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.
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 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.
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