The Future of the Australian Communication Industry †Free Samples

Question: Discuss about the Future of the Australian Communication Industry with the Regulation by the ACCC. Answer: Introduction The ACCC is an Australian organization that has been mandated to ensure that there is sufficient competition in the Australian market (Schwartz and Harris, 2017). This organization has been receiving consumer submissions and is publishing them on its website. These submissions are talking about the utility the consumers derive from the services offered by the communication industry. Most of the submission have disclosed that most Australian are not happy with the current state of the services the communication industry offers. Their lack of satisfaction has led them to point forward the various challenges they go through while consuming the services. Some have recommended a shift to an advanced communication system by criticizing the current system from being poor and unreliable. Various suggestions have also been laid forward. However, it cannot be indefinitely concluded that the services are not in line with what the consumers need; in one submission, a consumer confessed that the services are completely in line with consumer need only that they are underdeveloped. The ACCC can be argued to have contributed to the lack of development in this market owing to strict regulations. This paper will discuss the level of completion in this market and how this may be impacted in the future. The market structure of the Australian Communication Industry The number of firms that have access to the National Broadband Network (NBN) are few (Budde.com.au, 2014). This means that this market operates under an oligopoly structure (Smith, 2015). The ACCC has succeeded in promoting increased competition in this market. This has been driven by the increase importance of the services provided over the NBN. For instance, as at June 2016, there were three dominating mobile networks in this industry namely; Telstra, Optus and Vodafone. During this period, there was a proposal by the OECD for an additional mobile networks to make them four so as to boost the competitive nature of this industry. As at date, the mobile networks are four with significant market share; Telstra has 48%, TPG has 26% and it incorporates iiNet, Optus has 14%, and Vocus has 6% and it incorporates M2 (Flannery, 2017). The increased competition has led to a lower price for voice and mobile services; however, the internet prices has gone up. The Arguments Posed on the Submissions Since the change of the original labor plan, the liberals has headed the NBN inappropriately for the following reasons. The costs of experimentation is very high compared to when it was initially sorted by labor. There has been a great federal budget investment on the carbon based FTTN network. This network is becoming outdated in some years to come and thus all this investment will go to a waste. The new FTTP is more advanced than the copper-based. There is an absence of price discrimination in that the users running the advanced better models are paying a similar price to those running downgraded networks. There will be differentials in competition by businesses. This is because small businesses may not be able to invest in the new advanced FTTP networks since they are more expensive. The FTTP networks will be used by the large firms and it will make them more efficient than the small businesses which will continue using the copper-based networks. The ACCC values are conflicted by the increases funding by the NBNCo to Telstra to construct the new network. This in future may make Telstra to have an added advantage over the other three competitors and may end up gaining a higher market share which would mean a reduced market share for the other three mobile networks. This will undermine the competitive nature of this market. The ACCC is accused of causing congestions in the networks by forcing the number of interconnect points to be raised to 121 instead of 14. The congestions are caused to those connected to fibre-based NBN. In this submission, the consumer noted that carbon-based networks are aging and therefore reusing them will only be taking the Australian economy backwards. It was proposed that in the next 5 to 10 years, all the carbon-based networks should have been replaced by the FTTP. The poor speed and reliability of the carbon-based networks is creating a dire need for a digital migration. The increased usage of fibre broadband solution by the majority of consumers is expected to raise the speed and reliability due to fast connectivity; this will make companies to become more competitive and more innovative since they will be enabled to connect fast to their customers. The consumers are also claiming that they believe they are paying extremely higher prices for the services compared to the quality of services received (Thecie.com.au, 2015). In terms of the rank in average global internet speed, the Australian economy dropped from 60th in 2013 to 30th in 2015; this is a huge decline. A digital migration is expected to raise the efficiency of connectivity and also the equity. It is unfair for people paying equally to get different bit speed. Businesses in the rural areas are not able to compete efficiently with those in the urban areas due to connectivity differences. Conclusion The decision by the NBN to digital migrate is resulting in many issues as presented by consumers and businesses in the submissions and thus the decision need a review. The low speed of connectivity is making businesses to be uncompetitive and less innovative. This industry is very uncompetitive on offering its services. The ACCC body should implement serious reforms that would not only raised the internet speed, but also the speed of connectivity to customers. Based on the issues presented in the submissions, it is with enough evidence wise to support the idea of digital migration in Australia; it would boost businesses and consumers experience. Digital migration will reduce barriers to entry. All the issues presented in the customer and business submissions should be the basis for the ACCC in formulating the reforms on Australian digital migration. Bibliography Accc.gov.au (2017). Communications sector market study. [Online] Australian Competition and Consumer Commission. Available at: https://www.accc.gov.au/about-us/market-studies/communications-sector-market-study [Accessed 14 Oct. 2017]. Budde.com.au. (2014). 2014 Australia - Telecoms Market Analysis - Top Trends Moving into 2015 -. 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Available at: https://www.afr.com/brand/chanticleer/the-death-of-the-oligopoly-australias-incumbents-face-new-rivals-20150421-1mq11b [Accessed 14 Oct. 2017]. Schwartz , M. and Harris, H. (2017). Ethics in the Global South. 18th ed. [S.l.]: Emerald Group Publishing. Thecie.com.au. (2015). Australias telecommunications market structure. [Online] Available at: https://www.thecie.com.au/wp-content/uploads/2015/06/CIE-Report_VHA_Consumer-outcomes-in-communications-markets-FINAL.pdf [Accessed 14 Oct. 2017].