Technology Australia: Government Prioritises High-Speed Broadband Connectivity Among Rural Communities

Euromonitor International’s Australia Technology, Communications and Media Country Briefing highlights the antipodean nation’s technological advancement and increasing penetration rates of advanced digital services among affluent and tech-savvy consumers. Most of Australia’s population and digital spread is concentrated in large cities such as Sydney and Melbourne, and providing high-speed broadband to remote, rural communities has been a logistical challenge. The government, on its part, has prioritised rural broadband connectivity with the National Broadband Network (NBN), which aims to provide 8.0 million broadband connections, covering all households, at speeds of up to 100Mb/s by 2020.  By December 2016, more than three million homes are expected to be connected to the NBN.

Australia-Tech

Source: Euromonitor International

Global leader in mobile broadband connectivity and e-governance but household telecom spending weakens due to rising unemployment and income inequality:

  • Total capital investment in telecommunications stood at AUD9.7 billion (US$8.8 billion) in 2014, a 28.1% growth in real terms over 2009. In 2014, investment increased at a real annual rate of 2.0% following an expansion of 2.4% in the previous year. Total telecommunications revenues stood at AUD40.9 billion (US$36.8 billion) in 2014, a 12.0% contraction in real terms over 2009. Total telecom revenues recorded an annual real contraction of 2.3% in 2014, compared to an 8.2% decline in the previous year;
  • Total mobile Internet subscriptions reached 27.8 million in 2014. Mobile Internet subscriptions as a percentage of total mobile subscriptions stood at 108% in 2014, compared to 41.3% in 2009. Australia occupied the second position globally after Macau in terms of its mobile Internet penetration as of 2014;
  • The percentage of households possessing a broadband-enabled computer stood at 79.7% in 2014, up from 67.3% in 2009. Australia occupied the 15th position in terms of its household broadband penetration rate in 2014 out of 85 countries, ahead of all other countries in Australasia & Asia Pacific except Singapore and Hong Kong. The country occupied the 10th position in 2009;
  • Average household spending on telecom services stood at AUD2,220 (US$1,996) in 2014. Spending contracted at a real annual rate of 1.7% in 2013 and 0.9% in the following year. Average household spending on telecom equipment stood at AUD108 (US$97.2) in 2014. Spending declined at a real annual rate of 2.4% in 2014 following a 3.2% contraction in the previous year;
  • Total value of Internet retailing stood at AUD15.1 billion (US$13.8 billion) in 2014, a growth of 186% over 2009 in real terms. At 339%, consumer healthcare had the highest growth rate over the period 2009-2014 while apparel and footwear expanded by 278% over the same period. The Australian unit of eBay and Amazon are the most popular online marketplaces;
  • According to the UN’s E-Government Survey 2014, Australia was ranked second in the world out of 193 surveyed countries for e-government development. The country figured in the 12th position in the 2012 ranking out of 190 countries.  The e-government portal www.australia.gov.au provides comprehensive e-services both at the local and national levels.

Can the NBN address Australia’s slow and expensive broadband?

Australia lags behind in the developed world in terms of its broadband speeds. Moreover, the broadband market is dominated by the fixed-line incumbent Telstra, which has kept prices high. The NBN, on the other hand, aims to make cheap, superfast broadband available to all citizens, thereby driving growth of e-commerce, mobile gaming, video-on-demand (VoD) and a host of other digital services. The government introduced changes in the project’s technology in 2014, replacing the original fully fibre-optics based-model to a mix of technologies including fibre and copper. While this was done to expedite network construction and reduce broadband costs, it has been argued the new technology specifications will keep speeds low without addressing high prices. For instance, a report by cloud service provider Akamai states that the move to a partly copper-based network will slow down speeds going forward. Consumers might also have to pay higher prices to watch high-definition (HD) videos online due to additional charges imposed by the NBN on service providers such as Netflix.