Optus

SingTel Optus Pty Limited

Company type	Subsidiary of SingTel
Industry	Telecommunications
Founded	1981 as AUSSAT
Headquarters	Sydney, Australia
Key people	Paul O'Sullivan, Chief Executive Jeann Low, CFO Lawrie Turner, CIO
Products	Fixed Telephony Mobile Telephony Internet Access Cable Television Leased Lines Data Transmission
Revenue	$7.760 billion AUD (2008)
Net income	$552 million AUD (2008)
Number of employees	10,679 (2008)
Website	http://www.optus.com.au/

SingTel Optus Pty Limited is the second largest telecommunications company in Australia, and is a wholly owned subsidiary of Singapore Telecommunications (ASX: SGT). The company primarily trades under the Optus brand, while maintaining several wholly owned subsidiary brands, such as Virgin Mobile Australia and Boost Mobile in the mobile telephony market, Uecomm in the network services market and Alphawest in the ICT services sector.

To provide services, Optus owns and operates its own network infrastructure, as well as using the services of other network service providers, most notably Telstra Wholesale. It provides services both directly to end users and also acts as a wholesaler to other service providers. Through its OptusNet brand, it provides broadband, wireless and dial-up internet services.

The company was originally known as Aussat Pty Limited prior to privatisation, when it became Optus Communications Pty Limited. It was later renamed to Cable & Wireless Optus Pty Limited before changing again to its present name.

Overview

Optus building in Adelaide, Australia.

Optus building in Melbourne

Key Optus products and services include:

• Fixed Telephony
  • Residential and Commercial POTS for local and long distance telephony
  • Commercial VoIP and VoDSL
  • Intelligent Network applications, such as free call, 1300 and Interactive voice response services
• Mobile Telephony
  • GSM/GPRS network in all states
  • 3G/HSPA network currently in Adelaide, Brisbane, Canberra, Darwin, Hobart, Melbourne, Perth and Sydney.
  • Satellite Telephony covering all of Australia.
• Internet Access
  • Residential Dial-Up Internet in All States
  • Residential Broadband Internet (via cable and DSL) in all states (except Tasmania and the Northern Territory).
  • Satellite Internet
  • Commercial and Wholesale internet access
  • Secure Gateway services for Federal Government departments
• Cable Television
  • Optus Television service provided in Sydney, Melbourne & Brisbane, including Foxtel Digital
• Leased Lines
• Data Transmission

Retail services are sold to customers via phone, internet or through retail outlets, especially franchise chains such as Optus World, Network Communications, Strathfield, Telechoice, and Allphones.

Subsidiaries

A number of notable wholly owned subsidiaries operate in Australia as part of the SingTel Optus group. These are:

• Information Technology & Network Services
  • Alphawest
  • Uecomm
• Mobile Telephony
  • SIMplus
  • Virgin Mobile Australia

Optus also sells mobile services under the brand name Boost Mobile.

Optus also has a 50% stake in the now defunct OPEL Networks.

Other wholly-owned subsidiaries of note no longer have a significant active role as individual entities. These are as follows:

Reef Networks was formed in 1999 to provide an optical fibre link between Brisbane and Cairns. Optus gained exclusive access to this link in 2001, ahead of acquiring the organisation in 2005.

XYZed was established by Optus in 2000 to provide wholesale business-grade DSL services under an individual brand, but today provides a collection of products only as part of the Optus Wholesale & Satellite division. XYZed established a network of DSLAMs inside Telstra telephone exchanges, utilising Unconditioned Local Loop services to reach end users.

History

AUSSAT and Deregulation

Original 1990s logo

Optus can trace its beginnings back to the formation of the Government-owned AUSSAT Pty Limited in 1981. In 1982, Aussat selected the Hughes 376 for their initial satellites, with the first, AUSSAT A1, launched in August 1985.. AUSSAT satellites were used for both military and civilian satellite communications, and delivering television services to remote outback communities.

