1. Information and Communications Technologies in Australia Joanne Jacobs Brisbane Graduate School of Business

2. Presentation will cover:  Current developments in commercial information distribution systems  State of network technologies in Australia  Development of multimedia networking

3. Statistical background  84% of businesses use computers in the business place  72% of businesses have internet access  24% of businesses have a web presence  25% 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)

4. 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.

5. Information distribution  Dominated by existing media players  Internet 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

6. 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

7. Broadcast media  3 national commercial television networks  2 national public television broadcasters  Full 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).

8. 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)

9. 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 2002  Approximately 1.8 million subscribers in 2003 (Source: Williams, K. Subscription TV in Australia, 2002)

10. 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)Dept of Foreign Affairs and Trade

11. 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

12. Digital Television  Began in January 2001  All Free-to-air (FTA) networks obliged to carry 20 hours per week of HDTV content  Commercial 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.

13. 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

14. 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

15. 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

16. 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

17. Corporate convergence

18. 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

19. Multimedia 2  Strong online gaming industry (non-casino)  Video and voice bundling still not strong in Australia, but expected to grow in importance  As 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.