Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697633997718.pdf (Australia)
Submission to the Select Committee on Regional Development and Decentralisation TELSTRA CORPORATION LIMITED Inquiry into Regional Development and Decentralisation Submission to the Select Committee on Regional Development and Decentralisation 15 September 2017 TELSTRA CORPORATION LIMITED (ABN 33 051 775 556) | PAGE 1 Inquiry into regional development and decentralisationSubmission 82 Submission to the Select Committee on Regional Development and Decentralisation CONTENTS EXECUTIVE SUMMARY 01 1.1.

1.2.
1.2.

02 2.1.

Telstra is deeply integrated into regional communities Telstra’s presence in regional Australia Telstra has delivered over decades for regional customers Telecommunications infrastructure supports economic growth Telecommunications networks contribute strongly to productivity and population growth 2.2.

Demand for mobile devices, data and technology is continually increasing 03 networks Regulation and policy should encourage investment in regional 3.1.
Mobile network investment will improve digital inclusion 3.2.

3.3.

3.4.
Telstra has invested consistently in our mobile network, primarily driven by competition Telstra has been a leading exponent of the Mobile Black Spot Program Telstra will continue to deliver on its Universal Service Obligation 3 4 4 4 4 4 6 8 8 9 11 11 TELSTRA CORPORATION LIMITED (ABN 33 051 775 556) | PAGE 2 Inquiry into regional development and decentralisationSubmission 82 Submission to the Select Committee on Regional Development and Decentralisation EXECUTIVE SUMMARY Telstra owns and operates Australia’s biggest mobile network and is heavily invested in regional and rural Australia.
This includes Telstra’s infrastructure investment as well as its deep and diversified economic and social investment.

As at January 2017, Telstra owns, operates and maintains approximately 3,655 mobile facilities (including towers and masts), in Outer Regional, Remote and Very Remote Australia.

Telstra maintains 2,839 exchanges for the provision of fixed telephony and ADSL broadband services and has 181 retail stores and employed 3,348 staff and 6,011 contractors in regional areas.
Telecommunications networks contribute strongly to productivity and population growth Mobile networks are transforming economic growth, accounting for billions of dollars worth of incremental economic activity each year.

Mobile infrastructure is said to be as important as transport or energy networks to the economy.
Telecommunications networks contribute strongly to productivity improvements and sustainable population growth in our regional areas, in particular by supporting the expansion of small businesses.

Australians are world leaders in the adoption of mobile devices.

Device penetration has increased over 50 per cent between 2013 and 2017 in Australia.

Internet data usage is increasing in parallel, requiring constant reinvestment in mobile networks.
Consumers are rapidly adopting new generations of mobile technology, which in turn requires greater network transmission capabilities, driving continual mobile network upgrades.

In the near future the number of mobile devices is set to expand exponentially with the proliferation of the Internet of Things.

Regulation and policy should encourage investment in regional networks The Australian Digital Inclusion Index measures digital inclusion across several metrics including access to digital services.
Access is improving overall, but regional areas are lagging behind.

As mobile network infrastructure contributes significantly to improvements in access, it is important that carriers continue to invest in mobile infrastructure in regional, rural and remote areas.

Mobile network investment is all the more important in regional areas because people in regional areas are much more likely to be mobile only.
They are more likely to run their business from home, are more dependent on the internet for shopping, banking, education and entertainment, spend more time outdoors, travel longer distances, and are more likely to make emergency service calls from a mobile.

Telstra has invested consistently in our mobile network, driven primarily by competition and our willingness to deliver the best possible customer service experience.
Our 4G mobile network now reaches 99 per cent of the Australian population, and our 3G mobile network reaches 99.4 per cent of the Australian population, helping more than any other mobile operator to break down the digital divide between town and country.

The ACCC’s recent draft decision not to regulate mobile roaming will preserve the incentives to continue investing in regional, rural and remote mobile network infrastructure if it is confirmed.
Telstra is a strong supporter of the Mobile Black Spot Program, which is providing mobile coverage to many regional and remote areas of Australia for the first time.

