7.3.3  Sector outlook

The structure of the telecommunications sector in Australia is largely a function of government policy and regulation reflecting:

■  the legacy of privatisation, and the recent re-entry of government into telecommunications infrastructure ownership;

■  the lack of competition in some elements; and

■  the small number of infrastructure service providers for a population spread over a large land-mass.

Rolling out an open access, wholesale-only fixed line broadband network in a cost-effective manner is a key telecommunications infrastructure challenge facing government and private sector providers over the next five years. High capacity fixed line services are vital to deliver high bandwidth services in themselves, but they are also essential to the operation of mobile services. Australia needs to improve the current speeds of fixed line broadband access to maintain international competitiveness, and this is one of the objectives of the NBN.

The NBN offers the potential for major economic and social benefits across the country. This is reflected in the multi-billion-dollar investment in the NBN by the Australian Government over the next 5 to10 years.

Efforts are being made to realise the potential social benefits from this investment, such as developments in tele-medicine and online delivery of education.

Considerable attention should be directed towards maximising the benefits of the NBN. An example lies in the area of telecommuting. Australia's take-up of telecommuting appears to be relatively low compared to other countries, although there is recent evidence suggesting the rate of telecommuting may be growing.256 This may be as much a function of workplace and cultural issues as of any shortcomings in the telecommunications services themselves.

As noted elsewhere in this report, the economic cost of transport network congestion is already a serious problem and projected to get significantly worse. It is a serious drain on the nation's productivity. By enabling some people to avoid having to physically travel, telecommuting has the potential to:

■  raise productivity; and

■  moderate the demand for infrastructure, thereby deferring the need to fund new infrastructure.

The Australian Government's December 2014 statement on regulatory and structural reform in the telecommunications sector adopts the following overarching regulatory policy principles:

■  regulation should allow competition at both the retail and wholesale/infrastructure levels;

■  to the greatest extent possible industry players should be treated consistently under the regulatory framework; and

■  new high-speed broadband access networks (which control 'last mile' connections to consumers) should be vertically separated.257

Competition in the telecommunications sector has driven productivity improvements and raised service standards for the majority of consumers. Ongoing competition in the sector, including in the delivery of broadband services, is to be encouraged.

Market forces and the private sector will continue to respond to demand in urban areas where a commercial rate of return can be achieved. However, parts of rural and remote Australia will require continued government assistance to access services similar to those available in the rest of the country. In the absence of a significant technological breakthrough, this is unlikely to change during the 15-year horizon of the Australian Infrastructure Plan.

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256.  Deloitte Access Economics (2011a) and Australian Bureau of Statistics (2013b)

257.  Australian Government (2014c)