Australian Telecommunications Industry Organization - Case Study Example

REPORT By Name Course Instructor Institution City/State Date Telecommunications Industry Management Brief Introduction Australian telecommunications industry consists of the retailers, carriage service providers, hardware sector, and program developers, content aggregators and content providers. In this regard, the carriage service providers, which include mobile network resellers and carriers, through carrier network infrastructure supply telecommunication services to the Australians. On the other hand, the hardware sector is liable for maintaining and building the network infrastructure needed for telephony, and offering customers’ hardware like mobile phone devices (Yoo et al., 2008, p.18). The value of Australian telecommunications industry is produced by mobile carriers, specifically Hutchison, Vodafone, Optus and Telstra. Between 2005 and 2006, the mobile carriers produced value added and revenues of $5.6 billion and $12 billion in that order. In contrast to 2001-02, the equivalent figures were $4.4 billion and $8.3 billion. What’s more, in 2005-06, almost 21,000 employees were employed by these carriers and salary adding up to almost $1.5 billion were paid out while in 2001-02, 18,800 employees were employed and almost $1billion in salary were paid out. Besides that, more than 20 million subscribers were services by these carriers as compared to 12 million in 2001-02 (AE, 2008, p.21). This proves that revenues in mobile telecommunications sector are continuing growing at an average rate of 6.0 percent annually, as noted between 2001 and 2007. On the contrary, the fixed-line telecommunications performance has been decreasing progressively; for instance, revenues of between 2001 and 2007 decreased by an average annualised rate of 5.0 percent. Still, the average rate of growth in incomes generated since 2000 by the mobile telecommunications is inferior to that of the 1990s. Subscribers to telecommunication services have increased from 7 million in 1999 to more than 20 million in 2006, and this indicates that the rate of mobile penetration heightened from 30 percent in 2001 to roughly 100 percent in 2006 (AE, 2008, p.20). Overall, almost 80% of all Australians aged fourteen years and beyond used or owned a cell phone in 2006. Key issues in regulation in relation to telecommunications services in Australia entail wholesale voice termination, the services’ declaration, Universal Service Obligation, content services, and the portability of mobile number (Grant, 2004, p.248). Looking forward to possible upcoming Australian regulation in telecommunication industry, assessment of regulatory progresses in Europe hints that spectrum liberalisation as well as wholesale SMS termination could surface as the main challenges in the coming days. Before mobile phone introduction, AE (2008, p.4) posits that car telephones exclusively utilised a given geographic area frequency band, which significantly limited the number of subscribers. In spite of the rise of third generation (3G) of mobile telecommunications, the 2G continues playing a crucial role in the Australian telecommunication market, justifying the enormous percentage of product segmentation in telecommunication industry in 2006. Providing data performance that is limited, 2G uses two networks to offer its services: Code Division Multiple Access (CDMA) as well as Global System for Mobiles (GSM). Hutchison’s 3 offered the first 3G technology in Australia in 2003, through W-CDMA (Wideband Code Division Multiple Access) technology (AE, 2008, p.4). First espousals of 3G network utilised the 2100 MHz band, mostly in metropolitan regions. For instance, Telstra and Hutchison’s 3 in cooperation run a 2100 MHz 3G network for 56 percent of Australian population living in urban areas, whereas Optus and Vodafone together developed and run 3G network of a 2100 MHz band to 55 percent of the total Australian population (AE, 2008, p.5). Cloud services supplier, including IaaS, SaaS opportunities Analysis Cloud services that operate perfectly can develop rapidly, for the reason that all end users are using a service offering that is standardized. In Australia the largest service providers in the telecommunication industry have aggregated the biggest income and spend the most in people, software, and infrastructure (Srinivasan, 2014, p.76). Importantly, economies of scale have allowed for lower expenditure on units resulting to a pricing that is more competitive, which drives additional investments in dependability and service innovation. Evidently, Australia’s telecommunication industry, particularly the sector for data centres has grown progressively in the last five years, supported by the ever-increasing fame of cloud computing. Whilst in its formative years, IBISWorld (2014) posits that cloud services are