Main article: Optus fleet of satellites

With Aussat operating at a loss and with moves to deregulate Telecommunications in Australia, the government decided to sell Aussat, coupled with a telecommunications licence. The licence was sold to Optus Communications - a consortium including:

• logistics firm Mayne Nickless (24.99%);
• UK telecommunications company Cable & Wireless (24.50%);
• US telecommunications company BellSouth (24.50%);
• AIDC Limited (10.00%);
• insurance and investment company AMP (10.00%); and
• insurance and investment company National Mutual (6.02%).

The new telecommunications company was designed to provide competition to then government owned telecommunications company Telecom Australia; now known as Telstra.

Early History

After privatisation, AUSSAT became Optus and its first offering to the general public was to offer long distance calls at cheaper rates than that of its competitor Telstra. The long distance calling rates on offer were initially available by consumers dialing 1 before the area code and phone number. Following this, a ballot process was conducted by then regulator AUSTEL, with customers choosing their default long distance carrier. Customers who made no choice or refused to respond to the mailout campaign automatically remained as a Telstra long distance customer. Customers who remained with Telstra could dial the override code of 1456 before the area code and phone number to manually select Optus as the carrier for that single call. Since 1 July 1997, consumers have the choice of preselecting their preferred long distance carrier or dialling the override code before dialing a telephone number.

The group began by building an interstate fibre optic cable and a series of exchanges between Optus' interstate network and Telecom's local network. It also laid fibre optics into major office buildings and industrial areas, and focused on high bandwidth local, (interstate) long distance, and interstate calls for business. In its early years, Optus was only able to offer local and long distance calls to residential customers connected to Telstra's local phone network. Telstra would carry residential to residential calls to Optus' exchanges, and then the calls would be switched to Optus' long distance fibre optic network.

The Hybrid Fibre-Coax Rollout

These practices meant that Optus was (and still is) the single largest customer of their competitor, Telstra. To become competitive Optus would need to lay its own local phone network. To provide a killer application for this, the Australian Federal government sold subscription television licences. Optus, as well as the Seven Network, businessman Kerry Stokes and American cable company Cablevision, formed the Optus Vision consortium. News Corporation, PBL and Telstra created the rival Foxtel consortium.

Telstra's local phone network did not have the capability to deliver Foxtel pay television to consumers in the early 1990s, so Telstra identified a need to create a broadband network to support this new product.

As Telstra and Optus could not agree on terms for a joint broadband cable roll out, they laid two competing cable networks, in addition to Telstra's existing copper network, at a combined cost estimated at over A$6bn.

Whilst Telstra focused on creating a broadband network specifically for broadcast, Optus designed their cable network to provide telephony services in addition to broadcast television.

The network was initially used to broadcast Cable TV only. In 1996 the Optus "New Deal" promotion of 20 cent local calls was launched by the Australian Prime Minister John Howard making the first local call to an Optus customer supposedly using the new Optus network. This call however was made by the existing Telstra POTS network as the new Optus network was not ready for telephony by the advertised launch date. The real activation of Optus telephony services followed later on in 1996.

Takeovers

24.5% stakeholder Cable and Wireless bought out Bell South's equal 24.5% shareholding in July 1997. The company returned to profitability in 1998 and changed its name to Cable and Wireless Optus Pty Limited. Government relaxation of foreign ownership restrictions paved the way for the company to be floated - with Cable and Wireless increasing its holding to 52.5%) - and listed on the Australian Stock Exchange on 1998-11-17.

During 2001, SingTel launched a takeover bid for Cable and Wireless Optus which was ultimately successful and the company became known as SingTel Optus Pty Limited.

In the 2003 & 2004 Financial Year, Optus reported a profit of AUD $440 million. This was an improvement of AUD $412 million from the previous year. The company has remained profitable since then.

In August 2004 Optus completed a AUD $227 million takeover of UEComm Ltd.

