E-TEI TECHNOLOGY

The telecommunications sector in Australia is predominantly saturated by telecoms provider, Telstra. But despite this, space is also a playing ground for  other telephone carriers which include Optus, AAPT and Powertel, Soul, Vodafone and Hutchison 3G.

According to BBG Communications, the main telephony network in Australia is connected through optical fibre networks, with households tapped to the network through copper lines that are linked in local exchanges. For mobile telephony, Australia runs on the GSM platform, like those in Europe and majority of its neighboring countries in the Asia-Pacific. In 2003, 3G mobile phone services were introduced, adding another plus to the generally considered good domestic and international telecommunications services in the country.

Primarily the Optus satellites C1 D1 and D2, are the domestic satellite systems in use for very remote areas.

Telstra, Optus, Nextgen Networks, PowerTel and AAPT are the main Intercity Networks with a collection of other providers having regional networks or Eastern Coast links.

Telstra is the main user of microwave links in remote areas; WIN Television provides a network of microwave towers for distributions of Television, and provides common carrier services. Other providers such as Agile Communications provide backhaul services in South Australia.

Section 51(v) of the Australian Constitution gave the new national government power over all postal, telegraphic, telephonic and ‘other like services’. The last clause embraced future developments in the telecommunications front, which from then meant radio, television and the internet.

The colonial telecommunications network infrastructure (staff, switches, wires, handsets, buildings etc) were handed over to the Commonwealth and became the responsibility of the first Postmaster-General (PMG).  The PMG position is a Federal Ministerial post,  overseeing the Postmaster-General’s Department that was in charge of all domestic telephone, telegraph and postal services. With 16,000 staff, it accounted for 90% of the new federal bureaucracy. That figure went up to over 120,000 staff (around 50% of the federal bureaucracy) by the late sixties.

Public phones were then available only in few post offices. Other limited phones installations were made available to major businesses, government agencies, institutions and among propertied residences. 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 ran between Melbourne and Sydney starting 1907, with extension to Adelaide established in 1914, Brisbane in 1923, Perth in 1930 and Hobart in 1935.

Meanwhile, overseas cable links to Australia remained to be privately owned and managed by then, reflecting the dynamics of imperial politics, demands on the new government’s resources and the allocation of responsibilities at that time. 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. Australia and New Zealand had ratified the 1906 Berlin Radio-telegraph Convention in 1907.

During the 1930s the PMG became responsible for the Australian Broadcasting Commission (ABC). PMG’s management of the telecommunications network ABC echoed BBC’s own story.

As privatization has been changing the landscape of all service and utility providers, many tend to romanticize and era when enterprises were supposedly ran not for profit but for service.  It has become fashionable for some quarters to praise those times when PMG was supposedly an enlightened technocratic management, moved only for the national interest, and public service, over and above profit.

The image of a benevolent PMG is not without problems, as it is apparent that decisions on location and management of facilities were reflections of local political demands and the ‘Australian Settlement’ first articulated by Alfred Deakin.  The PMG was, after all, a major employer in rural areas, the Minister generally came from the Country Party and there was an emphasis on in-house development and local manufacturing.

The observation then was that governments of whatever party affiliation benefited from the organisation’s revenue generating nature.  Many would say that PMG was not a discrete statutory body, with no power on its own to retain its revenues, and was captive to national political dynamics.

In 1982, a Davidson Enquiry on Australia’s telecommunications services sector, made a recommendation to end Telecom Australia’s monopoly. In the following year, Aussat Pty Ltd, another government agency, had been established to operate domestic satellite telecommunication and broadcasting services.  But  Aussat’s charter did not allow it to be a direct competitor to Telecom.  A case in point is its charter’s prohibition on interconnecting public switched traffic with Telecom’s network. Aussat’s viability as a telecommunications player was greatly undermined by difficulties in raising capital, tepid government support and spiraling operation costs.

