Research Report on Telecommunication Industry in Australia

Research Report on Telecommunication Industry in Australia

Research Report on Telecommunication Industry in Australia

Introduction

Context

Telecommunication services involve availability of the basic telecommunication infrastructure such as television, telephone, radio or computer in order to communicate. Telecommunication systems have become so advanced that most of the businesses in current age can’t be considered without existence of the communication infrastructure in the business environments. Telecommunication systems in a nation determine the potential growth not only in the field of communication but also in the entire business field. Due to increasing importance of telecommunication in present age businesses it is considered to be as the backbone of corporate world (Bodger & Lattey, 2013). The present research context would deal with the progress of Australian telecommunication system so as to know factors which are impacting growth of telecommunication system in Australia.

Research report on telecommunication industry in Australia

Background

Telecommunication system in Australia has very long history where in telecommunication systems were established in Australia since 1850 with the advent of telegraph system for the communication purpose. After advent of telegraph, telephone systems started in year 1882 which revolutionalized the telecommunication system in Australia. Further adding to the history of telecommunication advent of Marconi’s radio communication system in year 1905 marked the milestone in radios broadcasting industry in Australia. In year 1945, rollout of copper wire to connect telephones helped in making usage of telephones on larger scale. Year 1966 was the era of satellite communication when Australia linked itself with international telecommunication network with the launch of INTELSAT II (Bryman & Bell, 2007). Year 1990 was the time for the internet revolution in Australia when information network in Australia was linked to the satellite system to access internet. By the start of 20th century internet expanded with fast pace and most of the Australians were having access to the internet services. By year 2005 Australian internet users witnessed the social mediaand faster communication medium for multiple forms of digital data such as video, audio and pictures. Social media websites and data sharing websites such as Facebook, Twitter and You Tube were popular in Australia through which communication system touched new heights.

Telecommunication system in Australia has done remarkable growth since its inception which has helped country to remain ahead into several business domains such as healthcare, education and tourism. But comparing the telecommunication system prevailing in Australia with other developing and developed countries it can be realized that still communication system in Australia has not reached to the mark where it should have been in order to develop a comprehensive communication system which can be considered as the backbone for various business domains and help enabling business domain to develop competitive advantage (Gorinson and Neil, 2003). There are several factors which are responsible for the underdeveloped telecommunication system in Australia such as the government control on the telecommunication system & infrastructure in Australia, lower focus towards the rural areas in Australia for connectivity, late mover limitations of the Australian telecommunication industry and stringent communication policies framed by government restricting growth of communication system in Australia. All these factors in harmony were responsible for underdevelopment of Australian telecommunication system which not only impacted the communication between general users in the country but also impacted the highly important fields through communication such as defense, academic research and healthcare.

Purpose

The aim of present research paper is to explore the telecommunication industry prevailing in Australia with special focus towards reasons which does not lead to proper development of telecommunication system in Australia. Present research would explore major reasons which are responsible and impact which these factors had on the overall progress for telecommunication system in Australia. Further present research paper would also forward key recommendations in lieu of underdeveloped telecommunication system in Australia so that communication system can be improved so as to gain fast growth and communication system can be established as the backbone for industrial revolution.   

Research objectives

Key objectives for the present research can be given as under:

  • To explore factors which lead to underdevelopment in Australian telecommunication industry
  • To recommend way out which can help Australian telecommunication system to restructure entire industry in order to become backbone to business domain

Methodology

The present section of research would define the research method which would be adopted in order to carry out the research including methodology adopted for the research, data collection technique along with importance of each method of data collection, instrument used for each data collection methodology with importance of each instrument used and data analysis techniques which would help in order to analyze results & findings of the research.

Research methodology

Research methodology for the present research would be positivist in nature where in with the help of exploratory research method factors responsible for the underdevelopment of telecommunication system in Australia would be explored so that ways can be recommended to enhance growth into telecommunication system in Australia. Entire research would be qualitative in nature where in as a qualitative aspect impediments of telecommunication system in Australia would be analyzed (McKnight, 2002). Exploratory research design has been used in the present context in order to explore the particular field of interest which is not clearly defined and with the help of exploratory research method relationship can be established between various factors which are of prime importance to the present research context. The major advantage of exploratory research offer is to discover new phenomenon with the lesser restrictions into the field of interest. The major reason for application of exploratory design in the present context is to develop better understanding of the phenomenon of telecommunication system in Australia, to make flexibility among sources required for the data collection and exploring proper resources for the information collection in order to research the primary field of interest.

