Telstra Shares – TLS -  Company Profile

Telstra is Australia’s telecommunication giant. It has similarities with many other large international telecommunications companies, in that the vast majority of countries have now privatised their formerly government-owned telecommunications providers.

And, right across the world, these kinds of companies are currently struggling to adapt to the new landscape. Just like Telstra.

Telstra’s dominant business is providing a vast network of telephone lines, and the associated local, long distance and international telephone calls.

Of course, the company also focuses of the next generation of telecommunications, such as mobile telecommunications, data, internet and on-line, wholesale, telephone directories and pay TV.

The company also has assets and joint ventures in China, New Zealand and Hong Kong.

While the original company was formed as part of the Postmaster General back in 1901, but the current incarnation of TLS was formed through the merger of Telecom Australia and the Overseas Telecommunications Corp (OTC) in 1992.

TLS was privatised and floated in November 1997, with 33% of the company sold to the public. In June 1999, another 16% of the company was sold to the market at $7.40 in the infamous T2 share sale.

Telstra’s customers include most Australians, and range from large corporations and the government to small business and residential customers. Many of its wholesale customers are also competitors who pay for use of Telstra’s infrastructure.

TLS continues to have a dominant position in the Australian market place, but has faced increasing competition.

While Telstra maintains many of its high-value customers and its intimidating economies of scale, the company’s customer base is being rapidly whittled away as younger customers shift away from maintaining fixed line phone services and lack the loyalty of older customers.

The company does have some positives. Telstra is a cash-generating machine, it controls much of the vital infrastructure that its competitors need to use, and it has an extremely broad customer base.

Telstra’s main competitors include Optus, Vodafone and Three.