E & OE
Good morning, it's great to be here and thank you Grahame (Lynch, CommsDay Publisher) and Petroc (Wilton, Group Editorial Director, Decisive Publishing) for inviting me to speak.
'Unwired Revolution' is a fitting name for today's conference, because I believe that the imminent arrival of 5G mobile technology will be a truly revolutionary event in the telecommunications industry. In fact, the arrival of 5G may well be an inflection point not just for the telecoms sector, but for the entire Australian economy.
So today I'd like to speak on three key points.
First, why 5G will provide this inflection point, and why it provides a great opportunity for Australia; second, what the Government is doing to ensure that the promise of 5G can become reality; and finally, I'll outline what's coming next as both Government and industry prepares for the arrival of 5G.
So let me begin by describing why I see 5G as such a revolutionary change. Particularly when mobile communications already plays such an important role in Australian society. 2017 marks 30 years since the first AMPS (Advanced Mobile Phone System) mobile phone call was made in Australia in February 1987. 2017 also marks the 25th anniversary of Australia's spectrum management framework, introduced in 1992. That was around the same time that the first 2G GSM networks went live in Australia. I had some personal experience with the mobile phones of that era. In 1990 I was working as an adviser to a state government Minister and I had the sought-after job of carrying the Minister's mobile phone. Which came complete with a shoulder-strap and a battery about the size of a briefcase. We've come a long way since then.
In 2006 we saw the launch of 3G services. And in late 2011 the first 4G networks become operational in Australia. But while we have seen some incredible technological progress from AMPS to 2G, 3G and 4G, these three decades-worth of changes could be described as more evolutionary than revolutionary.
5G appears poised to be that revolutionary change, as a combination of extremely low-latency and high-bandwidth applications takes the burgeoning 'internet of things' to a new level. And for Australia, this represents an unprecedented opportunity. There is no country better positioned to harness the opportunities of 5G. Australia has an effective and competitive mobile market which delivers voice and data coverage to 99.3 per cent of the population. And this is despite our huge landmass and extremely low population density. This has been achieved with comparatively little government intervention—particularly in contrast to Australia's fixed-line telecommunications market.
TPG's recent announcement that it plans on becoming Australia's fourth mobile carrier shows that Australia will continue to benefit from a fiercely competitive mobile market. According to the latest Akamai speed index report, Australia has the highest average mobile connection speed in the Asia Pacific region at 15.7 Mbps . Even countries with far smaller territory to cover and higher population densities cannot match Australia's mobile performance. Japan comes in at second place with an average of 15.6 Mbps. New Zealand is not far behind, averaging 13.0 Mbps.
The ACMA reports that there are currently 32 million mobile voice and data services operating in Australia (phones and data dongles). Meanwhile, ABS data reveals that in the three months to December 2016, 146,050 Terabytes of data was downloaded over mobile networks.
Despite the fact that this is still a very small proportion compared to fixed-line downloads, it still represents significant growth. More than 20 per cent from the previous quarter, and a 61 per cent increase from the previous year.. And not only are Australians benefitting from competition delivering wide coverage and fast speeds, but also affordable prices.
Earlier this month, I announced findings from the Bureau of Communications and Arts Research that found while data downloads are growing, real consumer prices for mobile services are falling. It also found that Australia is competitive at an international level when it comes to affordability. These indicators all point to Australia having a very strong investment environment for mobile networks, delivering positive outcomes for consumers.
But with 5G, a significant change is coming that will impact government, consumers, the telecoms industry, and the broader economy. It will allow for new services that will benefit all Australians, in fields such as health, education, automotive and agriculture. The technology also holds enormous scope for emergency services systems, which could benefit from greater mobile capabilities when it comes to responding to natural disasters.
5G will also foster greater uptake of Internet of Things applications thanks to lower latencies and greater bandwidths, and help us build the smart homes and cities of the future, which will in turn lead to the emergence of new businesses, services and jobs. With the number of connected 'things' expected to reach 20.8 billion worldwide by 2020, this could provide the spark for new hi-tech manufacturing businesses in Australia.
A report by McKinsey estimates that by 2025, the Internet of Things will pump up to $2.3 trillion into the global economy each year in manufacturing alone. Realising the full range of social and economic benefits of 5G for Australia will only be possible through the sector taking a leading role. The standardisation process for 5G is well underway through the International Telecommunication Union, with final standards due by 2020.
In the past, Australia and the Asia-Pacific region have been influential in contributing to standards and spectrum plans that have been adopted across the board. This has meant that we've not only been able to adopt new technologies quickly, but also that we've been able to take advantage of the economies of scale that come from every major manufacturer producing equipment suited to the Australian market. We need a similar long term vision for 5G—and we need the communications sector to provide the practical, technical expertise that will help in Australia's advocacy for an internationally-harmonised approach.
Which brings me to my second point - what the Government is doing to ensure that the promise of 5G can become reality. We are working hard to modernise the policy and legislative framework which will support the early uptake of 5G in Australia. The Government should ensure that there are no unnecessary roadblocks for carriers seeking to deploy 5G networks; and to create a policy and regulatory environment that ensures that our competitive mobile market continues to flourish.
One area of Government responsibility which will be key to the success of 5G is spectrum reform. Spectrum is a critical enabler of Australia's current and future communications infrastructure. The Government is committed to reform to ensure that the regulatory framework governing access to spectrum remains fit-for-purpose.
In May I announced a consultation package on reforms to modernise and simplify Australia's spectrum management framework. The package includes an exposure draft of the new Radiocommunications Bill, and a set of consultation papers on the proposed new framework. The reforms will simplify and streamline the processes for spectrum allocation and provide a transparent, efficient and flexible spectrum management framework. The draft legislation removes the existing barriers between licence types, and enables flexible licensing issue and allocation processes. This enables the ACMA to proactively respond to market demands and new technologies, such as 5G, by removing overly cumbersome and bureaucratic processes and allowing the market to work. This is the most significant change to the Australian spectrum management framework in the last 25 years.