So far we have committed almost $229 million over 3 years to help expand mobile coverage to 577 locations.
Telstra is joining with the Federal TELSTRA CORPORATION LIMITED (ABN 33 051 775 556) | PAGE 3 Inquiry into regional development and decentralisationSubmission 82 Submission to the Select Committee on Regional Development and Decentralisation and State Governments as well as numerous local councils to invest more than $486 million in regional Australia.
Telstra has a Universal Service Obligation (USO) to ensure standard telephone services are reasonably accessible to all people in Australia on an equitable basis, wherever they work or live.

This is crucial for regional, rural and remote customers for whom there are fewer alternative communications services available.

Telstra takes these obligations very seriously and will continue to work hard to deliver them to a high standard.

01 Telstra is deeply integrated into regional communities 1.1.
Telstra’s presence in regional Australia Telstra has been a constant presence in regional communities since telephone services were first installed.

As at January 2017, Telstra owns, operates and maintains approximately 3,655 mobile facilities (including towers and masts), in Outer Regional, Remote and Very Remote Australia.
Telstra maintains 2,839 exchanges for the provision of fixed telephony and ADSL broadband services and has 181 retail stores and employed 3,348 staff and 6,011 contractors in regional areas.

1.2.

Telstra has delivered over decades for regional customers Telstra is more than just a prominent provider of telecommunications infrastructure and services in regional areas.
We have been a global leader in the development of industry standards and technical innovation geared specifically to the needs of regional and rural customers, particularly for mobile.

We have led investment in and adoption of new mobile technologies in regional Australia over the past three decades, originally starting with analogue and progressing to the latest 4G technologies.

We have consistently worked on technologies to help regional and rural customers make the most of existing coverage.
For example, we have:  helped create better international standards on spectrum use;  pioneered technical solutions to improve mobile coverage including the Telstra Mobile Smart Antenna product (areas allowing regional and rural users who had poor coverage indoors to capture the better quality signal from outside to extend it to into their home, and  developed the Blue Tick standard to show customers which devices offer the possible coverage in regional and rural locations; and  been at the forefront of the development of Narrow Band Internet of Things technology for mobile networks, with huge potential for driving efficiency in regional and rural enterprise.
In addition to these innovations, we have brought services into remote areas in partnership with local communities.

For example the delivery of new fibre to Birdsville, Burketown and Aurukun and mobile services to remote Northern Territory communities.

02 Telecommunications infrastructure supports economic growth 2.1.
Telecommunications networks contribute strongly to productivity and population growth Mobile networks and technology are an increasingly vital contributor to and enabler of Australia’s economic growth and development, encouraging digital participation.
Mobile networks play an integral TELSTRA CORPORATION LIMITED (ABN 33 051 775 556) | PAGE 4 Inquiry into regional development and decentralisationSubmission 82 Submission to the Select Committee on Regional Development and Decentralisation role in providing access to internet services in Australia, helping support economic activity by facilitating efficient communications.
Mobile communications infrastructure is regarded as being as important as the transportation network or energy grid to a country’s economy.1 A study conducted for the Australian Communications and Media Authority (ACMA) estimates that mobile broadband services accounted for an increase of $33.8 billion in economic activity between 2007 and 2013.

This equates to 0.28 per cent per year of economic growth over the period of the study.
The study also demonstrated that mobile technology increased the amount of goods and services purchased by Australian consumers by an amount of $652 per person.2 GDP (real, $bn) Economic impacts of mobile broadband 1500 1450 1400 1350 1300 1250 1200 } $33.8 Billion total Mobile productivity: $7.3B Business time savings: $26.5B 2006 2007 2008 2009 2010 2011 2012 2013 Baseline GDP GDP without broadband Figure 1: Economic impacts of mobile broadband3 The predominant reason for the increasing importance of mobile broadband to the Australian economy is the positive impact the technology is having on consumer and business productivity.
Businesses have leveraged mobile broadband technology in order to improve the quality of the goods and services they offer to their customers and the level and quality of support they provide.

Of the $33.8 billion increase in economy activity for the year 2013, $26.5 billion came in the form of productivity gains and time savings captured by businesses.4 Mobile networks play a significant role in maximising productivity gains within the economy more generally.
Productivity is improved via mobile devices either through labour productivity (employee efficiency improvement due to time savings) or capital productivity (capital efficiency improvement).

