General Overview

The development of telecommunications in Australia has been dominated by the need to provide services to a population congregated in cities separated by long distances, while reaching remote areas with basic services and linking the cities with high capacity services.  The telecommunications services market in Australia is significant, contributing more than five percent to Australia's GDP. It is a sophisticated and developed market, yet offers opportunity for growth in certain sub-sectors. Generally, there are opportunities in the areas of broadband access, data communications services and content provision.

Telecommunications services in Australia include:

Fixed telephone services; Mobile services; Data services (including online services, value-added voice services, voice mail, email); Broadband services (including high-speed Internet, interactive services); Interactive television, games, digital TV; Content providers; e-commerce and Mobile commerce (or M-commerce).
Over the last decade, the Australian telecommunications industry has evolved from a single carrier to a dual carrier and finally a multiple carrier service provider structure.  Since deregulation in 1997, the telecommunications market has experienced a period of rapid growth.   Australia’s roughly 18.5 million population use about 10 million copper phone lines.  This equates to 525 phone lines per 1000 people.
The Australian and Overseas Telecommunications Corporation (Telecom Australia) is a government-owned, regulated, public utility that provides 95 percent of Australian households with telephone service. It is the telecommunications leader in the Asia/Pacific region, as well Australia's second largest employer.
In no other country in the world has modern telecommunications played such a pivotal role in bridging vast distances within a country, and in bringing an isolated continent into direct contact with the 'outside' world, than it has in Australia. Australians have traditionally embraced and improved upon technologies that would help them reduce their domestic and international remoteness.

International communications - growing infrastructure

Australia has an international fiber-optic cable capacity in excess of one terabit. Bandwidth capacity is over four terabits.

Australia's international cable connectivity to the US and Asia is via high capacity fiber optic cables secure and self-restoring cable loops. Automatic rerouting offered by Australian-based telecommunications hubs is of superior quality and reliability in the region.

The new Australia Japan Cable connects the east coast of Australia with Japan and North America. It has doubled existing broadband capacity to the west coast of the United States and increased the capacity to North Asia by 15 times.

Telecommunications - A healthy domestic picture

Australian domestic networks consist of fibre-optic, wireless, satellite and microwave systems. Fiber-optic is the predominant technology. Major networks are Dense Wave Division Multiplexing (DWDM) based, making the upgrade of existing cables straightforward.

Total bandwidth capacity of satellites covering Australia is estimated to be four Gbps.  NSW carries the majority of Australia's Internet traffic and is well placed to capture the rapid growth of e-commerce.

Market size

While Australia is ranked 54th in the world by population – it is the fourteenth largest ICT market in the world and the fifth largest ICT market in the Asia-Pacific region, after Japan, China, India and Korea. Indeed, the industry in Australia continued to enjoy a strong compound annual growth rate of 12.8 per cent between 2003 and 2008 – faster than Japan, Hong Kong, Singapore, South Korea and Taiwan. The 30,300 ICT businesses in Australia generate revenues in excess of A$120 billion.

As a market, Australia has attributes in common with many other countries around the world. With business and government organisations that span across all sectors and range from very large organisations to small and medium-sized businesses, companies can experiment in Australia then use new approaches elsewhere.

There are opportunities from strong demanding vertical markets including transport and communications (23.5 per cent), finance and business services (17.1 per cent), retail and Wholesale (4.7 per cent) and the Australian Government (4.6 per cent)

The EIU’s 2008 E-Readiness Report benchmarked Australia fourth for eReadiness globally. The EIU’s 2008 IT Industry Competitiveness Report also highlighted Australia’s high IT intensity, noting Australia had the 9th highest IT spend per population (i.e. high density of market), and a very respectable Broadband penetration of population at 33 per cent (compared to Singapore at 20 percent, the US at 23 per cent and the UK at 26 per cent).

Market Updates

o ICT industries in Australia earned a total revenue of $120 billion in 2007. ICT specialist firms accounted for 89.1 per cent of this total. Telecommunications services accounted for $34.9 billion, computer wholesaling for $20.7 billion and computer consultancy services for $19.5 billion.

o The ICT industry directly accounts for some 4.6 per cent of Australia’s GDP8 and enhances the contribution to GDP made by every sector.

o Australian exports of ICT amounted to $5.175 billion ($3.02 billion in goods and $2.155 billion in services). Major export markets include the USA, UK and ASEAN. Australia's imports of ICT were $26.1 billion ($22.89 billion in goods and $3.209 billion in services). Major sources of imports include China, ASEAN and the USA.

o Australia led all other OECD countries with the contribution of ICT capital to GDP averaging 0.68 per cent per annum between 2001 and 2006.

o 19% of professional migrants arriving in Australia during 2004-05 were computing professionals.

Strong Demand in Vertical Markets Driving Growth of ICT

ICT is a major contributor to the Australian economy as illustrated by the data set out above, the growth of the industry is directly/indirectly affected by or dependent on the key industry verticals.

o Healthcare- Spent $2.06 billion on ICT in 2007, Australia is amongst the most progressive countries in the eHealth sector, this has facilitated significant advancements through the development and application of products and services in areas such as management software, telemedicine and online data services.

o Banking and Finance- The use of ICT and the internet in particular, has had a substantial influence on the finance sector and reshaped the competitive scenario. Financial institutions tend to adopt the most advanced technological solutions and use it to improve the quality of service for their customers12.

o Education- The Australian e-learning market is totally relying on ICT products and services. Online courses are being provided more widely in the tertiary sector and ICT is central to research as well as online teaching of domestic and international students. International education is a major export industry for Australia, with economic benefits estimated at more than $4 billion per year.

o Transport and Logistics- Australia has realised the need to manage traffic and make better use of existing road infrastructure and is now an exporter of traffic management systems. Recent advances in transport and logistics include the use of e-business applications to enhance customer expectations of reliable delivery, and there is now greater emphasis on tracing and tracking loads.

o Mining and Resources- The mining industry is becoming increasingly more efficient by using developments in technology. Software developed for the mining industry is a particular strength, with over 60 per cent of the world’s mining operations utilising software developed by Australian companies13.

o Government- The government is now adapting a more connected approach to service delivery which means they will become more efficient and will deliver an even more coordinated and citizen-driven focus to the government’s e-government initiatives.