internet-driven, and Australia telecommunication companies are offering cloud services for businesses both small and large to attain economies of scale, improve the speed of information sharing as well as developing innovative services. Industry income is projected to rise by 6.2% in the coming five years from 2013 to reach $475 million (IBISWorld, 2014). In Australia, cloud services offered by telecommunication companies are at present being espoused by more than 80 percent of government institutions as well as enterprises. These developments have also been noticed in the consumer market. The Australian National Broadband Network (NBN) has offered a huge boost to the cloud services market, with futuristic investments estimated to worth $5 billion by 2016 (Livingstone, 2011). At present, the developments with regard to cloud computing are exceedingly concentrated in the metropolitan areas, but with time more decentralised tendency is projected to develop. What’s more, by 2020, the number of connected Machine to Machine devices will rise to almost 50 million. Based on Frost & Sullivan survey, they established that the change to a security-as-a-service (SaaS) has been steered by factors such as lack of competent IT security personnel. Frost & Sullivan also revealed that Australia together with New Zealand got $591.6 million profits in 2012, and they projected that the profits will by 2019 reach $1.61 billion (Livingstone, 2011). However, poor clarity in Australia’s privacy laws could hold back the country’s hopes of developing into Asian data centre-hub. Cloud suppliers often find it challenging to find out their responsibilities under the Privacy Act. Therefore, solving this predicament will obviously place Australia in a good position to get a piece of the international cloud computing industry. As heavyweights in global technology target Asia countries including Australia for data centre infrastructure deployment, the competition for finest authority is breaking out. In comparison to Singapore who is the likely victor, Australia as per (Christie, 2013) is in an inferior position as a likely data-hub because of the high costs of telecommunications, unfavourable regulatory laws and its position on Asia’s outside edge, and this leads to high network latency when Asian market is serviced by Australia’s cloud service suppliers.  One aspect boasted by the Australian Government is Australia’s stable regulatory as well as political setting.  Based on the 2012 Cloud Readiness Index, it is without a doubt, that the regulatory setting in Australia is the best, after being positioned reasonably highly than the other thirteen Asian jurisdictions. Whereas valuable regulation laws remains to be part of Australia’s time-honoured competitive strengths, Christie (2013) posits that the country’s privacy laws are bringing about noteworthy setbacks for suppliers’ of cloud services. Arguably, the privacy laws are short of distinction that subsists in scores of foreign privacy laws, specifically, the distinction between data processor and data controller. Australia’s privacy law fails to indicate who should control personal information and who should process personal information for the data controller (Legal, 2013). Therefore, this complicates things for suppliers’ of cloud services, who find it hard to determine their privacy responsibilities, and lead to long-drawn-out contractual negotiations with end users concerning the risk allocation related to cloud suppliers or providers infringing the obligations of the privacy that they cannot abide by. According to the regulatory law, suppliers of a cloud services lack control over personal information processed or stored by end users on its servers, and the suppliers will possibly lack accessibility to the data to establish whether it has personal information.  In this regard, a cloud supplier can offer cloud based infrastructure, platforms or software as a service to users, who afterward can make use of these services to handle or upload personal information. Scores of foreign privacy laws are different from Australia’s Privacy Act given that they differentiate between data processors and controllers.  