1 GSMA, The Mobile Economy 2013, March 2013, p.86.

2 Centre for International Economics report for the ACMA, The economic impacts of mobile broadband on the Australian economy, from 2006 to 2013, April 2014, pp.54, 56.
3 Centre for International Economics report for the ACMA, The economic impacts of mobile broadband on the Australian economy, from 2006 to 2013, April 2014, p4.

4 Centre for International Economics report for the ACMA, The economic impacts of mobile broadband on the Australian economy, from 2006 to 2013, April 2014, p4.
TELSTRA CORPORATION LIMITED (ABN 33 051 775 556) | PAGE 5 Inquiry into regional development and decentralisationSubmission 82 Submission to the Select Committee on Regional Development and Decentralisation Users of mobile technology can spend their time more efficiently by leveraging the capacity of mobile networks while they are on the move.5 Telecommunications infrastructure is also critical for sustainable population growth, especially in regional areas.
Regional population growth is supported because there is a greater incentive and practical ability for businesses to be located in areas outside urban zones due to the availability and affordability of network services.

Access to jobs is likely to be improved as business confidence in regional areas increases with the availability of strong network infrastructure.
According to research conducted by PwC, internet and mobile technologies help businesses to a clearer understanding of their customers and better insights into their competitors.

They reduce the cost of innovation and business administration and increase their overall revenue.

A large number of businesses in Australia have not leveraged this technology to its full potential in order to improve the efficiency of their operations and maximise their potential earnings, particularly in regional Australia.
PwC estimates $49.2 billion of untapped economic potential due to underutilisation of internet and mobile technology, 53 per cent of which could potentially be realised by regional and rural Australian small businesses.6 2.2.

Demand for mobile devices, data and technology is continually increasing Australians are world leaders in mobile device ownership per capita with the number of devices continuing to rise rapidly.
Interactive Advertising Bureau Australia data shows that smartphone ownership increased from 11.1 million smartphones in 2013 to 15.3 million in mid-2015 and 17.2 million in 2017.

Tablet device ownership is also steadily rising from 6.3 million to 11.2 million in the same period.7 Mobile networks are not only providing internet access to smartphones and tablets.

Telstra is also preparing for an exponentially increasing number of devices that will come with the growth of the Internet of Things (IoT).
These devices will require new mobile network technologies to sustain them.

One projection estimates that Australian households will have 30.7 internet connected devices at home by 2021, up from 13.7 in 2017.8 Mobile broadband subscriptions are gradually increasing as users seek quality networks for their devices.
The International Telecommunications Union’s annual report ‘ICT Facts and Figures 2017’ found that mobile broadband subscriptions are expected to reach 4.3 billion globally by the end of 2017 on the back of 20 per cent annual growth in the last five years.9 Data usage is growing in parallel with the increasing number of subscriptions.
Cisco projects that by 2021 global mobile data traffic will reach 49 exabytes per month and smartphones will account for 86 per 5 Deloitte Access Economics, Mobile Nation: Driving workforce participation and productivity, 2016.

6 PwC, Small Business Digital Growth: The potential for internet and mobile technologies to transform small business, August 2015, p.5.

7 Interactive Advertising Bureau Australia, 3rd Mobile Ratings Report – September Data, November 2015, pg.
7; Interactive Advertising Bureau Australia, Device Onwership and Trends, May 2017.

8 Telsyte, IOT@Home market set to soar with more than 300 million devices in Australian homes by 2021, May 2017.

9 International Telecommunication Union, ICT Facts and Figures 2017, July 2017, p. 4.
TELSTRA CORPORATION LIMITED (ABN 33 051 775 556) | PAGE 6 Inquiry into regional development and decentralisationSubmission 82 Submission to the Select Committee on Regional Development and Decentralisation cent of total mobile data traffic.10 In Australia, data download volumes increased by 52 per cent in the year 2015-2016 alone, according to the ACCC.11 Figure 2: Ovum Mobile Network Traffic Forecast12 Speed is of critical importance to Australian and global consumers of mobile data.
Telstra is continually upgrading the speed of its networks to meet this demand, as demonstrated by the widespread adoption of 4G technology.

