AOTC had a brand makeover as Telstra Corporation was a monumental event that many people have not fully analyzed. 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 privatized 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.
Time and again, Telstra tried to dabble in various overseas ventures, but all had proved unsuccessful, exemplified by withdrawal from some South East Asian markets and major write downs of joint venture investments. An example is that of the $2.7bn Reach undersea cable with Hong Kong-based PCCW. Recurrent takeovers in the software/services sector have likewise been not always a success. Some cases in point are Telstra’s buying of the KAZ Group in 2004 for over $250 million, its purchase of $636 million for the Australian operations of Trader Classified Media NV in 2004 and acquisition of two classified ad print publications, five complementary online sites, two automotive inserts and the Trading Post brand, all of which were judged to be missteps in investment planning.
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