For instance, in Singapore and UK, data controllers’ are put through a full range of legal responsibilities regarding personal information, and obligations placed on data processors are barely very limited. The Australia’s Privacy Act is applicable to all Australian-based cloud services suppliers who hold or gather personal information, and is also applicable to foreign cloud suppliers who amass private information in offshore data centres (Christie, 2013). Generally, customers in Australia will need foreigner suppliers of cloud services to contractually abide by the Privacy Act, because it forbids organisations from sending any private data to other countries except if particular exemptions apply, which includes assurance by the organisation that the foreign organisation getting the data will adhere to the Privacy Act. Key cloud computing suppliers in Australia include: TransACT, Macquarie Telecom, Pacnet, IBM, HP, Dell, Bulletproof, UXC, and Telstra. Other includes REMASYS, Ninefold, NEC IT, MBITS, Mastersoft, Fuse, Coretec, and Converga (Barwick, 2013). In this regard, Telstra, IBM and HP have specialised in cloud storage, business cloud hosting, disaster recovery, business continuity, and also host software solutions. TransACT provides an accurate cloud solution integrating the finest of breed Cloud Virtualization technology with controlled cloud services. TransACT skilled technical team are tasked with delivering cloud computing solutions for Australian customers. Presently, Telstra is Australia’s leading telecommunication company, and is at the moment specialized in computer clouds’ applications. Under the Telstra brand, the company offer cloud solutions that assist enterprises as well as service providers better handle their information technology infrastructure, computerize processes, as well as offer better communication services. On the other hand, IBM and dell are providers of Infrastructure-as-a-Service provider, and they also deliver developed infrastructure on demand. Partners for Australia’s cloud computing suppliers include the Australian government, t service providers who are internationally managed, communications providers, software developers, global systems integrators, operators of SaaS, PaaS, and data centres, as well as value added resellers. For companies like RealEstate.com.au and Xero, IaaS has proved alluring, and for companies such as Canon and Cash Converters, PaaS has permitted them to initiate cloud-based applications for both consumers as well as staff. For companies like NRMA Motoring Services and BioPak are providing SaaS services. According to Telstra, whereas reducing congestion and latency improving the cloud competitiveness in Australia, a number of drawbacks based on distance will hang about. However, these drawbacks do not prevent Australia’s telecommunication industry from producing world-class cloud services in various areas. For instance, a cloud services customer whose necessities were steered by a desire for a certain set of regulatory clauses and not a low latency may find Australia a moderately suitable supplier of cloud services. In other words, a mass storage provider would be less interested with latency and more interested with capacity as compared to an online games’ provider. Australia’s cloud computing comparative advantage surfaces from the cost of energy considering that the cost of energy will in the future be a main competitive driver for the evolving Australia’s cloud market, particularly the cost of electricity. In Australia, data centres are remarkable consumers of electricity, and so if relative cost of energy heightens considerably as projected, then the Australia’s telecommunication industry will be compelled to take advantage of Australia’s cost advantage in energy. Without a doubt, as the technical complexity and management of cloud facilities heightens, the suppliers must be prepared for extremely dynamic geographic undertaking of cloud processing in reaction to daily changes in the electricity cost at diverse areas. These progresses as per Srinivasan (2014, p.122) will probably make the division between non-base load as well as base load less significant. The future cost of energy will benefit Australian suppliers of cloud services because most of Asian demand will shift towards Australia as the cost of energy continues to rise. In Australia, Software as a Service (SaaS) is a rapidly advancing technique of delivering technology. Therefore, organizations who are seeking cloud services must reflect on which computing applications they move to SaaS (IDC, 2013). SaaS as per Telstra is a model for software distribution wherein applications are hosted by either the supplier of the service provider and provided to end users through a network, normally the Internet. SaaS in Australia is turning out to be progressively more prevalent delivery models that support service-oriented architecture (SOA) as well as Web services. The benefits that Australian companies get after implementing SaaS model include: Benefits of the SaaS model include: simple management, automatic updates, compatibility, improved collaboration, and international accessibility. Infrastructure as a Service (IaaS) is model for service provision, wherein Australian organisations are allowed to outsource the equipment utilised in supporting operations, which includes networking, servers, storage, and hardware components. In this regard, the suppliers such as IBM, Dell, HP, or Telstra own the equipment and are in charge of maintaining, running and housing it. Therefore, the customer usually pays only