In 2014 just over a quarter of respondents to Deloitte’s Mobile Consumer Survey had 4G devices.

This surged to 41 per cent in 2015 and 77 per cent in the latest report from 201613.

Telstra is investing to ensure 4G is available in regional, rural and remote areas as well as in urban areas.
As of August 2017, Telstra’s 4G coverage reached 99 per cent of the Australian population.

1.4 million square kilometres of landmass are covered with more than 7000 4G sites nationally.

10 Cisco, Virtual Networking Index: Global Mobile Data Traffic Forecast Update, 2016-2021 White Paper, March 2017.

11ACCC, Competition in the Australian telecommunications sector: Price changes for telecommunications services in Australia, February 2017, pg.

6.
6.

12 Ovum, Network Traffic Forecast: 2015 – 2020, December 2015.

13 Deloitte, Mobile consumer survey 2016: the Australian cut, 2016, pg.

20.

TELSTRA CORPORATION LIMITED (ABN 33 051 775 556) | PAGE 7 Inquiry into regional development and decentralisationSubmission 82 Submission to the Select Committee on Regional Development and Decentralisation 03 Regulation and policy should encourage investment in regional networks 3.1.
Mobile network investment will improve digital inclusion The Australian Digital Inclusion Index (ADII) measures the digital inclusion of Australians across three dimensions: Access, Affordability and Digital Ability.14 Although the national ADII score continues to rise, there is mixed progress when comparing different geographic and socioeconomic areas – highlighting that there are key issues to be addressed by improving mobile network coverage and accessibility, particularly for rural and regional populations.
Figure 3: Digital inclusion scores for Access, Affordability and Digital Ability for the period 2014-2017 Geography plays a critical role in the level of digital inclusion.

There is still a clear ‘capital-country gap’ in terms of digital inclusion, but this gap has become smaller in the last few years.

Country areas had a digital inclusion score of 50.7, which was 7.9 points behind the score of capital cities at 58.6.

The gap was 8.5 points in 2015 and 8.3 points in 2016.
The overall improvement in Australia’s national digital inclusion score has been predominantly driven by improvements to Access, which measures how the internet is accessed, where it is accessed and how much data is consumed by what devices.

Between 2014 and 2017 the national Access score has increased by 7.4 points, from 62.2 to 69.9.

This indicates that Australians have improved access to the 14 Roy Morgan Research, Measuring Australia’s Digital Divide: The Australian Digital Inclusion Index, 2017.
TELSTRA CORPORATION LIMITED (ABN 33 051 775 556) | PAGE 8 Inquiry into regional development and decentralisationSubmission 82 Submission to the Select Committee on Regional Development and Decentralisation internet, are using a broader range of devices and are consuming more data than ever before.
Mobile network infrastructure contributes considerably to this continuous improvement.15 Figure 4: ADII sub-index scores for 2014-2017 Australians who rely on a mobile-only connection make up more than one in five of the population.

Mobile-only usage is linked with socio-economic factors such as education levels and income.

The ADII score of mobile-only users was 14.2 points behind the national average of 56.5, highlighting that there are clear Access and Affordability issues.
We can help to address these issues by continuing to upgrade mobile networks, particularly in regional Australia.
A recent ACMA study concluded that 50 per cent more users were mobile only in regional areas (15 per cent) compared with urban areas (10 per cent).16 The Regional Telecommunications Independent Review Committee (RTIRC) in 2015 found that regional customers are increasingly choosing mobile services as their primary means of communication and that users in regional areas are more likely to: run their business from home and be more reliant on long distance communication   have a higher level of dependence for using online methods to access shopping, banking,  education and entertainment services spend more time outdoors and travel longer distance, increasing their reliance on mobile communications  be exposed to different risks with regards to natural disasters, creating a greater need for more reliable emergency service connections via mobile networks.17 3.2.
Telstra has invested consistently in our mobile network, primarily driven by competition Telstra has invested more than $8 billion in the six financial years to FY16 to upgrade our mobile network.

With this continued investment the 4G network now covers 99 percent of the population.

This 15 Roy Morgan Research, Measuring Australia’s Digital Divide: The Australian Digital Inclusion Index, 2017, pg.

10.
10.