Research rationale & problem statement

Rationale for conducting the present research is to explore factors which are responsible for telecommunication system progress in Australia which is not sufficient to aid the business activities and general telecommunication infrastructure to prevail into developed countries. With the help of present research problems prevailing into telecommunication field would be identified which would be analyzed in detail so as to propose probable solutions in order to sort out issue of development for the telecommunication system in Australia (Flannery, 1985). Problem statement for the present research work can be framed as finding out barriers to the development of telecommunication system which hampers growth of telecommunication and lead to underdevelopment in telecommunication. Further problem statement for the present research is to develop ways and means which can enhance development in telecommunication system in Australian telecommunication industry.

Data collection

Data collection process used for the current research topic would be multifold i.e. both primary as well as secondary data collection sources would be used in order to collect the data for fulfillment of objectives for the present research. Both primary and secondary research methods have been adopted in the present research for data collection as primary data collection method would enable collection of fresh, latest and data of exact relevance for the objectives outlined in the research while secondary data collection process would explore the developments pertaining to the historical researches for the present research context. Primary data collection would be useful to collect data through fresh sources and major objective of the primary data collection process would be to know barriers which are hampering growth of telecommunication system in Australia from the perspective of common users of telecommunication system or industry experts for the telecommunication industry. Secondary data collection process would examine the past research into telecommunication system and reasons for low progress in this industry (Zhang et al, 2009). The major objective of the secondary research would be to examine factors from historical as well as present age aspect so that process of development in telecommunication can be understood along with recommendations which would be helpful in order to make development in telecommunication system in Australian context.

Instrument used

Instruments which would be used for the present research context would be based on the primary and secondary data research methods. In order to collect primary data for the present research context questionnaire method would be used. Questionnaire would be prepared in order to collect data pertaining to the factors/impediments into the telecommunication system in Australia. Questionnaire prepared for the data collection purpose would contain different sections which would be based on the objectives for the present research. Questionnaire would include both objective as well as subjective questionnaire in order to extract complete detail from the respondents in order to know the impediments of telecommunication system in Australia. For collection of secondary data pertaining to current research articles, journals and existing research would be referred in order to understand existing development on the current research topic and based on the data available present research’s objectives would be fulfilled.

Sampling technique

Sampling technique for the research provides the process for selection of data collection sources which include both primary as well as secondary data collection sources. In order to collect the primary data which would be done through questionnaire method, probabilistic sampling technique would be used as it provides the equal probability for selection of respondents and hence there are very less chances of biasness in data collected with the help of probabilistic sampling. There are numerous techniques for sampling process in probabilistic sampling and for the present research context random sampling method would be adopted which would select the respondents based on the ease of availability for the respondents. Random sampling method locates the respondents based on their ease of availability so that data collection and sample identification process does not become difficult (Damsgaard and Lyytinen, 2001). Further random sampling method is adopted in order to make data collection process free from any kind of biasness. Profile for the respondents selected in order to gather the primary data would be industry experts into telecommunication field, common telecommunication users and government officials involved into policy making for telecommunication industry etc. Total sample size for data collection would include 100 people where in respondents from different profile such as common telecommunication users, industry experts and government experts would be included in the same proportion. Selection of secondary data sources would be made on random basis where in major criteria for selection of secondary data collection source would be relevance of particular source with the objectives of current research context.

Data analysis

Data analysis for the present research which involves collection of both primary as well as secondary data would be done with the help of content analysis method where in the data would be analyzed in order to observe the critical relationship among the data so that research objectives can be attained through the data collection process. As the present research is qualitative in nature hence data collected through multiple sources would involve collection of qualitative data which contains information pertaining to factors responsible for deterring growth of telecommunication system in Australian context. With the help of content analysis method data would be observed so that research objectives & research questions designed in order to fulfill present research context can be successfully achieved. Content analysis method is most suitable technique for the qualitative data research as it extracts critical data required for the research.  

Target audience         

Target audience for the research would include multiple sources such as the scholars working into telecommunication industry in Australia, industry expert for the Australian telecommunication field and policy makers in telecommunication domain in Australia. For the practioners in telecommunication academic field the present research work would act as the guiding source in order to refer as the secondary data source in order to carry out further research pertaining to Australian telecommunication system. For the industry expert present research paper would act as the informational report which can be analyzed in order to understand the limitations of present telecommunication system prevailing in Australia. Also for the industry experts present report would bring out key recommendations in order to improve the telecommunication infrastructure prevailing in Australia. For policy makers in Australia present research work can be used as the supporting document while framing the telecommunication industry policies so that policy development into telecommunication field can be done keeping in mind the high growth pace for the telecommunication systems in Australian context.