In July 2005 Optus announced it would acquire Alphawest Ltd. for AUD $25.9 million. The buyout was completed in November 2005 and Alphawest is now an operating division of Optus Business.

On 12 January 2006 Optus acquired the remaining 74.15% of Virgin Mobile Australia for U$22.6 m, giving it 100% ownership

OptusNet

Optus purchased one of Australia's pioneer ISP's, Microplex, in 1998 to provide consumer dial-up internet services. . The cable broadband arm was known as Optus@Home from its introduction in 1999 until it was renamed in 2002. ADSL services were offered from February 2004. ADSL2+ services were provided from December 2005.

OPEL Networks

In June 2007, joint venture subsidiary OPEL Networks was awarded government funding towards the cost of building a regional broadband network. Optus is to be contracted to build the network on behalf of OPEL.

In April 2008, after a change of administration, the new government terminated the funding agreement and the project was halted.

Main article: OPEL Networks

Terria

Optus is part of a consortium – now known as Terria – that in July 2006 announced their intention to make a combined bid to build the proposed National Broadband Network.

Main article: Terria (consortium)

Infrastructure

Optus' fully owned network infrastructure consists of:

• Network Backbone
  • Terrestrial Fibre Optic Network
    • Cairns to Brisbane
    • Brisbane to Sydney (fully diverse over two physically separate paths)
    • Sydney to Melbourne (fully diverse over two physically separate paths, one via Canberra, one via the coast)
    • Melbourne to Adelaide
    • Adelaide to Perth
  • SDH Digital Microwave
    • Hobart to Launceston
  • Satellite
    • Fleet of geostationary satellites (See Optus fleet of satellites)
    • International Earth Stations in Sydney and Perth
    • National Earth Stations in Brisbane, Canberra, Melbourne, Adelaide, Perth, Hobart and Darwin
  • Regional exchanges in most capitals
  • Telehousing Data Centres in Melbourne and Sydney
• Customer Access Network
  • Hybrid fibre-coaxial (HFC) network in Sydney, Brisbane and Melbourne, providing consumer fixed telephony, cable internet and cable television services.
  • CBD optical fibre rings in Sydney, Melbourne, Brisbane, Adelaide, Perth and Canberra, providing direct access for corporate and government services.
  • DSLAMs in certain Telstra local telephone exchanges in all states. Originally only providing business-grade DSL services, newer installations also provide consumer DSL and POTS telephony.
• Mobile Telephony
  • GSM network in all states.

Part-owned network infrastructure includes:

• 3G mobile network, a joint venture with Vodafone Australia
• Southern Cross Cable, a fully diverse submarine optical fibre link across the Pacific Ocean between Sydney and California. The SingTel group owns a 40% interest in Southern Cross Cables Limited. This interest was originally owned by SingTel Optus Pty Limited, before ownership was transferred to parent company SingTel during the March 2006 - June 2006 quarter.
• Regional broadband network (under construction), owned by OPEL Networks, a joint venture between Optus and Elders.

OptusNet is one of only five ISPs in Australia to provide Cable internet (the other four are BigPond, Neighbourhood Cable, TransACT and e-wire). OptusNet is also one of the few ISPs in Australia to currently provide ADSL2+ via its own DSLAMs, which it also resells to other ISPs.

Outsourcing

Since 2005, Optus has outsourced some customer service functions to Convergys, with the outsourcer providing 800 staff operating offshore in India, supplementing Optus' 3,000-plus onshore call centre staff. . Some functions have also been supplemented in The Philippines.

In October 2006, Optus announced that it would outsource 100 contracting jobs to a fellow SingTel subsidiary, IT company NCS, in Malaysia.

External links

• Optus
• OptusZoo/ OptusNet
• Alphawest
• Kids Help Line
• Optus/Telstra How it all works?? Whirlpool forum post
• SIMplus
• Singtel
• Uecomm
• Virgin Broadband Australia
• Virgin Mobile Australia
• XYZed
• Photos: Optus's new home (ZDNet Australia)
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