A shared national vision for Australia’s digital future

When I first started thinking about this speech – both what I should say and where I should say it – the Press Club in Canberra was the obvious choice. 

Not only because Telstra is the longest standing corporate partner of this proud institution, and a strong supporter of the role it plays in driving conversations of national importance.

But because I had come to realise that the role of the telecommunications sector – which is so critical to the day to day running of the nation, and to its future success – was not well understood. 

Or if it was, it was taken as a given.

There’s often discussion about the technology, data centres and energy we’ll need to power Australia’s digital future. But not as much about the digital infrastructure we’ll need to connect it all. 

Without connectivity, none of it will work.

It’s often assumed this will be there, and it will keep pace as technology evolves and demand increases, but it’s not a given.

It requires massive investment, coordination and planning to deliver, and we’ll need a lot more investment to remain competitive as a country.

I had planned to start the conversation here. But I’m encouraged that we have started a national conversation on productivity. Part of that is about the role that connectivity plays, and the digital infrastructure that supports it.

We are heading in the right direction with this conversation, and I commend the Government on the consultation undertaken so far. We now need to build on that and get really clear about the digital infrastructure Australia will need to achieve its objectives.

What do I mean by that?

30 years ago, we were talking about the internet as the information superhighway.

If I translate that analogy for today, we have two superhighways for data and connectivity. One you can touch and see, and one you can’t.

Spectrum is our highway in the air for delivering reliable and expanded mobile coverage, including via satellite. And fibre is our highway in the ground and undersea for the higher capacity links needed for business and industries. 

These are the two ways the telco sector has to deliver services, and they both have constraints – they have limited lanes, new lanes are expensive to build, and there are roadblocks that can slow things down.

To help lift productivity and deliver higher living standards for the next generation, we’ve got to have the right foundation of digital infrastructure. That means making it easier to build and expand these connectivity superhighways by removing roadblocks and making it more attractive to invest in them. 

As a country, we have a small window of opportunity now to position ourselves for the future as technology evolves. That window is closing fast.

The longer we delay, the more the opportunity starts to pass us by.

Connectivity is a foundational piece we’ve got to get right, and it starts with having a clear destination – a vision of the digital future we want to create for Australia, and a roadmap to get there. 

So I want to start with the role that connectivity plays today, before I come to our opportunity and our challenge, and finally, what will help us get where we want to go. 

The importance of telecommunications 

It’s incredible to think how much a part of our lives connectivity has become in such a small time.

I grew up in the 70s and 80s in Holbrook in regional New South Wales, about 3 hours drive from here. My Dad owned what was known as the ‘Middle Pub’ in town. 

It had a phone that rang a lot, especially in the evening with people checking up on someone or asking if so and so was there.

In a little country town before mobile phones, it was a big deal if the pub phone went down. Not just for keeping in touch, but for Dad to run his business, or to get help in an emergency.

Everyone knew the Telecom technician in town. If the line went down, we’d knock on his door, and he’d come and have a look.

Today, more than 20% of Australia’s population were born after smartphones were introduced. There is a growing expectation to be connected everywhere, all the time.

97% of Australians rely on digital devices like mobile phones, laptops and tablets for things like running their businesses, connecting with family and friends, or accessing essential services. Overall, the telco sector added $47 billion dollars in gross value to the Australian economy in 2023. 

Connectivity has become a critical part of life and business, and it is only becoming more so.  

Data consumption in Australia has grown 16-fold over the last decade, driven by the rise of streaming services, internet applications for communication, and cloud services. Global network traffic is projected to grow around 20 - 30% annually to 2030, and AI has the potential to drive demand even higher.

We’re in a period of rapid technological advancement, digital transformation of industries, and shifting global dynamics that make secure and sovereign national assets even more important.

When Danielle Wood, Chair of the Productivity Commission spoke here a few weeks ago, she called out harnessing data and digital technologies as the thing that will shift the dial on Australia’s productivity over the coming years.

To do that, we must get connectivity right. 

Therein lies our opportunity, and our challenge.  

Our opportunity and challenge

To the opportunity first. 

A list of longer-term priorities came out of the Government’s Economic Reform Roundtable that we now need to work through as a country. 

Connectivity will contribute to many of them, but it is central to three – 

·       making AI a national priority; 

·       building a skilled and adaptable workforce; 

·       and modernising government services.

If I focus on the first one: the potential for AI to almost double Australia’s average productivity growth over the next decade.

Achieving that requires widespread adoption. We need to diffuse it through the economy and create the right environment for it to be applied at scale.

If we do, I see amazing opportunities for Australia to be a leader in deploying AI, because we have many of the right ingredients. Renewable energy resources, a vibrant tech sector, and strong security and geopolitical stability. 

We also have the opportunity to serve Asia Pacific from data centres located in Australia, as Scott Farquhar outlined when he spoke here in August. 

Of course, this requires a foundation of secure and reliable connectivity, which translates to massive demand for digital infrastructure assets – or the superhighways in the air, in the ground and undersea that I spoke about earlier. 

