01/06/2004 - 22:00

Population a factor in cost structure

01/06/2004 - 22:00

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A PRODUCTIVITY Commission Report released in 1999 indicated that Australians were paying too much for telecommunications services compared with OECD standards.

Population a factor in cost structure

A PRODUCTIVITY Commission Report released in 1999 indicated that Australians were paying too much for telecommunications services compared with OECD standards. Five years later and not much has changed, according to some at the WA Business News telecommunications lunch.

Others, however, say the comparisons don’t stack up.

Amcom chief operating officer Clive Stein said the main differentiating factor between Australia, and particularly Western Australia, was our geographic isolation and smaller, and less dense, populations.

Mr Stein said these factors directly affected the cost and availability of broadband and other telecommunications services.

“I think when we talk about specifically comparing ourselves against other countries, [we need to] look at the quarter-acre blocks and the span of the city and the population density and compare to European cities,” he said.

“Straight away you can see one is economic and the other one is uneconomic.

“When you take the fact of putting infrastructure in the ground, distance is very important.

“It is a very important cost consideration. So if it is multi-dwelling and inner-city living, the model changes when compared to the suburbs. We’ve got the dream of home ownership and the dream of living as far as Joondalup and beyond, but yet infrastructure to follow the dwelling and population of the people and the demographic just doesn’t work well with an infrastructure model and a return on capital.”

South Korea is often held up as an example of a country leading the world in terms of telecommunications infrastructure – and one that Australia could emulate.

However, Chime Communications CEO Stephen Dalby said we needed to rethink our comparisons.

“If we compare ourselves to Korea, we are comparing ourselves to the wrong people,” he said.

“Korea has had a massive injection from the government for rolling out that broadband infrastructure.

“It’s interesting that, of all the utilities and all the infrastructure that is provided in Australia, State governments are not involved in telecommunications.

“Why is that? There are legacy reasons for it.

“You are always going to be behind somebody and you are always going to be ahead of somebody.

“I think Australia, to use an old hackneyed phrase, is the lucky country.

“Our telco infrastructure is superior to most places you can go around the world. We still might not be completely satisfied with it but that doesn’t mean that we are living in some third world.”

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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