Address by The Hon Tim Fischer MP, Deputy Prime Minister, Leader of the National Party, Minister for Trade, at the "Crossing Cultural Frontiers: The Communications Industries in the Asia Pacific Region" Conference, Canberra, 28 April 1997

Introduction

I welcome this opportunity to address a very distinguished group of experts on communications from Australia and around the region as well as members of the diplomatic corps.

I would like to thank Don Aitken, Vice-Chancellor, University of Canberra, for inviting me to speak today, particularly as it gives me an opportunity to share a platform with my good friend, Her Excellency, Madame Laxanachantorn Laohaphan, Royal Thai Ambassador to Australia.

I congratulate the University of Canberra and its Thai sister university, Thammasat , on putting together such a valuable international forum. I welcome this conference's objective of looking at the impact of developments in communications on the region's cultures including its impact on ways of doing business.

The close cooperation which has developed between the University of Canberra and Thammasat is particularly welcome. Thai-Australian relations are very important to me as I have spent some time in Thailand and have a great respect for the country and its people.

Today I would like to talk to you firstly about some of these changes and the impact they are having on nations throughout the region. Secondly, I would like to set out for you Australia's approach to current international communications trade policy issues. Finally, it is appropriate that I also inform you of the tremendous changes in this area which will be taking place here in Australia later this year.

Communications and the Dynamic Asia-Pacific Region

Good people-to-people links make for good country-to-country relationships.

The technological developments of the last two decades have, in fact, made extensive people-to-people links all the more possible. Electronic communication is much easier, much more enjoyable and much more affordable than anyone could ever have imagined at the beginning of the 1980s.

The arrival of user-friendly personal computers and the internet has brought individuals and businesses much closer together. The growth in satellite broadcasting of what's known around the world as "cable" TV has made many cultures accessible to each other.

Similarly, the extension of telecommunications networks and the application of sophisticated technologies has meant more widespread access to telephone services, e-mail, facsimile services and so on, with consequent economies of scale to reduce costs.

Previously there was often less than one telephone to a hundred people in many countries in the region, but that is changing. Thailand, for example, now enjoys, on average, more than seven phones per hundred people, with over thirty per hundred in Bangkok.

More and more people can now maintain links simply by picking up the phone.

And the pace of change is unlikely to slacken.

Growth of the Internet and Electronic Commerce

The Internet statistics speak for themselves. In 1995 there were around 38 million Internet users worldwide. Today it is estimated that number has reached 70 million. By the year 2000 it is expected to be around 250 million.

In Australia, the Internet industry sector is growing at a phenomenal rate: it is doubling every three months. Nearly two million Australians will have used the internet this month.

The continuing communications revolution will again have a profound impact on the way in which business is carried out in the region. Electronic commerce will reduce significantly the costs of doing business overseas.

The 1980s saw small-to-medium sized businesses become more and more involved in exporting their products. It has been suggested that a major factor contributing to this development was the arrival of inexpensive, reliable fax machines.

Undoubtedly, electronic commerce via the Internet will have a similar impact, making it even easier for SMEs to get in touch with potential customers and to close deals. Already companies of all sizes are beginning to exchange key business documents electronically.

A down-side of business increasingly being done at the push of a button might be reduced business travel around the region. It would certainly be a shame if a PC handshake entirely superseded personal contact.

My own guess, however, is that increased electronic business contacts will lead ultimately to increased face-to-face contact between peoples of the Asia-Pacific.

More Technology Means More Competition

As well as facilitating ease of access to more markets, the changes in the communications field are, of course, also bringing greater competition. Electronic commerce means not only can Australian businesses sell to a greater range of customers but also that their Australian clients will be able to choose from a greater number of international suppliers.

We believe, however, that competition is good. We are practising what we preach by opening up our own telecoms sector. I will come back to that.

The rate of competition in this sector is accelerating at the same cracking pace as its technological development.

Multinational conglomerates are being formed which will be better able to offer truly global services. The $10 billion Cable and Wireless Communications was recently formed from a merger between the USA's Mercury and Nynex together with Bell Canada International. A week later British Telecom merged with American giant MCI to form an $82 billion company.

Competition is increasing from smaller operators as well which are smart enough to take advantage of the sharp end of technological innovation and capitalise on gaps in the market.

