Experts: Election result is bad for IT, but great for broadband

Experts: Election result is bad for IT, but great for broadband

Uncertainty and caution set to rule the IT industry until a result is clear

IT industry experts have said the hung parliament result of the Federal Election is bad news for tech companies, but great news for broadband regardless of who wins.

According to Ovum research director, David Kennedy, uncertainty was the key result to come from Saturday’s election. But he added that better communication and Internet services would be key to any alliance that takes power.

“Obviously, it would be preferable if we had a clear path for the industry,” he said. “Both sides of politics are going to be pursuing the votes of the independents in rural Queensland and NSW and they’ve nominated communications services as important for them.”

Kennedy said the Labor Party had the initial upper hand thanks to its established plant to roll out fibre optic networks to rural and regional areas. However, the research director said this offered the Coalition a chance to ramp up spending in just the key electorates.

“If the Coalition was to offer more, what they’d probably do is offer something in terms of fixed broadband communications in the larger towns and major centres in these electorates,” he said. “On the whole we’ll see more investment in broadband specifically in rural and regional Australia. Even if the Coalition wins, we’ll see and increased spend compared to what they took to the election.

“You could argue that the Coalition, because they’re focusing on rural broadband policy, are going to get more bang for their buck in negotiations with the independents.”

Kennedy also speculated that the DSL upgrade funds proposed by the Coalition could be used in the target electorates to greatly boost existing services.

“You’d be looking at something in the order or billions, but single billion figures rather than double,” he said. “They’d be able to achieve substantial improvements in access to services while spending a great deal less than the Government is proposing.”

Australian Information Industry Association (AIIA) CEO, Ian Birks, said the IT industry would be very confused by the result and wanted certainty as soon as possible. But he agreed the result would bring better broadband offerings from both major sides of politics.

“We’re at the top of the totem pole in terms of issues so there’s got to be opportunity there,” he said. “A number of the candidates referenced broadband as being a critical issue in their electorate.”

Birks said while the three key independents were all from rural or regional electorates, he was comforted by their public assurances that they’d think for the nation’s interests.

“I think the Liberal Party was probably surprised by the level of significance of the issue,” he said. “If they were honest they probably would admit that they undercooked their policy.

“Broadband has a bigger payback in rural and regional Australia than it does anywhere else,” Birks said. “Rural and regional markets have the opportunity to be transformed by broadband and the applications that run on it.”

Australian Computer Society CEO, Bruce Lakin, said he wasn’t overly surprised by the result, despite thinking that the Labor Party would win by a slim majority.

He also said it was very positive that the three key independents were talking about broadband.

“What we’ve talked about for along time is the importance of high-speed broadband across the nation,” Lakin said. “We are hopeful that whichever Government comes to power will recognise the importance for ICT and the need for consolidation of portfolios.

“I think it is damaging just because it’s a hiatus. People are now being cautious and marking time waiting to see what the outcome is going to be. That can’t be good for the country.

“We’ve got to get the uncertainty out of the political arena and we’ve got to get some clear indication of what the direction of the future Federal Government is going to be. When that’s in place… then we’ll be able to make a better assessment of the platform positions of the incoming Government.”

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Tags ovumian birksNational Broadband Network (NBN)Bruce LakinAustralian Information Industry Association (AIIA)braodbandAustralian Computer Society CEO


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