The history of telephony in Australia
The dawn of telecommunications
A picture depicting the Planting of the first pole on the Overland Telegraph line to Carpentaria, NT. In 1860, the Victorian government organised an expedition led by Burke and Wills to cross the continent from Menindee to the Gulf of Carpentaria.
Before the telegraph system, Australia was largely isolated from the rest of the world. The only international communications were expensive postal services that took months to take messages to their destinations by ship. Even across Australia the lack of roads meant that it could take months to send messages from Sydney to Perth.
In 1854 the first telegraph line was laid from Melbourne city to Williamstown. This was followed in South Australia with a line from Port Adelaide to Adelaide city in 1856.
These telegraph lines were immediately popular. In Victoria there were 14,738 messages sent in 1856 and this almost tripled in a year to 35,792 in 1857.
The separate colonies soon agreed to collaborate on an intercolonial telegraph network. The first links between Melbourne and Adelaide and then Melbourne and Sydney were activated in 1858. At this time any messages crossing colonial borders were transcribed onto paper by an operator, transported across the border and then retransmitted.
An underwater cable was laid from Tasmania to Victoria in 1859. However, this soon failed and it wasn't until 1869 that a replacement was working successfully.
Queensland's first telegraph line was introduced in 1861 and connected to Sydney in the same year. However, the first line in Western Australia was not introduced for another ten years and Perth was not connected to the intercolonial network until 1872 with a line to Adelaide.
By 1861 there were 110 telegraph stations spread across the eastern colonies and by 1867 Victoria alone was sending 122,000 messages a year (compared to about 7.92 million in the US and 5.78 million in the UK).
The first international news service, Reuters , opened its doors in Australia in 1860, but the price of news was very high. The cost per word for a message from London was about equal to the average weekly wage.
In the 1870s, the colonies began establishing international telecommunications links, with a privately owned cable to Singapore from Port Darwin introduced in 1870. The first link to New Zealand was in place by 1876 and a link to Jakarta (Batavia) by 1889.
Australians took to the new technology very quickly. In many ways this system helped Australia begin thinking of itself and acting as one nation rather than as a collection of isolated colonies.
The introduction of telephones
The first telephone system in Australia was a private system connecting the offices of Robinson brothers in Melbourne and South Melbourne in 1879. The first telephone exchange was in place in Melbourne the following year, shortly before Ned Kelly was convicted and hung. By 1884 there were about 8,000 calls per year handled by the exchange, or around 20 per day.
The first coin-operated public phones appear to have been installed around 1890, only a few years after the first ones appeared in the USA. At this stage there was still no national telephone network - each colony's Postmaster General was responsible for the network in their colony.
A photo of PMG (Postmaster-General's Department) manhole, Perth, Western Australia. Photograph by Greg O'Beirne, taken 31st July 2004.
In 1901, the newly introduced Australian Constitution gave the new Commonwealth Government power over all postal, telegraphic, telephonic, and 'all other' communications services. The first Postmaster-General (PMG) became responsible for managing all domestic telephone, telegraph and postal services.
When the department was founded there were around 33,000 phones across Australia, with 7,502 telephone subscribers in inner Sydney and 4,800 in Melbourne's central business district. A trunk line between Melbourne (the headquarters of the PMG Department) and Sydney was in place by 1907, with extensions to Adelaide in 1914, Brisbane in 1923, Perth in 1930 and Hobart in 1935.
In 1946 the Overseas Telecommunications Commission (OTC) was created under the Postmaster-General's control to manage overseas telecommunication services.
The Postmaster-General's Department (PMG) continued to grow in size and became a very influential part of the Commonwealth Government. Beginning with 16,000 staff it grew to over 120,000 by the late 1960s, or almost 50 per cent of all Commonwealth employees.
By 1975 the telecommunications industry had become so large that the Commonwealth government decided to separate post and telecommunications. The Postmaster General's Department was split into the Australian Postal Commission (Australia Post) and Australian Telecommunications Commission (ATC).
