Standard Telephones and Cables (Australasia) Pty Ltd
To examine the history of STC in Australia, we start with Alexander Graham Bell. He promoted his new telephone in Europe, and his father-in-law, Gardiner Hubbard, followed him to Europe to set up manufacture. The Belgian government was enthusiastic about introducing the telephone, so Hubbard arranged to set up a new company in Antwerp, Bell Telephone Manufacturing. It assembled phones imported from the U.S. at first, but expanded to design and build its own range of telephones. Subsidiary factories opened in other European countries to assemble phones for their particular markets. They were usually named Western Electric, as this company was now Bell's manufacturing arm.
Over the next quarter century telephone use increased dramatically. In the U.S., two problems arose. The U.S. government became concerned at the power of the Bell company, which was almost a monopoly. The second problem was that the Bell company was in trouble with its customers because it could not meet the growth demands placed on it.
Australia had a Western Electric sales and installation company, although its sales were never large during the WE years. It sold the first telephone exchanges in Sydney and Melbourne to private companies, in the face of some government indifference. Once the new Australian PostMaster General's Department was set up, they standardized on WE switchboards (following the British Post Office lead) so WE had a fairly ready market for their products. Western Electric's local agent, Richard Hungerford, developed close ties with the new PMG and was able to advise on and discuss telephony and wireless - the start of the close cooperation between government and manufacturing industry that was to follow.
The PMG was having the same problems as the Bell company in the U.S. - they could not meet demand. During the Cook Royal Commission into the PMG in 1908, Mr Bell (who was in the country at the time) was invited to address the Commission. He suggested that the CB manual switchboard system be widely adopted as the "most perfect system at present existing". This was undoubtedly commercially motivated, as the Strowger automatic system was increasingly penetrating the market, sold by Bell's rival, Automatic Electric. Bell did not have an automatic system at this time, but had bought the rights to the Lorimer brothers' system and was still redesigning it for production at BTMC. As a result of the Royal Commission's findings, the PMG stayed with CB for most exchanges, but they showed some independence and began installing Strowger step-by-step exchanges for evaluation. As BTMC's Rotary system came into production in Europe they installed and evaluated it as well. At this point the APO and the state Railways were still largely using Western Electric-based equipment, but WE was not manufacturing in Australia. This became a problem during the First World War, when supplies of important electrical equipment ran into shortage due to interrupted shipping from Britain, and Britain's demands on its factories for its own war supplies.
Following the War, Western Electric diversified its product range to include electric generating sets and wireless receivers - all still imported. The PMG's demand for underground cables increased, and was met by imports from the British WE factory and others. Economy measures such as the introduction of WE three-channel carrier systems helped, but the basic problem was the sheer amount of cable that was needed. The copper for the cables was being produced in Australia, shipped to Britain, made into cable, then shipped back to Australia - the shipping costs were a serious impediment to the telephone network's development.
In 1925 Bell did a deal with International Telephone and Telegraph. It sold all its overseas holdings to Sosthenes Behn's ITT. This gave it the money to develop the U.S market, and gave ITT a group of factories and customers. It also removed some of the political pressure by letting Bell meet the needs of its U.S. customers. Following the change of ownership, ITT needed more manufacturing facilities to support the national telephone companies it was administering. Behn's intention was not to make a quick profit, but to build an international network of telephone systems managed and supplied by his own companies. The Western Electric companies were renamed Standard Electric (in various local languages) in Europe, Standard Telephones and Cables in Britain, and Standard Telephones and Cables (Australasia). ITT also now owned Antwerp's Bell Telephone Manufacturing Company. They left this name unchanged, and gradually centralized their research and development there. Under the terms of the sale Bell would not sell internationally, and ITT would not sell into the U.S. market.
