Australia’s future? It’s Digital, Mobile and Experiences

July 20, 2015
July 20, 2015 Chris Riddell

Australia’s future? It’s Digital, Mobile and Experiences

We are already half way there

Big news flash – Australia is one of the world leaders when it comes to mobile. Yes… you read that correctly, we’re absolutely nailing it. Big time.

Over the last few weeks I’ve had this conversation with quite a few people, right here in the land of plenty, and the looks I have had in response – were a mix of shock, bemusement and in one case, I was actually asked to repeat what I’d just said. Ask any Australian about their mobile service, and usually what you get is a contorted face, followed by a barrage of complaints about coverage, off shore call centres, and general complaining. There’s actually very little understanding of what the pain point really is. Price is one of the things that is frequent topic point, followed by the usual “Why don’t I have five bars of reception in the elevator?” and “Why does my phone signal drop out in the dip on the highway between Bacchus Marsh and Melton?”

I’m being just a tad provocative in this article and I am going to throw out the challenge to every single Australian to stop complaining, stop blaming, and realise just how good we really do have it here. Our job, for us all, is to pick up the ball and work as hard and fast as we can to re-invent ourselves as the world’s foremost digital leaders. Why? Quite simply because when it comes to mobile, no one is as well-placed as we are to charge ahead, and show the world some real stories of innovation. And whether you are in the financial services sector, retail, technology, entertainment, or to be honest, any of the others, I absolutely assure you – mobile IS the future. Ignore this fact at your peril. Let me give you some context…

Australians are going mobile

Consider these statistics from December 2014:

  • Nearly one-third (29%) of Australian adults are mobile-only phone users – they no longer use a fixed-line telephone.
  • More than a fifth (21%) of Australian adults don’t have a fixed internet connection, relying instead on mobile devices or a mobile broadband connection.
  • 12% of Aussie adults are exclusively mobile, using them for messaging, internet access and voice communication. It’s no surprise that these users are likely to be in the 18-34 year old age group. What’s interesting is that they are more slightly more likely to be exclusively mobile if they are living outside of a capital city.

These percentages have increased significantly over the last few years and if they follow the usual trends, they will grow exponentially into the future. Almost 80% of Australians now have a smartphone, giving us one of the highest smartphone penetration rates in the world. Here’s a fascinating insight – a recent study by the University of Sydney discovered that 95% of people who are homeless have a phone and for 3/4 of those, it’s a smartphone that connects them to the world and helps them to survive. This is an incredible statistic and shows that smartphone is no longer a luxury hi-tech item. It’s a basic necessity of life just like air, and water.

The future is now in our hands. Literally. 

You only have to look around the lounge in the airport, sit in a cafe, look at the car next to you in a traffic jam to know that Australians are spending more and more time on their smartphones. Of those people who use their phone to access the Internet, over half will do that more than 5 times a day. Almost all of those users are connecting to social media platforms at some point – that’s how almost a third of Facebook’s 1.3b users world-wide log in on a regular basis. But the mobile isn’t just being used for Twitter and Instagram. In fact, this year internet-based entertainment will eclipse TV as our preferred entertainment source.

It’s the Netflix led era of consuming content on the go, in full high definition, and uninterrupted. Whether it’s watching videos, reading books, accessing social media, doing your banking, listening to music, taking and sharing photos, checking the weather or checking in for their flights, Australians are connecting to the world via mobile. We are a nation of addicts. Data is our drug, and demand has never been higher.

Here are some interesting insights:

  1. Australians are quick, hungry and confident adopters of new digital tech – especially mobile. Quite simply, we love anything with a screen.
  2. Australians are also willing to spend money on new tech – we see the value and will readily part with our hard earned dollars for the privilege of having the latest, greatest and fastest.
  3. Despite the frequent complaining, Australians have a high degree of confidence in their mobile networks.

Let me say, and be really clear – the life we have here in Australia, of great connections and seamless tech experiences, is not the case everywhere in the world. The UK is a great example of where things have fallen by the wayside in recent years, as my recent trip over there demonstrated.

Not so Merry Olde England

When I was in England in July this year I was really disappointed to see just how far mobile had fallen behind. Way way behind.

The UK used to be an absolute powerhouse for technological innovation on the world stage. In fact, the UK was right at the cutting edge when it launched a swanky service called Ionica in 1995. They were the first real competitors to British Telecom (BT) in the old, traditional landline space. Their product was absolutely incredible. You simply got a small dish fixed to the side of your house, pointed it towards your local Ionica base station, and ‘Voila!’ you had a home phone line, which was much cheaper than BT, and, in many cases, gave you free local calls! BT had nothing to rival this, and were the clunky slow moving incumbent telecommunications provider. Ionica on the other hand, were hungry for success, passionate as hell, were innovating at the speed of light and went viral overnight. Demand quickly outstripped supply, and at its peak, Ionica was valued at over £1billion. Unfortunately their success was short-lived, and they sadly had to shut up shop.

The rapid downfall of Ionica was down to one thing. Technology. For those who want a geek moment, they were using a microwave-based system known as ‘Wireless Local Loop’. Unfortunately Ionica’s system working depended on the dish on your house, being in direct line of sight of the Ionica base station. Trees or buildings in the way were a big no no, so you can see how this was going to be a real challenge for them from the get go. A further nail in Ionica’s wireless coffin was, believe it or not, bad weather. If you happened to have a thunderstorm or lightning move into your area… forget it! You had no chance of hearing anyone on the other end of the phone. Amazing that no one really thought of this, considering how the UK is not exactly known for its warm, sunny climate. Whilst the technology was ideally suited for the wilds of Canada where it was a great success, it was distinctly unsuited to urban Britain. Ionica sadly weren’t meant to be.