Australian Internet service provider, Oz Email, recently became the first company in the world to allow people to make international telephone calls via the Internet without the need for a personal computer. Users call a central point at Oz Email and are then connected to their destination, all at about a quarter the normal charge.

The Cultural Impact of Telecommunications

Contemporary communications provide increased access to other peoples' thinking, be it by phone, by cable TV or by internet.

Improved communications systems means greater knowledge of each other's societies and cultures. Some have expressed concerns that this may result in the decline of traditional cultures.

We should not allow, however, this to overshadow the powerful positive effects of greater cultural exchange.

I believe that the increased interaction of peoples in the region will result in a richer, more complex society around the Asia-Pacific rim. Certainly it will be a more pluralistic society which will draw its influences from a wider array of sources.

Australia's Trade Policy on Communications

Everything I have said today is premised on Governments facilitating trade in communications equipment and services.

The pace of trade liberalisation in the Asia-Pacific has been picking up in recent years, particularly thanks to developments in APEC and the WTO.

A highlight of last December's successful Singapore Ministerial Conference of the WTO was the announcement by twenty eight WTO members that they would conclude an Information Technology Agreement, or ITA. Australia, together with a number of APEC economies, worked hard in the lead up to the meeting to achieve this outcome.

Negotiations on the ITA have now been completed. The ITA, with its commitment to zero tariffs on IT products, will have a major impact on industry well into the twenty-first century.

Similarly, the conclusion on 15 February of a WTO Agreement on telecommunications will liberalise from 1 January 1998 the basic telecoms market for over 90 percent of the world's trade.

APEC played an important role in helping accelerate WTO liberalisation in these key sectors.

In addition, at the APEC Telecommunications Ministerial Meeting, held in Australia last year, Ministers adopted a program of collective actions aimed at achieving trade and investment liberalisation and facilitating business in the sector.

It is important, if we are to see the realisation of all the potential benefits identified earlier, that Governments continue to deregulate and liberalise the communications sector.

Australia's Telecommunications Environment

The Government has shown its commitment to this at home.

Australians are in love with mobile phones.

The cellular phone market has grown by more than 950% from 425,000 customers when competition began in mid-1992 to around 4 million at the end of 1996.

We believe that competition has been the key to the great success of the mobile phone sector where three vigorous players have been operating. The rest of this sector will, we believe, benefit equally from enhanced competition.

What will the Australian telecoms market look like after 1 July 1997?

There will be:

• no restrictions on the number of carriers;
• no restrictions on services provided;
• increased industry self-regulation.

Of course, carriers will still have to meet their obligations to the community and so the universal service obligation arrangements will continue.

We believe all Australians will benefit from improved and less expensive services once these changes are put in place.

For rural and regional Australia particularly, I have made a commitment that I reiterate here - rural and regional Australians will not be disadvantaged, and it is my goal that the same range and standard of services should be available to them, at prices that are consistent with other areas of Australia.

The Trade Practices Act will also be amended to bring regulation of competition in the telecoms sector more in line with general trade practices law. This should ensure that players with significant market power cannot act anti-competitively.

The Government's decision to part-privatise Telstra is based on the belief that it will make the company more vital in this new competitive telecoms environment.

The experience of a number of similar overseas bodies, notably British Telecom and Telecom New Zealand, is that privatised entities perform more efficiently and deliver benefits to their customers through competitive pricing and enhanced customer service.

The Government's vision for telecommunications is one in which everybody is a winner. Above all, users will benefit from lower prices, improved customer service, innovative products and services and technological developments.

The impact of these reforms will, of course, have flow-on benefits to the rest of the economy as this sector is so vital to an efficient economy.

Telecoms reform is part of the Government's revitalisation of the Australian economy which is already attracting overseas investment.

Conclusion

To conclude, I will simply say that the communications sector is one which is crucial to any modern forward-looking country.

It now influences how we perceive the world and how we are perceived by it.

Any government which attempts to limit the growth of this sector by regulation or otherwise does so at its peril.

The sector has moved very quickly over the last two decades to bring us to the point where telecommunications and the Internet are realising the concept of a "global village".

There is no sign that the pace of change will slacken from here. If anything it looks set to increase.

Governments and people will need to be prepared for the changes that technology may bring. In my view, they will be positive ones.