It was 2003.
Telstra had just seen its expensive foray into Asian networks – the Reach
joint venture with PCCW – written down to zero. But the company was
riding the wave of record profits. And later in the year, then chairman
Bob Mansfield and CEO Ziggy Switkowski would contemplate a major
convergence move with the mooted multi-billion dollar takeover of
Australian newspaper company Fairfax.

So, in the interim, what
was the subject of Telstra’s global attentions? The tiny Persian Gulf
kingdom of Bahrain, the 600sq km island with just 700,000 population.
Bahrain telecom carrier Kalaam has revealed that its foreign partner
for its unsuccessful bid for Bahrain’s number two GSM licence in 2003 was
none other than Telstra. Possibly it was a good bid to lose, as the
successful bidder, MTC Vodafone, has since struggled to build market
share, while Kalaam has pursued an apparently promising alternative
path as a major reseller there.

But the revelation serves to
highlight Telstra’s lack of strategic focus or success in pursuing
acquisitions internationally since it bought out CSL in Hong Kong in
2002.

Since then it has been linked to mooted purchases of
stakes of Excelcomindo in Indonesia and Idea Cellular in Indonesia. It
also made a noticeable exit from East Timor despite having provided
temporary telecom services during the transition period between
Indonesian rule and independence, and was a notable non-starter in the
Papua New Guinea telecom privatisation process, ceding involvement to
the likes of Korean, African and Fijian companies. In recent years the
firm has also exited or failed to build on positions in the
Philippines, Indonesia, Vietnam, Laos and Sri Lanka. In the meantime,
firms such as Norway’s Telenor, SingTel and Sweden’s Millicom have
snapped up much of the available south-east Asian telecom real estate.

Current
CEO Sol Trujillo has said in recent speeches that Telstra is mindful of
the Asian opportunity, while the company’s corporate blog was at pains
yesterday to praise Spanish carrier Telefonica as a model telco, a firm
which has expanded into Europe in recent years notably with the O2
acquisition. Perhaps a change of strategy is under way? Or perhaps not.

Telstra’s
blog attributes the success of Telefonica’s expansion to the support it
got from domestic politicians. The last time Telstra got support from a
local politician was in 1995 when then PM Paul Keating lobbied then
Indonesian president Suharto to ensure that Telstra won a share of a
fixed line tender. It subsequently found itself inserted as an odd fit
into a Japanese consortium building new networks in regional Java, much
to the chagrin of lead partner NTT!

Peter Fray

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