Partially privatised by the coalition government in the late 1990s, it is still 51% owned by the government, which would like to divest the remaining portion but has thus far been blocked: both by a hostile Senate, and because of financial and electoral considerations. Earlier partial floats attracted a great deal of public interest but have been spectacularly poor investments, a majority of which was caused by global sentiment about telecommunications companies first inflating, and then just as quickly deflating the share price. There seems no immediate prospect of the share price climbing back to the level at which the earlier shares were originally sold, and the sale of further parts of Telstra presents twin difficulties to the government: the low current share price indicates that the cash return on the sale of the remaining 51% will not resemble the bonanza of the first sale; and the many thousands of small investors who paid top dollar for the previously floated part of Telstra can be expected to react with deep anger if further parts are floated at a substantially lower price than they paid.
Telstra is the descendant of a merger of Telecom Australia, the government-owned monopoly communications carrier, and a much smaller government body, OTC, responsible for international calls. Facing competition since the late 1980s from Optus and a host of other smaller providers, it retains ownership of the fixed-line network to the home and one of the two pay-tv cable networks and thus all companies offering fixed-line services must deal with Telstra. Opposition phone companies have constantly accused Telstra of overcharging for wholesale access to their networks (notably for ADSL, allegedly to protect their cable-modem broadband product); the ACCC has often agreed but decisions by the regulator are very slow.
Telstra has attempted to expand into international markets. More notable is a joint venture with Hong Kong entrepreneur Richard Li and his company Pacific Century Cyberworks during the late 1990s telecommunications boom. Their undersea cable venture, Reach, has struggled, with its book value downgraded to zero by the company in February 2003 (it continues to operate, though, and the company believes that it may still be viable in the longer term).
In 2002, Telstra also acquired PCCW's remaining 40% stake in Regional Wireless Company (RWC), giving it total ownership of CSL, the most prominent of Hong Kong's six mobile operators.
Despite some setbacks, Telstra remains one of the most profitable telecommunications companies in the world.