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Thursday, 15 December 2011 12:49

Telstra gets telco licences in Singapore and Japan

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Telstra is ramping up its Asian presence. It has secured licences in Singapore and Japan that allow it to own network infrastructure and serve customers directly over this infrastructure, just months after obtaining telco licences in India.

In Singapore, Telstra has secured the Facilities Based Operator (FBO) licence from the Infocomm Development Authority of Singapore (IDA) enabling it to own and operate voice and data networks, systems and facilities. It will also enable Telstra to build the local backbone required to support its plans for new cable submarine capacity to Singapore.

In Japan, Telstra Japan KK has been approved by the Ministry of Internal Affairs and Communications (MIC) for the Registration Type licence. This allows it to own and operate large scale telecoms circuits and facilities in multiple cities and prefectures in Japan, and to deliver products and services over those networks.

Last month Telstra was awarded licences in India that enable it provide international and national long-distance telecommunications and Internet services.

Tarek Robbiati, group managing director for Telstra International Group, said these developments would allow Telstra International to further realise synergies and leverage assets gained following the Reach restructure and would benefit international customers with multi-country operations in Asia.

Reach was a 50/50 joint venture with Hong Kong telco PCCW formed in 1991 that owned capacity on submarine cable networks in the region. Telstra acquired 100 percent of the company in January 2011, after racking up losses of almost $600m on the project.

"For international customers, Telstra will now have greater control over its services," he said. Specifically customers will enjoy access to a more comprehensive suite of connectivity and managed services, better network performance, complete monitoring, local contract billing capabilities, and in-country service centre support.

"In addition, Telstra will have greater control over network architecture design, and be in a strong position to optimise performance, multi-level resiliency, redundancy and reliability."

Telstra has given little indication of its overseas plans, and no indication of what financial returns it expects. The issue was touched on by CEO David Thodey at Telstra's investor day last month, but there were few details.

CONTINUED

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Thodey said to the assembled analysts: "I know you often say 'What are you doing in Asia? You're about to go and spend a lot of money in Asia?' No we're not, but we are and have been in Asia for a long time'¦Asia is continuing to grow enormously and we think there's still a lot of growth there."

He said Telstra was "not going to create our future in Asia", adding, "But we do have this long term presence in Asia. OTC [the Overseas Telecommunications Corporation merged with Telecom in 1991 to form Telstra] was there for 65 years'¦We have more cable in Asia than any other operator. We have more points of presence than any other operator in Asia today. So if you compare it to AT&T, NTT, KDDI, we have more. So what do we do with that? That was why bringing Reach back into the business was so important."

Thodey suggested there were opportunities in providing cloud computing services and managed infrastructure services to large enterprises entering the Asian market.

"We think as the world becomes more global, there'll be cloud computing opportunities; big enterprising saying 'Hey, when we come to Asia we just want someone to manage all that communications infrastructure throughout Asia'. And we have all the capability, but it's been hidden away in the Reach joint venture for the last 10 years, so bringing it out and getting a bit of focus on it has been very important to us."

Telstra has had a long association with Asia, often with mixed success. Former CEO, Frank Blount once said the company aimed to generate 20 percent of its revenue from its overseas ventures by 2000, but in the wake of the Asian financial crisis of the late nineties, his successor Ziggy Switkowski was said to have told wholesale customers at a pre Christmas lunch in 2001 that Telstra's forecasts for revenues from its Asian forays had been out by a factor of 10.

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