Ethical considerations

There are several ethical considerations which need to be kept in mind while conducting the primary data research as it would involve data collection from respondents and their privacy of information is very important aspect. In order to consider the ethical concern it is important not to reveal contact information collected from respondents especially for marketing purpose. Further data collected from respondents would be kept secret and they would be given complete autonomy to take back their responses during any stage of the research without any condition. Further identity of any respondent would not be revealed and the data collected in the present research would be strictly used for the academic purpose only and there would not be any commercial usage of the present data collected through respondents.

Results and findings

The present section of research would collect the data through both primary and secondary data sources in order to make significant contribution to attain research objectives. Present section would only collect facts & figures into presentable form so that meaningful discussion can be done on the collected data.

Secondary data collection

As planned in the research methodology section that secondary data collection process would collect data with the help of articles, journals, news and existing literature on the present research topic. Literature review would act as the prime source of information for collection of secondary data research. The major barriers to the telecommunication system establishment in Australian context can be given as under:

New technology

Telecommunication field is very sensitive to new technology and new technologies in the field of telecommunication can revolutionalized the entire telecommunication. In recent past years telecommunication field has witnessed several new technologies which were adopted by countries across the world with heavy investments in these technologies (King et al, 2004). Due to entire regulation of telecommunication system in Government hands in Australia hence technology adopted was little later due to which Australia was always having late mover limitations. Starting from the time of managing telegraph system for communication to present age internet and satellite communication Australian telecommunication industry has taken a back seat mainly due to the government regulations and being a field of low focus for the government. Further in comparison to the other bigger developed countries Australia was always having the disadvantage of smaller size due to which Australia was not able to attain economies of scale which other countries developed with ease. Due to failure in achieving economies of scale by Australia there was price differential in Australia in telecommunication industry which impacted the cost structure into telecommunication system as compared with the other countries of world. Lack of economies of scale especially due to lower traffic increased cost per unit for the communication purpose in Australia which makes it unsuitable to use some of the most successful technologies worldwide in context of Australia as well.   

Input factor

Prices in telecommunication industry were regulated by the prices of input such as the labor, equipment, material and services. For an efficient industry having the competition among the market players there would be cost efficiencies established in the market which would make the lower requirement of input material for the same amount of output services. In context of Australian telecommunication industry the entire market was operated by three of four major players due to which there was no perfect competition prevailing in the market and overall cost structure for the telecommunication system was much higher as compared with the other developed countries (Choudhrie et al, 2003). Further usage of outdated technology into the telecommunication field lead to inefficient operations due to which overall cost structure was much higher for the users into Australian telecommunication industry. Also from the benchmarking studies it has been found out that equipment cost for the countries such as Australia and New Zealand was much higher as compared with the countries such as Finland, Sweden, Canada and America. Figure 1 below provides the price index for the several countries pertaining to the access price, local call price and internet access prices paid by the users into different countries.  

Comparative cost index for access price, local call price and internet price for different countries

Figure 1: Comparative cost index for access price, local call price and internet price for different countries

From the above figure it is clearly evident that access prices for countries such as USA, Sweden and New Zealand is much lower as compared to the countries like Australia, France and UK. The major reason for lower access prices for these countries is lower equipment cost which is not the case with Australia. Even the local call prices for Australia is much higher in comparison to the top four nations appearing in the above spectrum which makes is costly for the users operating into telecommunication industry in the country. Further with usage of the technology internet access prices for Australia are at par with some of the top countries in the field of telecommunication such as USA and Finland.

Government regulations

Government regulations prevailing in the Australian telecommunication industry can be considered as the major reason for downfall of telecommunication system in Australia due to the fact the regulatory environment in Australia was not suitable for the growth of telecommunication where in government posses several restrictions on growth of telecommunication system. The international telecommunication regulations framed by Australian government were not up to the mark and inspired by the regional or national regulation act which were considered as out of date regulation while dealing at international front for the telecommunication system establishment. Further a major reason for the high regulation into the telecommunication sector was the utmost political control on the telecommunication system infrastructure which impacted the growth of telecommunication in Australia.

Regulations into the telecommunication field restricted the entry of more domestic and foreign players into the market due to which monopolistic situations existed in the telecommunication industry in Australia. These monopolistic situations in Australia hamper growth and neither market efficiencies due to which neither technological innovation nor cost efficiencies were evolved into the telecommunication industry. Though in the later years the main player in telecom industry which was Telstra got privatized and government felt need for the deregulation of industry due to which market entry for the domestic private players were allowed in the Australian telecommunication industry (Denzin, 1989). This not only helped in developing perfect competition situation but also enforced cost efficiencies due to the better competitive markets into Australian telecommunication field.   