Countries around the world are recognising this. We are seeing a super cycle of investment to support the global race to unlock AI.

I was in the United States earlier this year, and the pace and scale of digital infrastructure rollout was staggering. How much investment is being attracted, how fast approvals are getting through, how big they are thinking. 

I came away thinking, we’ve got to get aligned and we’ve got to move fast if we’re going to remain competitive as a country.

We need to have a shared vision, and we need the right levels of investment.

This brings me to our challenge.

Like many industries, we’ve seen in the past that when returns are higher, investment is higher, and the benefits of that flow through to consumers, businesses and the economy. 

When returns are lower, investment tends to be lower, and we’ve seen returns across the telco sector steadily decline for most of the last decade. 

Let me give you an example of what higher returns look like.

I remember sitting in the audience at a global mobile conference on the other side of the world, well before joining Telstra, hearing about the first rollout of 3G on 850Mhz spectrum in Australia.

It was a big bet and a build time fame that was thought impossible. The scale of infrastructure required was enormous. There was footage of helicopters bringing materials and people to remote sites all over the country.

It was an ambitious project, and it began a couple of decades of mobile leadership for Australia that delivered significant economic benefits – estimated at $14.2 billion dollars in 2007 both directly and indirectly.

If you chart returns through that period, they were good, and it drove investment and innovation that meant Australia was at the leading edge of deploying 3G and then 4G and 5G.

We need this kind of bold ambition now to position Australia for the future.

As we look ahead to the end of the decade, global mobile traffic is expected to grow more than four-fold, driven by growing adoption of 5G and high bandwidth applications. 

With each evolution, the telco industry must continue to invest in more advanced infrastructure. And a country as large as Australia needs more investment than most – up to three times more capital expenditure per capita than our G7 peers over the last four years.

But it’s not just about keeping up with rising demand – it’s also about investing in national resilience, national security, and sovereign capability.

It’s not a given that the industry has the capacity to invest in these things that are so critical to the nation. We need returns to be able to deliver them.

Having the right policy and regulatory settings to encourage investment can make a big difference. I was pleased to see that three of the Government’s longer-term priorities I mentioned earlier relate to this:

·       better regulation;

·       speeding up approvals in national priority areas; and

·       attracting capital and deploying investments.

As telcos, of course, we’ve got to roll out infrastructure efficiently, but there’s also a job to do as a nation around how we attract investment and remove roadblocks to enable our priority areas.

A shared national vision 

Part of that job is having a clear destination in mind – a clear national vision for Australia’s digital future. 

That vision must be bold, and we need to work collaboratively on the roadmap to get us there.

The Government has set an ambitious economic reform agenda, including to boost productivity and growth, tackle intergenerational equity, and create a future made in Australia. These are worthy goals and ones we support.

Connectivity will be fundamental to achieving them, but it’s not a given. There is work to be done to get it right.

I don’t pretend to have all the answers, and there will be many ideas that others will bring, but I’ll note three that I see as fundamental.  

1.      We need to have the right digital infrastructure – in the air, in the ground and undersea

To do that we need a national digital infrastructure plan. A plan the telco sector can align behind, and work with other sectors like energy to deliver.

It should support our shared vision, and help accelerate the rollout of digital infrastructure by encouraging investment and making it easier and more efficient to build.

Let me give you two examples. The first is about infrastructure in the ground.

Right now, Telstra is building our new Intercity Fibre network – an almost 14,000km superhighway for Australian industries that rely on high-capacity, low latency connectivity.

If I look at just our Sydney-Canberra-Melbourne Coastal route. We have:

·       Issued 3,000 land access activity notices

·       Completed 1,723 land access surveys

·       Issued 1,128 construction certificates and notices

·       And completed 171 cultural heritage and environmental surveys

That’s more than 6,000 different actions taken to roll out just over 1,000 kms of fibre. That’s around six per kilometre. 

This is all part of deploying infrastructure in a country as large as Australia, and there are good reasons why these processes are in place. 

But the volume of legislation, regulation and different requirements across states and territories has added significant cost and complexity. And this is not unique to Telstra or this particular project – it’s something felt right across the sector. 

We need to find a better way that encourages investment and keeps our national vision in mind, and we’re keen to work with governments and regulators on that.

The other example is spectrum – our connectivity superhighway in the air.

It has different lanes or ‘bands’ that are used to deliver a range of services to Australians like broadcast tv and radio, mobile services, Wi-Fi and more. Each lane has limitations.

 It’s a scarce natural resource, and it’s vital to deliver mobile services to Australians. 

We licence a number of these lanes from the Government for periods of about 20 years. We make significant long-term investments in the mobile networks that run on this spectrum, and certainty of ongoing access is critical for us to continue to innovate and improve services. 

I want to emphasise that word certainty, because it’s certainty we need to enable the long-term investments we’re talking about.

We also need access to additional spectrum to meet growing demand and expectations. That’s because the amount and type of spectrum we can access has a significant impact on the experience of customers on our network.