It wasn’t until 1985 that Australia’s first geostationary communications satellite was operational; by late 1990, however, it was saddled with debts amounting to about $400 million.

The Australian Telecommunications Commission was restructured, giving way to the Australian Telecommunications Corporation.  The new entity traded as Telecom Australia, in 1989. It was also the same year which saw the last domestic telegram handled by Telecom, as responsibility for telegram operations was handed over to Australia Post.

There were proposals floating for a merger of Aussat and OTC, but all were rejected in favor of the disposal of the satellite operator to a non-government entity that would be allowed to compete with Telecom.

Immediately after, Optus Communications – a private sector entity owned by a consortium that included BellSouth – was given Australia’s second general carrier licence.  Optus proceeded to purchase the Satellite assets with many of the Non Satellite Assets remaining with the Government as part of Telstra.  Cable & Wireless, privatized after several decades of UK government ownership, took a controlling stake in Optus in 1998 before control passed to SingTel in 2001.

Optus was initially allowed to cater the national long distance and international telephone calls service in the Australian telecommunications market. The restrictions on  players that can enter the general telephone market until 1997 and ‘pro-competition’ mechanisms under the Trade Practices Act 1974, among which guaranteed access to Telecom’s existing infrastructure on reasonable terms, meant to ensure Optus’ viability.

Competition in long distance corporate voice and data service operations was so steep. It was also felt by Telstra versus AAPT which was active from 1991, MCI Communications, later absorbed by the ill-fated WorldCom, was an early major shareholder of AAPT but got out 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%  share of the Australian ISP connect.com.au Pty Ltd and bought NewsNet ITN. In the same year SingTel acquired a 24.5% shareholding in AAPT.

AAPT went on to muscle up. In 1996, it bought 40% of Cellular One Communications, followed by QNET Communications. In the same 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.  Subsequently, it moved to 100% of CorpTEL Communications, its AAPT Sat-Tel satellite joint venture, connect.com.au and Cellular One. US-operator Primus acquired Axicorp in 1997, gaining a carriers license and expanding
into internet services.

AOTC had a brand makeover as Telstra Corporation in 1993, trading internationally as Telstra starting the same year and domestically from 1995. Its attempts for expansion to Indonesia and other Asian markets did not live up to the company’s expectations, with the group winding back overseas involvements 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.

After Australia’s telecommunications market was fully opened up to full competition in July 1997, privatization followed. A further 16.6% was sold by the Commonwealth in September 1999 bringing the shares sold to a total of 49.9%.  This figure is safely below 50.1%, at which rate, any sale of government-owned properties involves legislation. With the new regime came the adoption of a single national phone numbering scheme and any-to-any connectivity requirements.  Mobile phones, fixed-line phones and other devices was designed to communicate with each other irrespective of whether the service was provided by Telstra or one of its competitors. In November 2006, an additional 33% was sold by the government. The remaining 17% was placed in a Future Fund to provide full separation from government and regulations. This followed to avoid many possible conflicts of interest with the government being primary shareholder and competition regulator.

By July of 1997 the Australian telecommunications sector was fully liberalized for full competition with removal of restrictions on the number of licensed operators and anti-competition mechanisms.

By the end of 1998, there were over 20 licensed telecommunications carriers in Australia, with several hundred other entities using those carriers’ facilities to provide services. By May 2002, this figure climbed to 99 licensed telecommunications carriers.  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.

If your small business were a grocery store or automotive mechanic shop, most every lender in the U.S. would immediately understand your business model. If you were to approach them looking for a line of credit, they would be able to rather quickly determine if your business is able to receive some small business financing from them or not. However, as the owner of a telecommunications company you know that this is not always the case for your industry. Traditional lenders just simply do not understand how telecom companies do business and the intracacies of telecommunications funding.

