of dollars have been invested in research and development, resulting in innovations such as mobile public pay-phones, while Telecom leads the highly competitive market for business telephone systems.

Most recently Telecom Australia has faced the very real challenges of deregulation. Australian law mandates full deregulation of telecommunications by 1997, an act that will turn Telecom Australia into a private, profit-making company. Consequently, the company's work force has been trimmed gradually, and it has aggressively pursued overseas contracts and invested heavily in research and development. The results have been strong; despite the recession, in 1991 Telecom produced a 16 percent profit over the previous year, and its subsidiary, Telecom International, signed its 200th overseas contract. Also that year the Kent Street Integrated Services Digital Network (ISDN) center in Sydney was completed, putting Australia farther ahead than Europe or North America as an ISDN leader and ensuring Telecom's dominance in Asian/Pacific telecommunications. As a multi-billion dollar international competitor in the Asia/Pacific area where countries from India to Vietnam are building up their telecommunications infrastructures, and having weathered the recession of the 1990s with high marks, Telecom Australia is well-poised to enter the 21st century as a private corporation with a vital role in Australia's future.

Principal Subsidiaries: Telecom Australia (International), Ltd.; DirectoryNet, Inc. (US); Telecom Australia (New Zealand), Ltd.; Telecom Technologies Pty. Ltd.; Lyer Nystal Pty. Ltd.; Telesoft Communications Pty. Ltd.; Telecom Super Pty. Ltd.; QPSX Communications Ltd. (78.4%); QPSX Systems, Inc. (US); QPSX Communications Australia Pty Ltd. (78%); Advanced Network Management Pty. Ltd. (60%); Information Switching Technology Pty. Ltd. (60%); T-Net Pty. Ltd. (60%); Telstar Systems Pty. Ltd. (60%); Telecom Messagetech Pty. Ltd. (51%); Pacific Access Pty. Ltd. (51%); Telecom Australia (Saudi) Ltd. (50%).