All the new ITT companies had manufacturing facilities except STC in Australia, and ITT immediately set about changing this. In 1926 engineer Sandy McPhee arrived. He set up a new factory at Chippendale in inner Sydney and manufacture began. Their first telephone was a licensed copy of Western Electric's 317 wooden wallset, using imported parts and local woodwork. An important introduction was the local assembly of bakelite telephones. At first the cases and many parts were imported from Britain, but as manufacture settled down the factory took over more of the production except the dials and cases. The PMG Department tested the new factory with an order for magneto switchboards and repeater coils. The coils required a high level of precision, but the factory proved up to the task. The PMG adopted the same policy as the British Post Office - contracts were let to local firms where possible to build up Australia's expertise in manufacturing and develop new technology, and reduce reliance on imports.
Wireless transmitters and receivers went into production, as well as public address systems. Importantly, the factory's design department began developing its own designs. By 1930 an all-Australian radio receiver was being produced. Many early wireless stations in Australia and New Zealand were equipped with STC transmitters. The Rotary automatic switching system, inherited from Bell and perfected by BTMC, was selected for installation in New Zealand, but Australia opted for step-by-step, so STC did not yet build exchanges in Australia.
By 1936 STC had to build a new factory at Botany Road, Alexandria. Its factories at Redfern and Chippendale plus the administration staff at the city office, were finally together in a single building. Some space was used to produce high-precision radio valves, which were still imported up to this time. And just in time, too. World War 2 began and STC took on an increasing Defence contracting role. They produced the Type 109 field wireless sets, radio direction beacons, precision parts for artillery gunsights, and airborne wireless sets. Their previous work on expanding the PMG's carrier systems paid off, as Australia at least had an adequate telephone network to carry the wartime traffic. The staff of over 1000 now had to produce parts to replace those previously imported. Even in its main areas of expertise, telephony and radio, STC had imported many parts to include in the locally-produced equipment. The basic No 13 telephone transmitter and the two-magnet receiver had to be redesigned, tooled up for and produced locally with no overseas help. There was one notable gap in the range. Although STC imported electrical cable and insulated wire from Britain, these cables were still not being produced in Australia. A conglomerate of companies including STC set to producing insulated cable, so now most of the equipment could be completely Australian-made during the critical wartime years. The need to produce military parts required that production of civilian items like telephones be ceased for the duration. Quality remained high in spite of wartime pressures. STC was able to produce radio equipment for U.S. forces stationed in the south Pacific areas.
Left: "D" set field telephone
With the outbreak of the war, Belgium was overrun and exports from BTMC and France were closed off. Fortunately most of the design work was removed from the factory in time, and the manufacturing load was taken up by ITT's other companies. ITT set up the Federal Telephone and Radio company in the U.S. and began production there. This factory was intended to supply their markets in Latin America. At the end of the War they also provided Australia with quantities of their FTR804A magneto phone and FTR803 auto and CB phones until the Australian factory could retool for post-War production.
Left: Federal FTR803 CB desk phone
By the end of the Second World War STC was Australia's biggest manufacturer. The company returned to peacetime manufacture. Rather than reduce staff it used its excess capacity to produce electric irons and other domestic appliances. STC also returned to its core business and made large quantities of the new 400 series bakelite telephones and exchange switchgear to catch up on post-war demand. The 400 was based on an Ericsson design, but was substantially redesigned for Australian conditions by STC and AWA. All but the dial would be produced in Australia, following the introduction of new high-pressure bakelite moulding presses at a new Liverpool factory. The automation of the many small country manual exchanges was a priority and a new exchange based on the British 2000 relay was to be produced in large numbers. The contracts were shared between STC and TEL, another local manufacturer (now Plessey). The PMG was still prepared to support local industry, and the Government of the day did not want to lose the expertise that had been built up during the war. They put a condition on the ten-year contracts, though. STC and TEL had to sort out a uniform step-by-step switching system for use throughout Australia. The companies got to work and many country areas finally enjoyed 24-hour telephone service.
In spite of this STC still found time to develop a mobile telephone system for the Snowy Mountains Hydroelectric Scheme vehicles. Rather than decrease after the War, STC's staff actually increased to 2289 by 1948.
