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RealTime IT News

Telstra Flexes Muscle in Australian Net Industry

Australian telecommunications carrier Telstra is consolidating its formidable array of Internet assets in preparation for the long-awaited announcements of its partners in building its portal site.

The company last week exercised its option to buy out minority owners of Pacific Access, which operates the most popular Web site in the country, the White Pages telephone directory, as well as the Yellow Pages commercial directory -- in addition to print versions of both -- and also the Australian version of the Alta Vista search engine.

Telstra CEO Ziggy Switkowski also made a speech at a business lunch in Brisbane last week where he hinted at the directions the carrier would take on the content side, including possible partnerships with media companies like Fairfax and ecorp.

These movements come only weeks after Telstra locked down its Internet infrastructure policy when it named the suppliers for its Data Mode of Operation (DMO) project.

The Pacific Access deal was the result of a 1991 contract which established the business as a joint venture between Telstra and four smaller companies. Two of those were bought out by Telstra in 1997, with Bell ActiMedia and Edward H. O'Brien retaining 12.5 percent stakes. Pacific Access will now become a wholly owned subsidiary of Telstra, continuing to operate as a separate entity.

Australian media companies such as Fairfax, ecorp, News Limited have been much more active than ISPs and telcos like Telstra and OzEmail in building alliances and joint ventures for the local industry, but Switkowski admitted Telstra was now in discussions with these and other content companies.

One company will not be likely to be party to discussions, however -- ecorp has just dropped a deal worth AUS$4 million (US$2.6 million) to provide content to Telstra.