Floodgates open for phone, pay TV

Back in 1990, Australians could watch five free-to-air TV networks and if they wanted one of those expensive new-fangled mobile phones, it was Telecom or nothing.

Freeing-up Australia's media and telecommunications landscape remains a work in progress but the first major steps were taken in the late 1980s and 1990s.

Cabinet papers for 1990 and 1991, released by the National Archives of Australia, show the Labor government of Bob Hawke started thinking seriously about reform and setting a timetable.

At that time, there were three government-owned carriers: Telecom and OTC providing overseas phone services, and AUSSAT providing satellite services.

Then communications minister Kim Beazley said the primary concern was to increase competition so that the economy could benefit from new technologies which increasingly characterised the sector.

"The pace of change internationally has meant that the degree of competition of the telecommunications industry in Australia is increasingly out of step with other developed countries," he said in a submission to cabinet in May 1990.

Considering Australia's vast size and dispersed population, Telecom and its predecessors had done remarkably well in providing basic phone services even in the most remote locations.

But the world was moving on and soon the internet would arrive.

The new Telecommunications Act was passed in 1991 with the objective of making the first steps towards opening the market to full-scale competition.

Telecom and OTC merged and the new entity called Telstra was formed in 1993. Privatisation, started in 1997.

Beazley wanted just one additional mobile phone provider but Treasury argued that a duopoly wouldn't yield performance outcomes very different to the existing Telecom monopoly.

In other areas, Treasury wasn't quite so prescient.

It said the mobile services competed at the margin with fixed network services. This was after all an era well before mobiles became ubiquitous.

Treasury also predicted CDMA would be the next-generation mobile technology, supplanting GSM, which has since become the global default standard.

After an extended process of considering bids for a second provider, the government settled on Optus which was granted its carrier licence in November 1991.

Optus launched its mobile network in May 1993. Meanwhile Vodafone had been granted a mobile licence in 1992.

Then there was TV. Pay TV was a staple of overseas markets but not Australia.

Beazley had a broad vision of where this was all going, declaring in August 1991 that pay TV would provide a low-cost choice to consumers for quality in-home entertainment, education and information services.

"Its introduction will be financed by higher income groups as was the case with telephony, automobiles, radio, TVs, CDs etc and lower income groups will reap the benefits of improved economic welfare over time," he said.

The government lifted the moratorium on pay TV from October 1, 1992, leaving delivery technology to the commercial providers.

That opened the floodgates, with the first provider Galaxy launching in January 1995. Foxtel, a joint venture of News Corporation and Telstra, launched in October 1995 and is now the dominant player.