Geography and economies of scale

Cost in the telecom sector gets impacted by the geography and accordingly economies of scale are being achieved with the help of geographical advantage being achieved in the overall operations of the telecom sector. Geographical advantage can be attained in terms of the volume and density for traffic using the telecommunication services in the particular telecommunication sector. Australia is having very low population which is scattered into different geographical regions due to which economies of scale can’t be achieved based on the geographical positioning of the entire population in Australia. Unit cost for the data transmission services and mobile operations varies with the distribution of population and density hence according to the population geography in Australia there are inefficient operations into the telecommunication sector. Further another reason for cost inefficiencies is the rural segment for users of telecommunication which is still not being captured by any telecommunication player. Hence due to unavailability of the frequent telecommunication services in the rural areas it is cost efficient to establish communication with other countries in comparison to the major cities to the rural areas in Australia.   

Indirect taxation

Amount of indirect tax levied to telecommunication sector would decide the total revenue generated by the telecom field for government. Indirect taxation being charged to telecommunication sector in Australia ranges from 4 percent to 6 percent while the average indirect tax charged by telecommunication field in other comparative countries ranges into 18 percent to 30 percent. Further in Australia, for other industries amount of indirect tax charges ranges into 12 percent to 15 percent while telecommunication is the only field where in indirect tax charged by the government is on very lower side (Han et al, 2006). This reduces the government focus from the telecom field as the revenue generated from telecom field are not significant as compared with the other industry sectors where in significant revenues are being achieved by government making higher contribution to the overall GDP of the country (Shanks et al, 1993).

The lower amount of indirect taxes charged in Australian telecommunication sector is basically in order to reduce the underlying cost for the users of telecommunication infrastructure in Australia. There is high price gap between the Australia and other countries in terms of the telecommunication prices due to which foreign market players are not willing to deal in Australian telecom industry (MacInnes, 2005). These lower amounts of indirect taxes prevailing in Australia make very critical regulation into the telecommunication field where in only the domestic players would be able to deal efficiently into the telecommunication sector while entry of foreign market players would be restricted due to differential pricing.  

Barriers in market player collaboration

Australian markets are considered to create barriers in collaboration for the market players into telecommunication sector and there are several factors which posses barriers to collaboration such as benefit distribution, lack of trust, technological complexity and cultural barriers (Verikoukis et al, 2006). Considering the barriers prevailing into the domestic markets into telecommunication field in Australia lack of trust and technological complexities can be considered as the most vital barriers where in market players does not have trust on each other so as to develop a collaborative venture for the telecommunication operations. While complex technology into the telecommunication industry makes it difficult for the market players to jointly operate the organization as it becomes very difficult to jointly handle such intense technology (Van, 2004). Further in terms of the international collaborations into the telecommunication industry cultural barriers and benefit distribution can be considered as the major barriers to the collaboration where in working culture in Australia is little different from the other countries due to which foreign market players consider it difficult for them to jointly operate the telecommunication operations in Australia.

Primary data collection

In order to collect primary data for the purpose of present research questionnaire has been designed which includes all the objectives for the present research work. Data has been collected in the present research with the help of questionnaire being filled by the industry experts, users into telecommunication field and government officials dealing into the policy making process for the telecommunication sector. Questionnaire has been designed in three sections where in the first sections collates demographical details of the respondents while second section of the questionnaire collect information pertaining to barriers in telecommunication industry in Australia and third section explore recommendations in order to sort out issues pertaining to telecommunication industry in Australia.

Data collection process through questionnaire has been done with 100 sample units in order to collect the data where in below table provides the demographical details of the respondents as per their age, gender and profession which would be helpful in analyzing the results which have been obtained through the respondents selected in the present research context.

Section- A Introduction

Q.1 Please select your demographic details from below:

Age                 18 years to 25 years               26 years to 40 years               More than 40 years

Gender            Male                                        Female

Category        User                                         Industry expert                        Policy makers

Profession

Age

Gender

Users

18 years to 25 years (12)

M (8) F (4)

 

26 years to 40 years (40)

M (32) (8)

 

More than 40 years (18)

M (14) F (4)

Industry experts

18 years to 25 years (0)

NA

 

26 years to 40 years (12)

M (10) F (2)

 

More than 40 years (8)

M (6) F (2)

Policy makers

18 years to 25 years (0)

NA

 

26 years to 40 years (7)

M (5) F (2)

 

More than 40 years (3)

M (2) F (1)

Table 1: Showing the demographic data for the respondents

Q.2 what all telecommunication devices you use and total vintage for using telecommunication devices?

a. Mobile                                 b. Radio                                               c. Telephone

d. Telegraph                            e. Internet

f. Others, please specify……………………………………………………………………………………..