If you are a large multi-national telecom company, funding abounds for you just simply because of the huge amount of revenue your business generates month after month. However, if you are a small telecom business, obtaining that line of credit can be much more difficult. When you approach a traditional lender for funding, you will likely find that they do not understand your business model and telecommunications financing in general. It is not in the traditional banker’s interest to work with telecommunications businesses with receivables that are all small amounts with many customers. Generally, your receivables take 45 or more days to receive after delivery of services. Because these billing issues are unique to the telecom industry, traditional lenders do not fully comprehend the fine details and tend to choose to deal with businesses in more traditional roles.

Once your small telecommunications business is on solid ground, and you are looking to expand your market base, there are three options readily availablec to you for obtaining small business financing. These three options are: factoring, asset based solutions, and investment capital. Let’s take a quick look at each of these options:

Factoring: Factoring is a financing process which allows your company to borrow money against its receivables; your receivables are used as the collateral for the loan. The down side to traditional factoring is that this type of funding generally comes with high interest rates. By finding a lender with telecommunications financing experience, you can sometimes find a lower rate. This makes factoring a strong consideration only if you are able to locate a specialized lender with telecommunications financing experience.

Asset Based Solutions: Asset based funding solutions involve using your existing contracts, equipment, and other assets, as the collateral for your funding. This can be a good option to consider if you have a lot of assets or large contracts to leverage. However, if you own a very small local telecom company, your company may not have the assets or contracts to make this form of funding work. In that case, investment capital may be a good option to consider.

Investment Capital: If your business is open to the idea of investment capital, versus a traditional line of credit, investment capital can be a win-win situation for everyone.

While finding small business financing can be challenging in the telecommunications industry, it is not impossible. When it is time for your small telecom company to expand you should consider factoring, asset based solutions, and investment capital as possible options. Whatever your decision may be, as long as it fits within your long-term business plans, then you are sure to succeed.

Fifteen years ago seeing a cellular phone was quite rare, and in today’s technologically advanced world, just about everyone has a cellular phone. Adults, teenagers, and even children carry around portable models of the telephone.

Through the interesting history of the cellular phone, one can get the picture of how the portable wonder became what it is today.

In 1843, a skilled, analytical chemist named Michael Farady began exhaustive research to find a space that could conduct electricity. He told of his findings, and these advances of 19th century science and technology have had an incalculable effect on the development of today’s cellular phone.

By the year of 1865 a dentist by the name of Dr. Mahlon Loomis became what is thought to be the first person who was able to communicate wirelessly through the atmosphere. Between 1866 and 1873 transmitted telegraphic messages 18 miles between the tops of the Cohocton and Beorse Deer Mountains in Virginia.

Dr. Mahlon Loomis developed a way of transmitting and receiving messages by using Earth’s atmosphere as a conductor. He also launched kites enclosed with copper screens that were linked to the ground with copper wires. He was awarded a $50,000 research grant from Congress to continue his studies.

Then, in the year of 1973, a former general manager from the systems division of Motorola, Dr. Martin Cooper, became who is thought to be the inventor of the first portable handset. Dr. Cooper was also the first person to make a call using a portable cell phone.

In New York, he set up a base station with the first working prototype of a cell phone, the Motorola Dyna-Tac. He and Motorola took this technology to New York to show the public.

Later on, in 1977, the cell phone went public and public testing began. Chicago was the home for the first trials with 2,000 people. After Chicago, there were later trials in Washington, D.C. and Baltimore, and then it spread to Japan in 1979.

Usual technologies changed in 1988 when the CTIA – Cellular Technology Industry Association – was formed to lay out realistic goals for cell phone providers. Research for new applications of development was included.

In 1991 the Telecommunications Industry Association set a new standard with the creation of the TDMA Interim Standard 54.

Cell phones have had quite a long journey. Although there was a great demand for cell phones, it took 37 years for them to become commercially available in the United States.

Wireless service was actually invented almost 50 years ago, so it’s hard to believe that cell phones have only become popular over the past couple of decades. Currently, there are more than 60 million people who own cell phones.