The Australian Telecommunications Commission went on to change its name several times before finally settling on the name Telstra (Telecom Australia) in 1993.
Through the 1970s pressure began mounting to open Australia's telecommunications system to competition. Companies and households wanted to receive information faster and take advantage of many of the new technologies being introduced elsewhere in the world.
The Federal Government decided to introduce a publicly owned satellite system to deliver television, radio and other telecommunications services to regional Australia. This was established in 1981 as AUSSAT and began operating in 1985 when the first satellite was launched. By 1987 all but the remotest areas of Australia had basic telephone services.
At the same time the government had spent the last ten years debating how to open the industry to competition. Finally in May 1988 the Federal Government announced that it would retain Telecom, OTC and AUSSAT as public monopolies but allow the introduction of competition in value-added services and cabling. Pricing would be controlled to prevent competitors from being undercut by the government monopolies.
Australian telecommunications competition
In 1990 further reform was discussed. In 1991-92 this led to Telecom and OTC being merged into a single organisation (later Telstra ) and Optus was licensed as a private competitor. AUSSAT was sold to Optus, shifting the cost of maintaining the nation's satellite system to a private company.
Shortly afterwards Vodafone was given a license to operate a third mobile phone network alongside Telecom and Optus.
The fixed-line telecommunications duopoly of Telstra and Optus was given a time limit. In 1997 other competitors would be allowed to offer telecommunications services in Australia.
Optus originally only offered local and long-distance phone calls to residential customers and laid fibre-optic cables into major office buildings and industrial areas, gradually expanding it's services to offer business telephony and internet access. However, Optus used Telstra's local phone network and only switched customers onto it's own network for long-distances. Optus quickly became, and remains, Telstra's largest customer.
The Commonwealth Government, in an attempt to improve Australia's telecommunications capacity and encourage the roll-out of a local phone network to compete with Telstra, decided in the mid-1990s to sell licenses for subscription television. Optus, Channel Seven , the Packer family and the American Cable network Cablevision formed the Optus Vision consortium while Telstra and News Corporation formed Foxtel .
Other groups also applied for and were granted subscription television licenses, including the ACT government and other investors in a consortium known as TransACT .
In 1997 the Federal government, opened up the Australian telecommunications market to other companies. It also decided to sell at least part of Telstra to improve its market competitiveness.
About 33 per cent of Telstra was sold on the Australian Stock Exchange to private investors, followed by a further 16.6 per cent in September 1999.
The Australian Federal Government now intends to sell the rest of its shares in the near future, making Telstra a fully privatised telecommunications company.
Telephony in Australia snapshot
||First telephone service launched, connecting Melbourne and South Melbourne offices of Robinson Brothers
||First telephone exchange opened in Melbourne, shortly before the hanging of Ned Kelly
||First public telephone exchange based in Sydney, making telephone use and ownership available to the public in NSW - barely six years after Alexander Graham Bell patented his telephone
||Around 7,757 telephone calls handled through the year
||The Federation of the Commonwealth of Australia established the Postmaster-General's department to look after all communication networks in the nation
||Australia ranked seventh in the world for percentage of telephone users
||On 1 July, the Postmaster-General's department was split into the Australian Postal Commission (Australia Post) and the Australian Telecommunications Commission (Telecom Australia)
||All areas in Australia had basic telephone services, no matter how remote. All Australians linked by a single infrastructure
||The Australian Telecommunications Commission was changed to the Australian Telecommunications Corporation (ATC). Telegram operations were handed over to Australia Post
||The Overseas Telecommunications Commission merged with ATC to form the Australian and Overseas Telecommunications Corporation (AOTC)
||The AOTC was renamed Telstra Corporation
||Optus began using its own infrastructure, a step towards open competition
||Other telecommunications players allowed to enter the general telephone market - Full competition for Telstra starting July
||Telstra partly privatised in November, with about 33 per cent of the company sold
||A further 16 per cent of Telstra shares sold by Federal government in September
||The Federal government plans to sell the rest of its Telstra shares, fully privatising Telstra in the near future