Information and Communications

Technologies in Australia

Joanne JacobsBrisbane Graduate School of

Business

Presentation will cover:

Current developments in commercial information distribution systems

State of network technologies in Australia

Development of multimedia networking

Statistical background

84% of businesses use computers in the business place

72% of businesses have internet access24% of businesses have a web presence25% of businesses placed orders via the

internet (2001-2002)6% of businesses received orders (2001-

2002)Internet income = A$11.3 billion(Source: Australian Bureau of Statistics, 2003)

State of internet businesses

Businesses most likely to have a website are involved in: Wholesale trade Cultural and recreational services Accommodation, cafes and restaurants

Retail businesses are strong users of internet and web presence, but they are not dominant users.

Poor development of internet and website use in construction and health.

Information distribution

Dominated by existing media playersInternet not widely used for information

dissemination except in terms of self-publishing: Growth of SPAM reducing effectiveness of email

as information dissemination tool Other growth markets for collaborative publishing

(ie: web logs, or ‘blogs’) still in experimental stages

Australian Media Overview

Public/private broadcast media and private newspaper system.

No public newspaper, and dwindling circulation for newspapers, generally

Existing newspapers do have web presence and generate income from archival access to past articles, but only a small percentage of resources are dedicated to electronic articles

Broadcast media

3 national commercial television networks2 national public television broadcastersFull radio coverage in metropolitan areas,

but few-no digital systems in place. Radio dominated by popular music with some talkback radio (not as strong as in the US).

Subscription Television

Three players in the market: Austar (satellite), OptusVision and Foxtel (cable).

Foxtel has majority sharehold in Austar, the satellite network

Foxtel and OptusVision have struck a deal for content sharing (initially rejected as anti-competitive, and later accepted by the regulatory authority)

Subscription Television 2

Australian cable and satellite is connected to 22% of homes and generates large losses: Australian total investment to date of A$8

billion, without profit FOXTEL operating business lost A$100

million in 2002Approximately 1.8 million subscribers in 2003(Source: Williams, K. Subscription TV in Australia, 2002)

TV, Subscription TV, Internet

An estimated 99 % of Australian homes have television, with an average of about two TV sets per household.

An estimated 10% of Australian households have subscribed to pay television networks.

An estimated 56% of Australia's total adult population was regularly accessing the Internet in 2002.

(Source: Dept of Foreign Affairs and Trade)

Market share, revenue and costs

Free-to-air networks control 87% of TV viewing

Subscription television attracts 3% of national broadcasting advertising revenues

Programming costs for Foxtel and Optus Vision are between 65 cents and $1 of every $1 revenue

Digital Television

Began in January 2001All Free-to-air (FTA) networks obliged to

carry 20 hours per week of HDTV contentCommercial FTA broadcasters not permitted

to multi-channel due to immature subscription television market

Sales of digital television units very slow. Retail providers blame lack of incentive to adopt. National campaign for digital television now in process.

Digital Television 2

No datacasting licenses allocated beyond the existing media players

‘End’ of analogue services scheduled for 2008 (this is likely to be extended)

Review of digital television is scheduled for 2006. If the market is opened to new commercial broadcasters and rules on datacasting are relaxed, the digital television market represents an opportunity for strong investment and high returns

Broadband

106 Broadband service providers in Australia (May 2002)

423 600 broadband service subscribers (March 2003)

Broadband growing somewhat less than IDC expectations (predicted 132% growth to March 2003; actual growth was 112%)

Cost of broadband is approximately triple that of dialup internet access

Telecommunications

96 Carrier licenses operative as at September 2003

Telecommunications sector dominated by the former monopoly provider, Telstra.

Telstra still part publicly-owned. Bill presently before Parliament to transfer the remaining 50.1% public share of Telstra to private ownership

Telecommunications: Barriers to entry Small population spread over a large geographical

area translates to high cost of network maintenance for low returns.

While 96% of total population have access to copper cable for telephony services, this represents roughly 20% coverage of the geographical space of Australia

In metropolitan areas there is strong network duplication for value-added network services (including subscription television services) – up to 80% duplication of networks

Corporate convergence

Multimedia

Partly as a result of corporate convergence and an anti-competitive market position for ICT players, there has been no strong drive for interactive multimedia services

Little-to-no use of webcams and multimedia in retail sector

Prime use of multimedia tools is in virtual tours for tourism sector

Multimedia 2

Strong online gaming industry (non-casino) Video and voice bundling still not strong in

Australia, but expected to grow in importanceAs broadband applications become more

attractive, the incentive will be there to upgrade existing technologies and drive mass adoption

Wireless sector predominantly experimental, but also expected to grow.