Australian Telecommunications

[Dave Farber <farber () central cis upenn edu>]

       Australian Telecommunications Striving for World Best
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The overall picture emerging from the Bureau of Industry Economics' 
Telecommunications Benchmarking report released today is one of 
Australia having to run to keep pace with its international 
counterparts.


"International Performance Indicators - Telecommunications 1995" makes 
business user price, quality of service and operational efficiency 
comparisons between the Australian telecommunications industry and 
international best practice.


Telecommunications price comparisons show that Australia performs 
relatively well in some areas, but less well in others. 


Australian prices compare relatively favourably for mobile charges, 
international calls and the basket of leased line services, but are 
relatively high for the basket of packet-switched data network 
services and the basket of local and long distance services to 
business users. 


While international comparisons are difficult to interpret and caveats 
apply, in terms of the  composite business basket Australia ranks 
slightly above the OECD average, at 11th out of 24, a ranking that has 
remained unchanged since 1989. 


Time series analysis reveals that price falls for the basket of 
national services and for international calls in Australia were less 
than the OECD average, while mobile services prices in Australia have 
fallen by somewhat more than the average. 


Countries with competitive market structures have experienced larger 
price reductions than countries with non-competitive market structures 
during the 1990s.


Quality of service comparisons show that Australia's performance was 
below international best practice on most quality of service 
indicators, such as call completion rates and fault clearance, up to 
and including 1992-93. 


Australia compares favourably in terms of the take-up of cellular 
mobile and optical fibre deployment, but ranks below most comparable 
countries in terms of digitalisation of fixed network mainlines, and 
the availability of itemised billing. Recent network investment 
announcements are to be welcomed as ongoing investment in 
modernisation of the fixed network is required if Australia is to 
reach best practice.


While labour productivity in telecommunications in Australia is 
improving, it remains low by international standards. Australia's high 
network usage led to a better but still below average performance in 
terms of capital productivity. 


Overall, Australia's performance is reasonable, but there is no room 
for complacency.  Telecommunications prices are falling, but they have 
further to fall if we are to match the world's best performers. 
Quality of service is improving, but there is much further to go to 
reach best practice. Operational efficiency is improving, but 
continued efforts are required. 


Since the introduction of competition in telecommunications Australia 
has moved ahead with the leading pack. Relaxing the pace of reform 
would see Australia fall back into the trailing group of also-rans. 
Continued effort is required to lift Australia towards international 
best practice.


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Contact: 
   John Houghton
   Principal Economist
   Bureau of Industry Economics
   Canberra
   AUSTRALIA
   Ph    +61 6 276 1858
   Email jhoughton () dit gov au


Copies of the report from:
   Ph    +61 6 276 2347
   Email biepubs () dit gov au
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