NEW YORK-Telstra Corp., Australia’s dominant telecommunications provider, “hates to be considered an incumbent because we transitioned to a New Age company years ago,” said Philip Wise, managing director of its Mobile Consumer Division.
To provide a full suite of services, the company is involved in a three-pronged initiative aimed at “mobile, international aspirations and broadband, which is our next wave,” he said during a presentation here in late June.
“The recent joint venture with Pacific Century CyberWorks is key to our expansion into Asia … Our pan-Asia strategy is that we see real opportunities to leverage our strength in mobile wireless, Internet and mobile multimedia linkages,” he added.
“We will make a number of investments in developed and undeveloped markets to build a portfolio of linked networks with the goal of being the partner of choice and build what could become a major regional cellular operator.”
In April, Telstra agreed to invest $3 billion in Pacific Century CyberWorks Ltd. to form two separate ventures with the Internet investment group. One pools their cable television assets; the other the Hong Kong wireless assets of Cable & Wireless HKT with those Telstra owns outside Australia. The Australian carrier will own 40 percent of the joint venture.
“Regarding our target markets with PCCW, I think it’s been overplayed how one can transfer brands. The person who bought control may think he can impose his brand, but it’s not necessarily so,” Wise said.
“In the transfer of product platforms for mobile and business applications, we will learn as much as we will share.”
This agreement, expected to close by Aug. 10, would reduce Pacific Century’s debt by about $500 million, to $5.5 billion, said David Prince, deputy chief executive of Cable & Wireless HKT. The Pacific Century CyberWorks-Cable & Wireless HKT merger also is set to be completed on Aug. 10.
In voting July 3, shareholders of Cable & Wireless HKT, the oldest telecommunications provider in Hong Kong, overwhelmingly approved its acquisition by Pacific Century. Owned by Richard Li, the son of Hong Kong’s wealthiest citizen, Pacific Century bested Singapore Telecommunications Ltd. in its offer for Cable & Wireless HKT, worth about $37 billion cash and stock when it was announced in February.
A day after the July 3 Cable & Wireless HKT shareholder vote, “Telstra stepped up its search … and is scouring the Asia-Pacific region for mobile phone assets in a last-ditch buying spree,” CBS.MarketWatch reported July 4, citing the Australian Financial Review. The goal is to include them in its joint venture with Pacific Century before that deal closes in early August.
Telstra reportedly is looking at PT Telekomunikasi, also known as PT Telkom, the largest telecommunications operator in Indonesia, and at MobileOne Asia, the second-largest wireless provider in Singapore. Wise also said Telstra “is working with several carriers in Vietnam.”
Within the Land Down Under, Wise said Telstra also has an aggressive expansion plan under way for its Global System for Mobile Communications and Code Division Multiple Access networks, each of which is licensed to cover 94 percent of the population.
“We made the world’s first 1XRTT data and voice calls over our CDMA Freedom Network, and our CDMA infrastructure roll-out will be done by the end of July,” Wise said.
Telstra allows its GSM and CDMA customers to share free calls between its two networks. Additionally, Short Message Service use has skyrocketed since April, at which time Telstra, Cable & Wireless Optus and Vodafone introduced SMS connections among their networks.
“Imagine what doing this would do in the United States,” Wise said.
Working with L.M. Ericsson and Nortel, Telstra hopes to offer “widespread deployment” of General Packet Radio Service at 9.6 kilobits per second during the second half of this year, “depending on handset availability,” he said.
By early 2001, Telstra hopes to raise GPRS speeds to 24 kpbs, and by Christmas of next year to have 1 million wireless data users.
“Customers won’t need a WAP handset to access this because, with new SIM cards, they can use a SIM tool kit to access it,” Wise said.
Calling the carrier the America Online of Australia, Wise said the company updates its Wireless Application Protocol products every 90 days. It has joined forces with more than 400 companies in the country to provide content delivery.
Telstra also is looking beyond the paradigm of anytime, anywhere communications to include anyhow.
“In what we think is a world-first, Telstra.com already has pushed content simultaneously over narrowband, core band and WAP, with a common user registration and authentication for all,” Wise said.
Telstra also is active in bundling fixed line, Internet service provision and mobile Internet services.
“We are looking to sticky applications, and our new customer relationship management processes are focused on retention, with flexible payment options in post-paid and a single bill for fixed and mobile,” he said.
Churn among the 750,000 subscribers who have opted so far for the single bill is half Telstra’s 15 percent annual average.
“Down the road, we are looking at corporate Internet access, Palm Pilot synchronization with PCs and e-purse transactions. But we will need product platforms and common interfaces for electronic purse,” Wise said.
Looking ahead to third-generation wireless, Telstra expects to benefit tremendously from the International Telecommunication Union’s decision to allow carriers to use spectrum they already own for these services.
“We have 35 percent of all the available spectrum (in Australia), and we bought it a lot cheaper than our competitors. Our costs will be much less than in the U.K., so direct comparisons with the U.K. are inaccurate,” Wise said.
“We will have a choice of two digital networks for deploying 3G and will watch technical developments before making any decisions.”
