ATUG commissioned the research to coincide with this week's fifth anniversary of competition on the telecommunications playing field, and the findings were heralded at a Sydney business lunch today to celebrate the industry's deregulation.
The research involved 30 of the top 100 companies listed on the Australian Stock Exchange (ASX). -We chose the top 100 companies on the ASX reckoning that their combined spend of about AU$5 billion ought to give them significant leverage in securing the benefits of competition," said ATUG managing director, Rosemary Sinclair.
According to the research, 30 percent of the corporate sample use Telstra for telecoms services exclusively, even though most of these have previously used other carriers. Fifty percent of the corporates involved in the study use two carriers only, but in the majority of those cases Telstra is the main supplier -- receiving about 80 percent of the total annual telecommunications budget.
The fact that Telstra's continuing dominance in this sector relates largely to the reach of its network and its economies of scale and scope is -hardly surprising", Sinclair said, adding that over a third of participants are now less likely to switch carriers than they were two years ago.
ATUG's research also found that there is a perception amongst the top 100 ASX-listed companies that mobiles is an area where competition hasn't worked for them.
-The non-Telstra networks don't have adequate rural and regional coverage and there's insufficient differentiation as far as they're concerned in price," according to Sinclair.
Positive comments about Telstra, she said, centred on improved marketing, reduced prices, greater flexibility and responsiveness, diversified service offerings, and efforts to improve services generally. Positive comments on new entrants, she added, was that they were far easier to deal with, provided services at lower costs, reduced risk through diversity, and have superior qualities based on this diversification.
-Overall the sample of ASX top 100 companies that we spoke to believe that competition has been beneficial but they have four areas of concern," Sinclair said.
- Telstra's continuing dominance, which is linked to its network reach and coverage particularly in regional areas.
- They have an expectation that prices should fall further, especially since their spend has doubled on average over the last seven years.
- Mobile and data services are two areas where they see little or no benefit from competition.
- Their view is that broadband has been slow to develop given cost and supply constraints.
According to Sinclair, the corporate view of competition is not how many suppliers there are but how effective they are.
Going forward, Sinclair said the view at ATUG was that the next five years of competition need to be built on four factors. Firstly, the continued commitment by government to national policies that are focussed on supporting growth and productivity for Australian business and connectedness for the Australian community.
Secondly, regulation that really reflects the reality of Australia's geography and population size and spread. "We're really questioning whether one size fits all," Sinclair said.
Thirdly, Sinclair said, we like the use of information-centred tools, accounting separation, non-discriminatory price, and the like.
Finally, ATUG has started to do some work on public/private investment strategies in areas of market value such as regional Australia. -We propose a regional telecommunications infrastructure trust fund to build information and communication highways," Sinclair said.
-Communications is really the pervasive utility of the 21st Century. It must be available, affordable, and of excellent quality. It's really the growth engine of the economy and is critical for the community, and we see competition as absolutely key in achieving those goals. Users need strong competition to deliver a choice of world-class services at world-class prices. Communications competition policy needs continued focus and sometimes funding from government. The communications competition also needs vigilance and proactive support from regulators," Sinclair said.
-A lot has been done, but a lot remains to be achieved."