For example, more low-band spectrum would improve coverage and reliability in regional areas. And more mid-band spectrum would reduce congestion and deliver better performance for things like streaming. 

We also need to access new spectrum to deliver exciting new technologies like 6G, and voice and data services over satellite to mobile, which will be crucial to delivering on the Government’s Universal Outdoor Mobile Obligation. 

There is an opportunity to think about spectrum in a new way. To look at how we use this scarce resource to the greatest benefit for consumers and businesses, whether that’s through a second digital dividend or some other mechanism. 

We need to have the discussion, and align decisions about spectrum with the goals we have for the country. 

2.        We need to ensure Australians have the right skills, access and confidence in technology      

This is about making sure Australians have the right skills as AI reshapes our economy and workforce, that they can trust that new technologies are being deployed responsibly, and that everyone has the opportunity to participate. 

We know AI brings big opportunities, but this is also uncharted territory with a lot of unknowns. 

The best way for us to ensure public safety and trust while encouraging innovation is to collaborate deeply.

We need all voices in this. We need a forum that includes consumers, employee representatives, business, tech and academia to ensure we can make the most of opportunities and manage risks from AI at the speed they appear. 

We also need a collaborative effort to help upskill our workforce, and build a pipeline of skills to support both the rapid adoption of AI and the rollout of infrastructure to support it.

As we do that, we must bring everyone along. There are still more than 2 million Australians who face significant barriers to digital inclusion related to access, affordability, or digital ability. These include older Australians, First Nations communities, people on lower incomes and people in regional areas. 

Access to technology has the potential to significantly improve education, economic and healthcare outcomes, particularly for regional and remote communities. 

Often this happens through co-investment between government and the telco sector, and I saw the impact this can have when I visited a remote First Nations community in the Tiwi Islands recently. 

The local kids there gave me a tour of their primary school, which had a connected smart board in each classroom to help enhance their lessons. 

We also visited an incredible Aboriginal art and culture centre that was selling works online. The role that technology was playing to help bridge the physical divide for that community was clear. 

And then if I think of healthcare, I remember growing up in Holbrook, at a minimum it was a trip to Albury to see a specialist doctor, or maybe Melbourne. I know some people in regional Australia travel hundreds of kilometres to access specialist care.

I look at the work Telstra Health is doing in virtual healthcare. The potential to close these distances and improve access to clinical care is enormous.

So there are significant benefits to be had from improving digital inclusion. We need to work together to make sure this continues to improve, and that the rapid adoption of AI doesn’t cause the digital divide to widen.

This includes looking at how we refresh and coordinate co-investment programs across the country, so they are targeted to deliver the greatest benefit to communities.

3.     We need the right regulatory settings that strike a balance between growth and risk. 

Regulation has an important role to play in the economy and in our sector, including on consumer protections, infrastructure rollout, competition, security, affordability and more. And we support that role.

But as Treasurer Chalmers has identified, we need to cut the clutter.

The telco sector is subject to more than 500 pieces of legislation and regulation. 

500 pieces, and that number grows each year.

Navigating this can be incredibly inefficient and costly.

We need to look closely at how we get the balance right between providing necessary guardrails and encouraging innovation and growth that would benefit Australians.

To do that, and because of the critical role we play for the nation, the telco sector should be included as one of the Government’s priority areas to deep dive on better regulation.

There should also be a target, similar to what we’ve seen applied in the United Kingdom, and so I support the BCA’s call to reduce business compliance costs by 25% by 2030.

This would mean looking at what regulation may no longer be needed – like our obligation to publish and distribute paper copies of the White Pages.

Where regulation and obligations could be modernised – like where there are more efficient and reliable technologies available than providing services over an aging copper network.

And how new regulation is planned and implemented – for example, by applying a Regulatory Incentives Grid to increase transparency and coordination, as has been done successfully in the financial services sector. 

Fundamentally, it means linking regulatory settings with the overarching vision for Australia’s digital future that we are trying to build. 

So as I said, I’ve been encouraged by the conversation we’ve started as a nation, and the recognition of the role that digital infrastructure plays. We now need to build on that.

Connectivity is a foundational piece we have to get right to lift living standards for the next generation, grow our economy and deliver benefits to all Australians. 

But it is far from a given. 

There is work to be done to get it right.

We need a shared national vision and a roadmap to deliver it, so we have the right digital infrastructure – in the air, in the ground and under sea. 

We need to collaborate on how we make sure all Australians have the opportunity to benefit from a digital future. 

And we need the right regulatory and policy settings that encourage innovation and investment. 

Technology and connectivity have transformed several times since the old phone line in my Dad’s pub, and they’re going to transform several times again in our lifetime.

To position Australia to prosper through those transitions, we’ve got to get aligned, and we’ve got to act.

I know from the corporate world, a vision and a plan can make a great set of PowerPoint slides, but it doesn’t mean anything unless you can translate it into a set of actions and get started.

I don’t pretend it’s easy, but every day that goes by without action means the opportunity starts to pass us by.

We’ve started a good conversation. We have lots of ideas. 

Let’s get on the road and get started.