And it is this type of long-term reform that will help Australia remain internationally competitive with a modern, innovative economy over the coming decades. The consultation period on the exposure draft has been extended until 28 July. Your feedback is vital in ensuring that the final Bill and reforms are co-designed with industry. To ensure the reforms hit the mark for Australia's future spectrum management, there will be a second exposure draft released for consultation later this year.
But there is more on the Government's agenda than just spectrum reform, substantial as it is. 5G will require a radical change to the way mobile networks are designed and deployed if they are to deliver revolutionary new services. 5G will require additional infrastructure in new forms, including smaller cells and more densely-located antennas, which could be placed on lamp-posts or traffic lights.
With this in mind, I announced in June that the Government would undertake public consultation on telecommunications carrier powers and immunities. Today, carriers have some powers and immunities to enter land to inspect it, and to install and maintain certain types of facilities. This typically refers to 'low-impact facilities', which includes pillars, antennas and cabling. These laws help carriers roll out telecommunications infrastructure quickly, efficiently and in a nationally-uniform way, rather than having to adhere to a range of disparate state, territory and local government requirements. These laws have existed in their current form since 1997. But we need to take into account changes in technology and operating practices to ensure that the laws remain relevant in the rapidly evolving communications sector.
The proposed reforms, 24 in total, are wide-ranging. Amongst other things, they cover new technologies and deployment practices, streamline notification and objection processes, and clarify the implications of council heritage overlays.
Changes to these regulations, if adopted, could benefit the rollout of 5G in years to come. The proposed changes would help mobile carriers roll out new communications technologies faster and at a lower cost, with savings estimated by AMTA to be at least $100 million per annum.
With the rollout of 5G expected to see the deployment of much more mobile network equipment than we have today, it will be important to strike the right balance between the needs of infrastructure providers and local communities. Carrier powers and immunities are powerful tools and carriers nevertheless need to exercise them with due regard to community sensitivities and exercise their rights responsibly.
Submissions to this consultation process are due by 21 July—tomorrow. The Government will make a final decision following careful consideration of all issues raised.
Additionally, along with the Government's work on reforms to the spectrum framework and carrier powers and immunities, the ACMA is already hard at work on making spectrum available for 5G. While I'm sure that acting ACMA Chair Richard Bean will provide much more detail in his speech later this morning, it's worth providing a brief overview of the work already underway.
On 23 June the ACMA released its consultation package for the future use of the 3.6 GHz band in Australia. This consultation paper follows on from the discussion paper Future use of the 1.5 GHz and 3.6 GHz bands released in October 2016, and takes into consideration responses to that paper. The ACMA has decided to progress the 1.5 GHz and 3.6 GHz bands from the 'initial investigation' to the 'preliminary replanning' stage of its process for considering additional spectrum for mobile broadband services. The ACMA has also decided to prioritise re-farming of the 3.6 GHz band over the 1.5 GHz band, arguing that this approach would be less disruptive to those already using the spectrum, and would follow international trends that have set the 3.6 GHz band as a 'pioneer band' for 5G. Although there was strong interest from industry in using the 3.6 GHz band for wide-area mobile and fixed wireless broadband networks, current users of the spectrum were firmly against the proposal. Satellite earth stations and wireless internet service providers would be affected by the relocation of the spectrum. The ACMA has said that satellite earth station 'protection zones' could potentially be established to allow satellite services to continue using the 3.6 GHz spectrum, and spectrum in the 5.6 GHz band could be
made available for wireless service providers. The ACMA is working as quickly as it can to bring the 3.6 GHz spectrum to auction in 2018.
So, having described the potential for 5G and outlined what the Government is doing, I'd like to briefly look at what's coming next. 5G is already gaining the attention of a range of portfolios across Government. For instance, the COAG Transport and Infrastructure Council has already commenced work on the deployment of automated vehicles, and 5G will play an important role this area. 5G will also play a key role in the deployment of 'smart' infrastructure in our cities and suburbs. Assistant Minister for Cities and Digital Transformation Angus Taylor has announced $50 million in funding for the Smart Cities and Suburbs Program. The program drew inspiration from global examples of connected infrastructure, such as Dublin's citywide network of traffic sensors, and Chicago's 'Array of Things' network of 500 sensors which provide block-by-block data on air quality, noise levels and traffic flow.
But 5G is not just about cities—the technology is also going to be a game-changer for rural and regional Australia. Minister for Regional Communications Fiona Nash is a huge advocate for innovation in smart agriculture. Hi-tech farms use mobile networks to open farm gates, remotely activate water and feeding systems, and control autonomous machinery. The arrival of 5G will provide a further boost for these kinds of applications.
In the Industry, Innovation and Science portfolio, Arthur Sinodinos has described how mobile-enabled sensor networks have attracted international investment. Tasmanian agricultural technology business 'The Yield' attracted a $2.5 million investment from Bosch Group for its real-time sensor network technology, which has seen tech-savvy farmers reduce water costs by 25 per cent and chemical use by as much as 50 per cent. And we all know that there are many more examples like this, where smart Australian businesses are making the most of mobile connectivity.
My Department will work closely with industry, key experts and other Commonwealth departments to best inform government decisions in this important field. I want to ensure that 5G is a success so that all areas of the economy will benefit.
So to conclude, it's been a pleasure to be here today and I want to thank you once again for the invitation. We are on the cusp of a digital revolution and it's vital that government, industry and community stakeholders work together to ensure that we make the most of this opportunity. I look forward to working with you so that we can see the promise of 5G become reality.