A new development also excited the company's interest - television. The Government had decided to introduce it, but which system? STC could see a large consumer market in domestic TV sets and in the transmitters, but there was no technical expertise in Australia on the subject. International Telecommunications Laboratories Inc was a global ITT company formed to centralize and disseminate information on what all ITT's subsidiary companies were up to in the various technical fields. They had knowledge and experience of the three main systems - the British 405-line system, the U.S. NTSC 525-line system, and a new European system, 625-line PAL. Eventually the technically superior PAL system was decided on, and STC began manufacture of transmitters and TVs at the factory in Liverpool.
Another new technology was introduced around this time. Professor Harry Messel of Sydney University's Physics Department enlisted the company's help to produce Australia's first computer, known as SILLIAC. It was valve-powered, used 25 kilowatts of DC power, and was so important to the introduction of computers in Australia that parts of it are preserved in the Powerhouse Museum in Sydney.
By the 1960s telecommunications in Australia needed a major overhaul. There were too many manual exchanges, too many trunk exchanges, not enough phones, cables or telephone numbers, and the population was becoming very unhappy at the shortages. As part of the overhaul a new telephone was proposed. Traditionally Australian telephones had been based on British designs, but the level of technology in Australia had improved. Australia's varied conditions meant that overseas phones were not always suitable, and it would be better to design a local telephone. The result was the Australian Post Office 800 series. Its styling and some of the electronics were based on BTMC's Assistant telephone, the electronics on the British 700 series, and the case was in the latest polyurethane plastics. It also eventually led to the manufacture of transistors in Australia.
Left: 801 ColorFone with imported dial
The new plan would be supported by a new switching technology. Step-by-step would be replaced. There were two contenders - STC's French-designed Pentaconta, and L M Ericsson's Crossbar. Ericssons had no local manufacturing facility, and the PMG was adamant that it was going to be locally-made. The PMG installed a Pentaconta at Kew in Melbourne, and a Crossbar at Toowoomba in Queensland. In the final evaluation, the Ericsson product won. The Government brokered a licensing deal that saw STC and TEL gain ten-year contracts to produce Crossbar under license from Ericssons. LME saw the scope of the project and established their own facilities in Australia, enlarging the country's industrial base further. By 1961 STC was producing Crossbar in cooperation with the other two companies. They continued importing the Pentaconta for PABX sales, eventually filling more than half the market.
Sosthenes Behn retired as President of ITT in 1956. He died the following year aged 75. He never visited Australia, and his death was largely unnoticed here. Worldwide, ITT's role is still debated in historical terms. It was one of the world's first multinationals, and as a result its companies got involved on both sides of a number of wars. Its part in Australia's development cannot be played down. Its local company, STC, developed or helped to develop many Australian industries and moved the country into levels of technology out of proportion to the country's size. ITT's low level of management interference let STC grow into a truly Australian company.
With Behn's death the company's role changed. It withdrew from consumer electronics like TV sets, correctly anticipating the growth of cheaper Asian imports. STC also faced the end of its ten-year contract with the PMG. Ericssons by now was an Australian manufacturer as well, and the STC- TEL duality could no longer be maintained.
STC now drew on one of its major strengths - its sheer diversity of expertise. Asian countries could make cheap consumer goods, but STC was decades ahead in high-quality industrial electronics. It decided to specialise in areas like microwave systems, Defence signaling systems, and power supply. It could draw on overseas expertise from ITT's companies, pooled through International Telecommunications Laboratories, and through BTMC which was now a major R&D centre. STC also became an exporter. By 1969 it was exporting its products to 63 countries. Its reputation for ruggedness to meet Australian climatic conditions helped it gain markets in difficult countries like Vietnam, India and Mexico. The Pentaconta PABX was also exported, as well as a new Metaconta 10C trunk exchange developed by BTMC. In the 1960s and 1970s STC moved into the new field of data transmission.
