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Legislative Assembly for the ACT: 2001 Week 10 Hansard (29 August) . . Page.. 3631 ..

MR HUMPHRIES (continuing):

While all shareholders in TransACT are actively seeking a return on their investment, Actew and the ACT government have also seen the company as a long-term investment in the social and business development of Canberra. Canberra has more than 800 businesses involved directly in the information technology industry. It has more than double the national percentage of people working in the industry, many of those being in small businesses, often working from an office in their home. With access to a sophisticated broadband network, many of these businesses will be able to continue their operations in the ACT in the future, and compete effectively with their counterparts interstate.

Canberra's schools and tertiary institutions will be able to connect to a territory-wide intranet, providing cost savings and new accessibility for teachers, students, administrators and parents. As long as there is a monopoly in this market, we will not receive the same services as other capital cities do. The ACT will always be treated as a backwater, unless we have a company prepared to take on incumbent firms and be innovative in the services it provides. This is about ensuring the long-term future of Canberra and providing a quality of life that is second to none in the nation.

When TransACT began, its directors did not expect the road to be totally smooth. As with any new venture, there was always going to be an element of uncertainty. However, the downturn in the telecommunications industry internationally, and the problems caused by that downturn-which quite clearly TransACT does not have the capacity to influence-have nonetheless affected TransACT. In particular, the inability of Nortel to continue as a supplier of technology and related vendor finance, following their major losses overseas, increased the technical complexity of the TransACT rollout and complicated the financing of working capital.

Staff have been working exceptionally long hours to provide solutions and ensure the long-term future of the project, and I am advised that most of the adverse effects are now behind them, and that they are ready to begin connecting customers again.

International experts believe that the slowdown in the telecommunications industry is only temporary and, with major companies restructuring themselves to take advantage of the increased demand for new technology, it is expected the flat growth will only last around 12 months. One bright spot in the world market is the Asia-Pacific region and, in particular, Australia. A report by respected industry analyst Paul Budde, released only in the last few weeks, and paraphrased by industry magazine Communications Day, states:

Australia's telecommunications carriers could be saved by the broadband boom, which will enjoy spectacular growth in the second half of this decade and become a $90 billion market by 2010.

The ACT represents around 2 per cent of the telecommunications use in Australia, with that figure growing. If TransACT were to pick up only a quarter of that potential Australian market, which is much less than market research indicates, the company could take around half a billion dollars from that market in less than a decade. That would be an excellent return on investment to Actew, and consequently to the ACT government. Those figures do not include the other areas that TransACT is involved in, such as telephone and video services.

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