Total vintage…………………

Further in response to the question regarding usage of telecommunication devices by the users below responses have been received:

Telecommunication device

% of people

Mobile

93%

Telephone

48%

Telegraph

4%

Internet

86%

Radio

76%

Other

5%

Vintage

 

0-2 years

7%

3 to 5 years

35%

More than 5 years

58%

 Table 2: Showing the respondent usage for telecommunication devices and vintage

Q3. Do you satisfied with overall development of telecommunication system in Australia?

  1. Highly satisfied
  2. Satisfied
  3. Somewhat satisfied
  4. Dissatisfied
  5. Highly dissatisfied

Further in response to the overall satisfaction for the users into telecommunication industry considering that industry experts and policy makers are also users of the telecommunication system in Australian telecommunication sector below findings can be presented:

Satisfaction index

Percentage of people

Highly satisfy

23%

Satisfy

13%

Somewhat satisfy

10%

Dissatisfy

48%

Highly dissatisfy

16%

Table 3: Showing the satisfaction index for the users into telecommunication industry in Australia

Section- B Challenges to communication system in Australia

Q1. Please rank the below mentioned barriers to telecommunication system development in Australia and mention any other barrier if found suitable.

  1. Political control
  2. Government regulations
  3. Lack of economies of scale
  4. Lack of technology
  5. Any other, please specify

In response to the first question in section B which assesses the challenges pertaining to telecommunication system in Australia ranking given by the users can be given as below:

Barrier to telecommunication sector

Rank 1

Rank 2

Rank 3

Rank 4

Political control

10%

24%

35%

38%

Government regulations

54%

36%

45%

42%

Lack of economies of scale

2%

10%

8%

2%

Lack of technology

34%

30%

12%

18%

Table 4: Showing the rankings for the barriers in telecommunication industry

Q.2 Do you agree government regulations into telecommunication industry in Australia are outdated and do not have applicability in present context.

a. Highly agree

b. Agree

c. Somewhat agree

d. Disagree

e. Highly disagree

In response to the question regarding government regulations as the major reason for the lower growth of telecommunication industry in Australia below responses were received:

Agree/Disagree index

Percentage of people

Highly agree

43%

Agree

23%

Somewhat agree

10%

Disagree

18%

Highly disagree

6%

Table 5: Showing the responses of respondents for regulation as barrier to telecommunication

Q3. Do you agree technology prevailing in Australian telecommunication industry is not par with the other developed countries?

a. Highly agree

b. Agree

c. Somewhat agree

d. Disagree

e. Highly disagree

In response to the question pertaining to the review of presently prevailing technology into Australian telecommunication sector below responses were received from the respondents:

Agree/Disagree index

Percentage of people

Highly agree

33%

Agree

12%

Somewhat agree

28%

Disagree

17%

Highly disagree

10%

Table 5: Showing the user agree/disagree index for technology used in telecommunication industry

Q4. What additional barriers you consider are impacting the growth of telecommunication system in Australian context?

In response to the question pertaining to the additional barriers which respondents felt, hampers the growth of telecommunication system in Australia include lower investments made by Australian government and other market players pertaining to Australian telecommunication sector, lack of technological innovation and unsupportive investment policies in Australia for the foreign market players. All these barriers to telecommunication system growth in Australia were rated by the respondents as the major factors.

Section- C Recommendations for communication system in Australia

Q1. Do you agree that opening up telecommunication market for the foreign players and domestic players at early stage would have enhanced market competitiveness?

a. Highly agree

b. Agree

c. Somewhat agree

d. Disagree

e. Highly disagree

In response to the question regarding opening up of the telecommunication markets for foreign & domestic market players at early stage of development in the Australian telecommunication sector below responses were received from the respondents.

Agree/Disagree index

Percentage of people

Highly agree

45%

Agree

25%

Somewhat agree

12%

Disagree

10%

Highly disagree

8%

Table 6: Respondent agree/disagree index in response to opening up of telecommunication markets

Q2. What can be possible way out in order to sort out regulations prevailing in Australian telecommunication sector?

