Mobile phone industry contributes more than $5 billion to Australia’s economy each year

A report released today by the Australian Mobile Telecommunications Association (AMTA) shows the mobile telecommunications industry now contributes more than $5 billion per year to the Australian economy.

“This is more than either the automotive vehicle component manufacturing sector or the accounting services sector,” AMTA CEO Graham Chalker said.

To better understand the economic significance of the mobile telecommunications industry in Australia AMTA engaged the Allen Consulting Group to undertake a research project. The research found that the industry makes a substantial and growing contribution to the wider telecommunications industry and the Australian economy. In 2002-03 Industry Gross Product was $5.16 billion.

In 2001-02 more than 32,000 people worked in the industry which accounts for more than a third of total telecommunications employment and more than $1 billion in wages. This was almost a 50 per cent increase on the number of people who worked in the industry in 1996-97.

“The mobiles industry has become a key part of the Australian economy and a significant employer,” Mr Chalker said.

In 2003, the industry will invest an expected $1.4 billion in capital to support new networks and expansions and upgrades to existing networks. This is in addition to regular operating expenditures. Since 1997, capital expenditure on new networks has exceeded $8 billion, the report found.

“These investments underpin expansions to mobile network coverage that make mobile services available to more people in more places as well as supporting the development of new services which Australians are embracing,” Mr Chalker said.

Today the industry has almost 14 million subscribers, in more than 50 per cent of households, used by at least 65 per cent of the Australian population. In fact, mobile services now exceed fixed lines. In June 2002, there were 12.7 million mobile services compared to 11.4 million fixed services.

“This has lead to new trends in the way people use mobile phones.

“People like the convenience of a single phone number to be contacted on regardless of their location, combined with cheaper prices for mobile services making this an affordable option,” Mr Chalker said.

No one would be surprised to find out that young Australian’s are embracing text messaging in increasing numbers. In 1998 data services accounted for only one per cent of total carrier revenue. However, in 2002, this had increased to 7.5 per cent with this trend likely to continue, he said.

“There is also strong growth in pre-paid mobile services which allow customers to better manage their mobile phone costs,” Mr Chalker said.

Customers using pre-paid services increased from one per cent in 1996, when pre-paid services were introduced, to nearly 40 per cent by the end of 2001. Pre-paid subscribers now make up between 55 per cent and 60 per cent of all new subscribers, he said.

“The growth of the industry continues at a significant rate – between 2002 and 2003 there was 13.5 per cent growth in customers – with particularly strong growth in regional Australia where the industry and government have been making major investments to provide services to as many Australians as possible,” Mr Chalker said.

“This growth has occurred alongside significant decreases in price. Over the period 1996-97 to 2001-02 the cost of mobile telephony decreased by almost 30 per cent,” he said.

Significantly the report notes that economic measures do not capture the many ways in which mobiles contribute to improvements in the quality of people’s lives. A significant benefit of mobile telecommunications continues to be the accessibility and freedom to reach people on the move and for them to be able to maintain contact with other people. To further understand the nature and extent of the impact of mobile telecommunications on Australian society, AMTA intends to commission research on this issue in 2004, Mr Chalker said.

Media enquiries:

AMTA – Matt Stafford ph: 03 9696 5444 or 0409 977358

The Allen Consulting Group – Dr. Jerome Fahrer ph: 03 9654 3800

Link to Executive Summary

Electronic copies may be obtained by email to ann.wellsmore@amta.org.au