Unfortunately by the 1970s rising wages made Australian manufacturing expensive, and a number of divisions were closed - Components, Export and Radio Transmission. Production of printed circuit boards and mass-production soldering and construction techniques were developed and introduced to decrease production costs. Increasing transistor and PC board expertise allowed the introduction of keypads in Telecom's Touchfone 805 series, and finally the phasing out of the old rotary dial.
Construction of ARE11 circuit boards, a transistorised upgrade to the crossbar exchange, was a useful spinoff of PCB technology. In 1983 Pulse Code Modulation in a digital carrier system was introduced by Telecom Australia. The contract for the components went to STC, who had imported a system from Britain to become familiar with it and worked with Telecom to develop it. Further sales were made to Telecom in New Zealand in 1987.
Telecom still worked closely with STC. The company got the contract to produce the Goldphone, a leased public coin phone. Most of the phone was produced locally, with a coin mechanism from Anritsu in Japan. Production of other phones kept up, and in one magic week in 1985 STC produced 16,000 Touchfones for Telecom.
Telecom could not keep up with the growth of the private PABX market, and had allowed the commercial companies in. STC was now a major supplier of PABXs to Australia.
In 1981 STC won a Telecom contract to build the N series Commander small business system. It was designed by Nitsuko in Japan, but required some redesign to make it suitable for Australian conditions. Again drawing on expertise from BTMC in Antwerp, STC produced the first Cardphone public telephone for Telecom.
In 1987, suffering from poor leadership and a general loss of direction, the ITT companies were bought by Northern Telecom under their trading umbrella company Alcatel NV. STC Australia became Alcatel-STC.
In 1988 STC, AWA and Telecom produced the Touchfone TF200 to replace the 800 series Touchfones. Despite early problems with the keypad, the phone's descendents are still the standard Australian telephone. 1990 saw the Touchfone T200 Executive, which required an extra telephone production line at Liverpool. Touchfone production was centralized there, while Alexandria handled payphones, Production at Liverpool reached 5000 phones per day, and a major part of this was being exported. Its products now carried the Alcatel name
The late 1980s saw work like circuit board production contracted out, but the company moved back into one of its traditional areas - cramming more phone calls onto a telephone line. They gained the manufacturing rights to an Australian-designed Metropolitan Area Network concentrator and its rural counterpart, the Remote Integrated Multiplexer. These products are now also being exported. Telecom projected installation of 1.000,000 RIM lines by 1998. These RIMs were designed to replace the thousand or so rural electromechanical exchanges still in service
The development of computerised exchanges was met by the design of Alcatel's System 12. The design came from the United States, and was brought to production level by a team that included STC engineers at the BTMC works in Antwerp, also now owned by Alcatel. Telecom intended upgrading its AXE exchange gear and competition for the tender was intense. The $1.5 billion contract would last for three years. At this point AT&T, the successor of the Bell company and Alcatel's chief global competitor, looked at the Australian market and offered their equipment. The situation was tense until the Government decided in favour of the local companies, Alcatel, Ericssons and Siemens.
The introduction of mobile phones and services has given the company a whole new area of infrastructure to develop into. As usual much of the technology was brought in from overseas companies then extensively modified to work reliably in Australia. Telecom now buys in much its telephone needs, though, especially in areas like mobile phones. Other makers entered the market and Telecom's phones now carry names like Thomson or LG. Although most telephone and data equipment is now made overseas, the infrastructure on which they depend is still likely to bear the Alcatel brand.
And so, the company continues, now as Alcatel Lucent. It is a major export earner for Australia, and its R&D and quality control keeps it ahead of most of its competitors.
Bateman J "History of the Telephone in New South Wales" 1980
Conklin R "Federal Telephone & Radio Corporation's Simplified Subscriber Telephone Set" Singing Wires Newsletter, December 2003
Moyal A "Clear Across Australia" Thomas Nelson, Australia 1984
Murray, J "Calling The World" Focus Publishing P/L, Sydney 1995