16 ACMA, Australians get mobile: http://www.acma.gov.au/theACMA/engage-blogs/engage-blogs/Research- snapshots/Australians-get-mobile, June 2015.

17 Australian Government, Regional Telecommunications Review 2015, October 2015, p.13.
TELSTRA CORPORATION LIMITED (ABN 33 051 775 556) | PAGE 9 Inquiry into regional development and decentralisationSubmission 82 Submission to the Select Committee on Regional Development and Decentralisation investment is helping to address the digital divide with more people than ever having access to a highspeed mobile network in regional, rural and remote areas of Australia.
Figure 5: Number of Telstra mobile sites over time Telstra has invested in one of the world’s largest Internet of Things (IoT) enabled networks, which supports Cat M1 technology.

Software that supports the Narrowband Internet of Things (NB IoT) standard is now being tested, with the aim being to provide similar coverage and benefits as Cat M1, but optimised for simpler devices that transmit smaller amounts of data.
Industries in rural Australia, such as agriculture and transportation, will benefit most from the extended coverage that will be provided by the Cat M1 and NB IoT technologies.18 The ACCC’s recent draft decision not to declare a domestic mobile roaming service is the right decision for regional, rural and remote Australia.19 Regulated roaming would mean that regional communities could miss out on significant and necessary upgrades to mobile networks because it would disincentivise further network investment in regional areas.
Current regulation is encouraging competition and thus investment in greater regional mobile coverage and improved services.

Telstra’s goal is to improve on its long history of helping support regional customers.
We have not only been the leading provider of telecommunications infrastructure and services in regional areas for decades, we have also been a global industry leader in developing technology standards and driving technology innovation with a focus on the improvement, availability and quality of mobile network services for regional and rural customers.
Telstra has led adoption of mobile technologies starting with analogue through to 4G, led the alignment strategies for the 850 MHz and 700Mhz frequencies which increased adoption of 3G and 4G 18 https://exchange.telstra.com.au/delivering-even-more-for-regional-and-rural-australia/ 19 ACCC, Domestic Mobile Roaming Declaration Inquiry, Draft decision on domestic mobile roaming declaration, May 2017.
TELSTRA CORPORATION LIMITED (ABN 33 051 775 556) | PAGE 10 Inquiry into regional development and decentralisationSubmission 82 Submission to the Select Committee on Regional Development and Decentralisation technologies, developed and advocated for new international standards which has led to improved mobile coverage and been an industry leader in developing NB IoT technology for mobile networks which will help underpin economic growth and improved efficiency for rural customers and businesses seeking to make the most of emerging technologies.
3.3.

Telstra has been a leading exponent of the Mobile Black Spot Program Telstra has been a strong supporter of the Mobile Black Spot Program, which is providing parts of regional and remote Australia with mobile voice and data services for the first time.

The improved coverage will help key regional industrial sectors such as agriculture, mining and tourism leverage the technology to improve their operations and service offerings.
The Federal Government intends to “stimulate competition in mobile services in regional and remote Australia” with the program.20 Telstra will invest up to $229 million over three years to help expand mobile coverage to 577 locations across the nation.

So far, more than 150 locations have received mobile network services under the program, covering up to 40,000 sq km.
Telstra is joining with the Federal and State Governments as well as numerous local councils to invest more than $486 million in regional Australia.

3.4.

Telstra will continue to deliver on its Universal Service Obligation Telstra has a Universal Service Obligation to ensure standard telephone services and payphones are reasonably accessible to all people in Australia on an equitable basis, wherever they work or live.
Telstra has regulated and contractual obligations to deliver these services, which are crucial to regional, rural and remote customers, for whom there are fewer alternative communications services available.
Telstra takes these obligations very seriously and will continue to work hard to deliver them to a high standard until and unless the Government’s USO policy changes.21 20 Minister for the Department of Communications and the Arts, Mobile Black Spot Programme to deliver almost 500 new or upgraded base stations with total investment of $385 million, 25 June 2015.
21 The Productivity Commission recently recommended ending the current arrangements and transferring the obligation to the National Broadband Network.

TELSTRA CORPORATION LIMITED (ABN 33 051 775 556) | PAGE 11 Inquiry into regional development and decentralisationSubmission 82