In response to the question regarding possible way out in order to deal with the barriers pertaining to telecommunication system in Australia it was found out that most of the respondents advocated for suitable government policies & regulations which are as per the present age. Further additional way out to enhance effectiveness into telecommunication sector include bringing technological innovation into telecommunication, developing higher focus area as the backbone of industrial revolution, developing economies of scale and devising financial policies which can give attractive composition to the foreign players in order to invest in Australian telecommunication sector. All these measures can prove helpful in order to deal with the barriers which were analyzed in the present research paper hampering the growth of telecommunication sector.

Q3. How economies of scale can be achieved in the telecommunication industry in Australia?

In response to the question regarding development of economies of scale in Australian telecommunication sector it was responded by the respondents that economies of scale in Australia can be enhanced by suitable usage of technology which would reduce cost per unit. Also market players dealing in Australia should develop themselves on international front so that they can cater to larger population and by becoming the global telecommunication players these market players would be able to establish economies of scale and lower operational cost per unit would be borne by the telecommunication players prevailing in Australia. Further higher level of connectivity needs to be provided into the rural areas of Australia which would enhance the overall traffic on the telecommunication network leading to higher economies of scale for the market players dealing in Australia telecommunication segment. One more way out which was proposed by respondents was developing stiffer competition into telecommunication industry which would enforce economies of scale into telecommunication markets.

Discussion

Discussion on secondary data

Based on the data collection in the present context through secondary as well as primary data sources in order to explore challenges to the communication system in Australia and way out in order to deal with the communication system issues critical findings have been obtained which would be used in order to fulfill objectives for the present research. Secondary data was collected in order to explore the possible barriers which are hampering growth of telecommunication industry in Australia (Kijl et al, 2005).

From the secondary data research some of the key factors working as the barriers to telecommunication sector were identified as new technology, government regulations, geography & economies of scale, market player collaboration, indirect taxation and input factors. All these factors with joint impact on the telecommunication sector were identified as the major concern. Lack of new technological innovation was identified as the major cause of concern in the telecommunication segment as in comparison to the other developed & developing countries Australian telecommunication sector is not having latest of technology which can developed advanced communication system with lower per unit cost for the users (Bouwman et al, 2007). Technology prevailing in Australian telecommunication segment is outdated due to the prime reason that there are no in house technological innovations happening in Australia. Further another reason which can be identified for lack of technology can be due to lower government focus in telecommunication sector in order to attach rural population with the telecommunication system in order to develop uniform connectivity.

Government regulations into the Australian telecommunication sector are the most vital challenge to entire industry. At initial stage entire telecommunication system was handled by government bodies due to which there was lack of technological innovation, competition into telecommunication market and economies of scale (Bina and Giaglis, 2001). Further government regulations were such that it does not allow private players and foreign market players to prevail into telecommunication sector and created barrier to evolve perfect competition in the industry. Further the subsidized prices in the telecommunication industry imposed by government regulations make telecommunication industry as the most unattractive for the domestic and global marketplayers. In addition to this government regulations pertaining to the control of entire telecommunication sector into political hands make it very difficult to make faster decisions on the growth for the telecommunication system as due to political intervention it was very difficult to bring changes in the telecommunication segment (Grzybowski, 2005).     

Geography and economies of scale are considered to be as the vital parameters creating challenge to telecommunication system growth in Australian context. Geographical distribution of the population in Australia is such that there is very low volume over the telecommunication system network due to which the fixed cost required to establish the infrastructure does not get the sufficient traffic in order to reduce the per unit cost (Brookes et al, 2005). This is the major reason liable for non achievement of economies of scale in Australian context. Further due to lower focus of the Australian government to provide telecommunication system network in the rural segment has excluded the entire rural segment from telecommunication network due to which it is really difficult to develop a uniform communication network. Further due to non availability of the rural population on telecommunication system the overall traffic using telecommunication network at any point of time would be very low (Tallberg et al, 2007). These factors are critical as any market player dealing in the Australian telecommunication segment would not be able to achieve significant economies of scale and operations for the telecom player would become inefficient. Due to these inefficient operations into telecommunication sector most of the telecom players are not interest to impart their services into major areas in Australia leading to big challenge for telecommunication system development in Australia.

