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Telecom growth brings good news

Telecommunications growth appears set to continue which is good news for the property industry.

Growth in the communications industry has consistently been between 6 per cent and 13 per cent throughout the 1990s. Communications is now about 5 per cent of GDP.

Australian Bureau of Statistics’ data shows the number of businesses in the sector grew by 31 per cent in 1996-97 and 41 per cent in 1997-98.

However, Telstra retains about 70 per cent of industry revenue. Its market share is expected to continue to decline, which will open opportunities for competitors.

Strong investment has provided new products to the marketplace. Wireless communications and fibre optic technology allow for applications and services unheard of ten years ago.

Booming demand for telecommunications companies in capital markets has financed new entrants, product development and marketing.

There are now some thirty-one licensed telecommunications carriers and 400 other businesses providing telecommunications services. There are also about 500 Internet service providers in Australia.

Productivity gains from new technologies are contributing to industry investment.

The explosive growth in communications usage is generating efficiency gains from economies of scale.

These productivity gains, aided by deregulation, have benefited consumers with lower costs.

The resulting growth has helped to underpin recent increases in demand for tenancies, especially those which possess the necessary telecommunications infrastructure.

This growth is good news for the property industry in WA. Falls in mining investment in WA following the Asian crisis resulted in weaker demand for property.

Telecommunications growth has helped to compensate. It appears that this growth is set to continue.

l Joe Lenzo is Executive Director of the WA Division of the Property Council of Australia.

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