Topics: Telstra, Telecom Australia, BigPond Pages: 15 (3939 words) Published: March 28, 2013
Telstra is a descendant of the Post Master General's (PMG) Department of the Australian Commonwealth Public Service. In 1975 telecommunications and postal functions were divided into two statutory commissions: Telecom Australia and Australia Post.

Telecom Australia, the government-owned communications carrier, later merged with a much smaller government body, OTC, then responsible for international calls. Telecom rebranded itself as Telstra in the early 1990s.

Telstra has faced competition since the late 1980s from competing providers. It retains ownership of the fixed-line telephone network, as well as one of two competing pay-tv and data cable networks. Other companies offering fixed-line services must therefore deal with Telstra. Competing telecommunication companies have constantly accused Telstra of overcharging for wholesale access to their networks the ACCC has often agreed but decisions by the regulator are slow.[1]

Current Situation

Australia’s leading telecommunications and information Services Company, Telstra Corporation Ltd is well poised to deliver a high level of service in the highly competitive communications market in Australia and abroad.

Telstra’s service offerings include:
– Local, long-distance and international telephony services – Mobile telecommunications services
– Data, Internet and online services
– Wholesale services to other carriers
– Telephone directories
– Pay television services

Telstra employs approximately 40,000 staff and generates revenues of some US$18 billion in its most recent fiscal year.[2]

SWOT Analysis

After careful deliberation, a SWOT (strength, weakness, opportunities & threats) analysis was developed that was reflected in a selection of OB (Organisational Behaviour) Theories that demonstrate the general abilities and framework of Telstra.

All of these theories will be explored further with regard to how they shape policies, provide direction or limit growth in relation to the SWOT analysis (Ref. to Appendix A).

Issue Analysis


“Competitors use tactics like price reductions, new product introductions, and advertising campaigns to gain advantage over their rivals. Competition is most intense when there are many direct competitors, when industry growth is slow, or when the product or service cannot be differentiated in some way.” [3]

Competition is only a recent challenge for Telstra as it had government protection and maintained an effective monopoly of telecommunications in Australia for many years. However, with the recent deregulation of the market and the increase in players, Telstra has increasingly been threatened with higher competition from competitors. The increase of players in this market will surely cause customers to go ‘shopping’ for the best deals, hence Telstra is being and will be forced further in the future to improve its’ image and offers so as to retain an effective market share.

Thus said, the telecommunications industry has changed as global sentiment towards telecommunications has turned negative in recent years, and has come to the stage where the market currently rewards commercial discipline and conservatism within the industry. [4] In the corrections that has followed these events, plus the collapse of the dotcoms and tier 2 Telcos, and the investment rebalancing post the millennium bug era, an estimated 3 trillion US dollars has been wiped off the value of Telco stocks worldwide in the last two years.

The Australian industry has not escaped this market reaction, or the pressure that accompanies a sudden slowdown in revenue growth from the exciting ride of the nineties. But in this reporting period so far, the Australian telecommunications industry sees a number of carriers earning reasonable revenues and showing some signs of profit improvement, and many are experiencing growth in customers and market share.

Most significantly,...
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