Collaboration between the market players becomes a major hurdle in the development of the telecommunication system in Australia as domestic as well as international market players faced several issues due to which collaboration among the players is not possible (Pitkänen, 2006). Among domestic market player major issues faced includes lack of trust, benefit distribution and complex technology issues. The major implication of these issues faced by the market player is small size organizations dealing into the telecommunication segment where in oligopoly market situation prevails with only few players leading entire market. With the development of collaboration into the telecommunication segment in Australia it would be possible for bigger international players to enter into Australian markets. The major benefit of entry of foreign market player would be the development of effective technology in Australian telecommunication industry which would help in order to gain cost efficiencies with the efficient operations (Ubacht, 2004). Further entry of higher number of market players into telecommunication sector would establish perfect competition situation where in with the several market players dealing into the Australian telecommunication segment efficient operations would be present.

Indirect taxation factor makes it difficult for the external players in order to operate into the telecommunication sector which can be dealt with enhancing the indirect taxation charged to the market players dealing into Australian telecommunication sector. This would enhance the government revenue from the telecommunication sector and this revenue generated from the telecom sector can be employed into the rural areas for establishing proper infrastructure for telecommunication systems (Killström et al, 2006). Though there would be several implications of the measure adopted for the indirect taxation but traffic can be enhanced and telecommunication system can be established into rural areas with enhanced tax brackets for the indirect tax.

Input factors are essential in order to reduce per unit cost for the telecommunication system and Australian input cost is much higher in comparison to the other developed countries due to which cost per unit is also on higher side of the spectrum (Gelenbe, 2003). In order to deal with the issue of higher input cost latest technology needs to be imported which would reduce the operational cost giving better cost per unit for the telecommunication field.     

Discussion on primary data

Primary data has been collected in the present research context with the help of questionnaire developed in order to assess barriers to telecommunication system in Australian telecommunication industry along with proposed way out in order to deal with the challenges faced in the telecommunication sector. Questionnaire was designed keeping in mind the objectives of present research and 100 sample units were selected in order to collect primary data for the present context. The data collected through primary data research was listed in the result and finding section and present section would analyze the collected data in order to fulfill research objectives.

First section of the questionnaire was introductory where in respondents demographic details, telecommunication medium used and overall satisfaction was tested in order to get an overview of the present research framework. From the first question pertaining to demographic details of the respondents taking part in the research it was observed that 70% of the respondents are general users in the telecommunication industry in Australia, mostly in the age bracket of 26 years to 40 years. While 20% of the respondents were industry experts and 10% of the respondents were government officials involved in policy making process in telecommunication field. Such higher percentage of users have been selected for the data collection purpose was mainly to conduct survey from users point of view and unavailability of higher number of industry experts and government policy makers which limits the scope of present research.

The demographic details collected in the present research clearly highlights that the present research has been conducted mainly from the user point of view while industry experts and policy makers have been included in the present research so as to gain recommendations in order to deal with the way out for challenges faced in the telecommunication industry. Further the present demographic analysis shows that major portion of the respondent contains male candidates which were just by random selection and no particular selection was made for the selection.

In response to the question pertaining to the usage of telecommunication tool by the respondents it was make out that 93% of the respondents are making use of mobile, 86% of the respondents are making use of internet, 76% makes use of radio, 48% of the respondents use telephone while only 4% of the users make use of the telegraph for the communication purpose. This shows that mobile is most widely used communication tool followed by internet and radio/TV.

Showing the frequency of telecommunication tools used

Figure 1: Showing the frequency of telecommunication tools used

From the above figure it is clearly evident that the mobile has highest degree of penetration among the users in current age followed by internet. Radio and television which used to be the most widely used telecommunication sources have taken a backseat now a day which shows increasing importance for internet & mobile technology which is replacing the usage of radio & TV. In response to the vintage of respondents into telecommunication industry in Australia it was found out that 7% of the users are having vintage of 0 to 2 years while 35% of the users are having 3 to 5 years of vintage while major part of the respondents i.e. 58% are having the vintage of more than 5 years. This data represents that major portion of respondents are using the telecommunication devices from long time. This proves that though telecommunication system is not well established in Australian telecommunication field but it is prevailing since long time.

In response to the question pertaining to degree of satisfaction which respondents are having from the telecommunication services it was found out that 36% of the respondents are satisfied with the telecommunication services provided by the telecom providers in Australian telecommunication market.

Showing the agree or disagree index for the telecommunication services

Figure 2: Showing the agree/disagree index for the telecommunication services

Also as evident from the figure 2 that 64% of the people are not very satisfied from the kind of services obtained into the telecommunication industry in Australian context. This clearly indicates that the telecommunication services in Australian context are not up to the mark due to which users into the telecommunication industry are not happy with the kind of services availed by them. There are high numbers of people who are not satisfied with the services obtained in the telecommunication field which may be due to the network congestion, outdated technology or may be due the lower quality of technological infrastructure.