when using the equipment. IaaS has most customers to experience benefits such as Cost savings, which according to IDC (2013) is brought about by its lower costs of its infrastructure. Organisations are no more enduring the challenges of maintaining networking and hardware and equipment, or changing old equipment. Another greatest advantage of IaaS is the capability to quickly scale up and down in reaction to the organisation’s requirements. Suppliers of IaaS usually have the up-to-the-minute servers, storage and networking technology to house the customers’ needs. Other benefits achieved include faster time to market and focus on business growth. The table below shows the pricing of cloud services in Australia: Pay-as-you-go Australia Subscription per Month $0 Central processing unit (CPU) hours $.0374 per hour Random-access memory (RAM) hours $.023375 per hour Storage hours High Performance: $.0006 per hour Standard: $0.0003 per hour Economy: $0.0001 per hour Hardware-based networking (Multicast, NAT, Load Balancing, VPN, firewall, and VLAN) Included ($0.20 per hour for extra VLANs) and needs CPU or RAM usage to be included Other Public IP Addresses $0.0040 per hour Outgoing - Bandwidth First 10 TB: $0.20 per GB Next 40 TB: $0.18 per GB Over 50 TB: $0.16 per GB Inbound Bandwidth Unlimited Essentials Backup Days $0.3288 per day Essentials Backups (GB) $0.0033/GB per day Advanced Backup Days $0.6575 per day Advanced Backups (GB) $0.0033/GB per day Enterprise Backup Days $0.0000/day Enterprise Backups (GB) $0.0164/GB per day Twenty four seven phone Customer Support Included Recommendations In conclusion, Australia governments are recommended to continue playing the vital role in helping the telecommunication industry, particularly the cloud services sector by being the main source of demand. This can be achieved by directing all governmental businesses to Australian providers, so as to boost the reputation and merits of the cloud services suppliers and providers. Besides that, all stakeholders in the telecommunication industry must facilitate and expedite collaboration to shed light on and decide on the use of current regulatory conditions to cloud computing, especially with regard to data security and privacy. The stakeholders must as well compel the government to clarify the roles of data processors and controllers. Cloud service providers/suppliers should collaborate with other entities in telecommunication industry to set up policies for self-regulation in the industry that handles issues like contracts’ standard terms as well as duty to give notice of any security infringements. What’s more, the telecommunication industry must collaborate with the governments to make certain that the regulatory and policy framework promote the country as a hub for data centre so as to overcome other foreign competitors. A new supplier for cloud services must investigate the pricing and competitiveness state in Australia and globally with the intention of optimising their spending on communications infrastructure. References AE, A.E., 2008. Australian Mobile Telecommunications Industry: Economic significance and contribution. Government Report. Sydney: Access Economics Pty Limited Australian Mobile Telecommunications Association. Barwick, H., 2013. New suppliers join Australian govt cloud supplier panel. [Online] Available at: http://www.cio.com.au/article/465899/new_suppliers_join_australian_govt_cloud_supplier_panel/ [Accessed 20 August 2014]. Christie, A., 2013. Australia: Cloud computing and the new Australian privacy law. [Online] Available at: http://www.mondaq.com/australia/x/260826/Data+Protection+Privacy/Cloud+computing+and+the+new+Australian+privacy+law [Accessed 20 August 2014]. Grant, A., 2004. Australian Telecommunications Regulation: The Communication Law Centre Guide. 3rd ed. New South Wales: UNSW Press. IBISWorld, 2014. Data Centres in Australia: Market Research Report. [Online] Available at: http://www.ibisworld.com.au/industry/default.aspx?indid=555 [Accessed 20 August 2014]. IDC, 2013. trategic Shifts in IaaS, PaaS and SaaS to Advance Early Stage Cloud Adoption In Asia: IDC. [Online] Available at: http://www.idc.com/getdoc.jsp?containerId=prSG24494713 [Accessed 20 August 2014]. Legal, N., 2013. Privacy and the Cloud: Issues in Cloud Law - Australia. [Online] Available at: http://www.hg.org/article.asp?id=26496 [Accessed 20 August 2014]. Livingstone, R., 2011. The NBN and cloud computing … a marriage made in heaven?. [Online] Available at: http://theconversation.com/the-nbn-and-cloud-computing-a-marriage-made-in-heaven-4684 [Accessed 20 August 2014]. Srinivasan, S., 2014. Cloud Computing Basics: SpringerBriefs in electrical and computer engineering. Manhattan, New York City.: Springer. Yoo, Y., Lee, J.-N. & Rowley, C., 2008. Trends in Mobile Technology and Business in the Asia-Pacific Region. Sydney: Elsevier. Read More