Figure 3 below provides the ranking of major barriers to telecommunication system growth in context of Australian telecommunication industry. From the below figure it can be revealed that government regulation has been identified as the major barrier to telecommunication system development at rank 1 by 54% of respondents followed by lack of technology which has been chosen by 34% of the respondents. Political control and lack of economies of scale have been identified as the major barrier to telecommunication system development in Australia by 10% and 2% of the respondents only. This clearly shows that government regulation is the most vital factor working as the challenge to telecommunication industry in Australia.

Shows the ranking for major barriers to telecommunication system

Figure 3: Shows the ranking for major barriers to telecommunication system

In the similar manner ranks have been given for the 2nd, 3rd and 4th factor responsible in order to create barrier into telecommunication growth in Australian telecommunication industry. Hence from the overall analysis it can be concluded that government regulation is the most vital factor, lack of technology as the second most important factor followed by political control and diseconomies of scale into the telecommunication industry.

In response to the question regarding government regulations into Australian telecommunication industry it was found out that 66% of the respondents agree with the fact that regulations into telecommunication industry in Australia are responsible for slow growth into telecommunication field. While only 34% of the respondents support the Australian government regulations as the enabling element for the telecommunication growth in the country. In response to the question pertaining to the presently prevailing technology not at par with the developed nation’s telecommunication technology it was found out that 45% of the respondent agree with the fact that technology prevailing in Australia is not at par while only 27% of the respondents are not agree with the present fact. Figure 4 demonstrate the results for the present question regarding usage of technology into telecommunication industry in Australia.

Showing agree or disagree index for the usage of technology in par with developed nations

Figure 4: Showing agree/disagree index for the usage of technology in par with developed nations

In response to the additional barriers confronted by the respondents in Australian telecommunication industry major barriers include lack of innovation, unsupportive investment policies and lower focus of government on telecommunication field. These entire factors collaborate in order to develop diseconomies of scale and for the outdated telecommunication infrastructure which is considered as inefficient in its operations and for increasing per unit cost as well.

In response to the question pertaining to opening up of markets as the major way out in order to enhance market competitiveness it was made out that 70% of the respondents agree with the fact that opening up of markets for foreign & domestic players at early stage would help in order to develop higher level of competition and hence economies of scale in the telecommunication sector in Australia. In order to resolve government regulation issue from the telecommunication sector in Australia it was found out that benchmarking needs to be done in accordance with the developed nation model so that policies developed in Australia are suitable for investment and there are no government restrictions on the entry of any market players into the telecommunication sector.

In relation to achieving economies of scale in Australian telecommunication segment it was responded by the respondents that economies of scale can be achieved by using the latest technological equipments and enhancing telecommunication network into rural areas as well which would enhance traffic volume on the telecommunication network. Further input cost needs to be controlled according to the requirement into the telecommunication industry which would make the economies of scale in telecommunication industry.  

Conclusion

The present research paper which was aimed at exploring the telecommunication system barriers prevailing into the Australian telecommunication sector has found out that government regulations, diseconomies of scale, higher input cost, indirect taxation and political control are among the major issues which are confronted into Australian telecommunication sector. Further in order to sort out the issue of economies of scale it was advised that latest equipments into telecommunication industry can help in order to reduce cost per unit and implement economies of scale. Further to deal with government regulations it is important that telecommunication sector must be opened for investment by domestic as well as foreign players so that better market competition can prevail into the telecommunication industry in Australia. Further Australian government should benchmark their regulations with the other developed countries so as to make proper changes which would help in developing suitable policies for the development of telecommunication system in Australia.

Recommendations

Some of the major recommendations for the telecommunication industry in Australia so as to improve telecommunication system can be given as mentioned below:

  • Australian government should pay higher attention towards development of telecommunication infrastructure considering it as the backbone for business development
  • Telecommunication infrastructure should be imported with the help of advanced countries into telecommunication field and timely review & updates for the technology would ensure fast pace development into the telecommunication sector.
  • Government should pay attention towards telecommunication development and should encourage the entry of foreign & domestic market players into telecommunication by providing cost efficient input material so that there cost per unit can be reduced to significant level making telecommunication field as vital importance for the foreign as well as domestic players
  • There should be minimal political intervention into the telecommunication industry in Australia so that faster decision making can be done and telecommunication growth can’t be hampered due to political benefits
  • Rural population inclusion should be made major agenda for the government in order to provide the telecommunication infrastructure so that in all part of Australia easily available telecommunication systems can be developed

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