Alas, Ionica closed its doors in 1998, but heres the big thing – It didn’t matter! During their short life they had raised consumer expectations regarding telecommunication and set the stage for a highly competitive mobile phone market. The early 2000’s were a time of rapid innovation in the UK mobile area and the customers benefitted greatly. The UK were world leaders in mobile, and consumers were bracing themselves for some pretty cool things to start happening, and they didn’t have to wait long. 2003 saw the launch of 3G for the first time in the UK, and it was a big deal. People were climbing over each other to get their hands on the first 3G phones, businesses were hailing this as a revolution for the UK, and times were exciting. The future was bright, super fast, and you could see your friends on a video call when on the go. Super cool.

Fast-forward to today and the scene is very very different indeed. I was astounded at just how poor the UK mobile coverage was everywhere I went a few weeks ago. Lets not forget we are in 2015. Also astounding was the way British public simply accepted this low standard of service from their mobile providers. For example, the EE (Everything Everywhere) Network’s answer to their customer’s experience of poor coverage is they suggest you should just use wifi network in your home to boost it. So many homes and businesses in the UK have no mobile coverage whatsoever when you go indoors, and its still accepted that signal just cant get through brick walls. Say what?

So, inside coverage aside – when you’re outdoors in the UK, you’d think that 4G coverage would be pretty much the norm? Think again. 3G, if you can even get it, is patchy at best, and mobile speeds on many of the networks are less than 1Mb a second. I did a number of tests on different networks over my week long trip, in 4 separate cities, and the fastest speed I got was just under 2mb, and literally for a fraction of a second.

I don’t want to pick on EE, but I’m going to, to make my point. Their story gives an real indication of why things have gone backwards so dramatically in the UK. EE were formed when two mobile networks, Orange and T-Mobile merged in 2010. Customers began by enjoying improved mobile coverage as they could access both of the networks simultaneously, that Orange and T-Mobile brought to the merger. That changed radically when EE, in their wisdom, decided to ‘streamline’ their infrastructure and ’rationalise’ the number of base towers needed. This decimated mobile coverage, and left what is in place now – a patchy, and sub standard network, which delivers nothing close to what the UK needs, and should be demanding as a mobile network in the world today – 2015.

How the mighty can so quickly fall

A ‘strategy’ like this makes no sense in this day and age. It creates a downward spiral where poor coverage leads to low customer expectations, which leads to unwillingness to adopt new technologies or products and inevitable revenues plummet. And the cycle continues.

I mentioned before, the UK introduced large-scale 3G in 2003 in contrast to Telstra who launched 3G in Australia in 2005. Fast forward to ten years later, Australia are now light years ahead of the UK when it comes to exceptional mobile coverage, blindingly fast mobile data speeds and great service quality. Given that our population is just over a third of theirs and it’s spread over an area more than thirty times that of the UK, how has this change in mobile leadership happened? Let’s also not forget we have three networks here pushing 4G heavily, and they have been for some time now.

I firmly believe the two key contributing factors to the demise of UK mobile firstly – a lack of investment in innovation and infrastructure by the Government. Secondly the telcos have clearly been getting stale, greedy and lazy, largely impacted by the impact of the GFC, and the willingness of the British business community and the wider population to accept the message that second-class service was okay. In ten years, these two factors – failure to invest in the future and an acceptance of mediocrity – shows how you can turn a world leader into a second-class digital global citizen. I love my native country to the hills and back and always will, but I’m saddened beyond belief to see how far it has fallen when it comes to investing in the mobile infrastructure to allow businesses to flourish. Why does it even matter? Because our world is more mobile, more virtual and more online than it has ever been, and the future, in this digital economy, absolutely depends on being able to keep connected wherever we are, and whatever we are doing.

Downunder is now on top

I said at the start of this article that Australia is one of the global leaders when it comes to mobile. Infact, we are firmly in the top 10. A recent study by OpenSignal concluded that Australian mobile users, across three networks, Telstra, Optus and Vodafone, all spent more than 65 percent of the time on LTE (4G), with Telstra ranking in as the winner at 77 percent. Compare that with the UK, they ranked the lowest in the world for 4G coverage. Seriously. Even the US ranked pretty well when it came to 4G as coverage goes, but then when speed tests were done, they dropped to the bottom of the global list.

Take into account, the enormous size of Australia, and the monstrous challenge that mobile network providers have to cover it with cell sites, things are going well. Very well infact.

The good news doesn’t stop here for the land of plenty. Our mobile network providers in Australia are not resting on their laurels and declaring the battle over. All three providers are battling harder than ever and are continuing to improve and expand their networks EVEN FURTHER. They are putting their money where their mouths are, and we are going to see billions invested over the next few years. New Telstra CEO, Andrew Penn, recently announced in his first major public speech, a massive investment in their network of over $5b between now and June 2017. Optus have quickly loaded their own guns, and returned fire with similar plans for upgrade and expansion. Infact, all three networks have stated their aim of delivering faster and more reliable next generation, high speed mobile services to the entire Australian population as quickly as they can.

In simple terms, the Australian mobile market is a highly competitive environment and who are the winners? Of course, the true winners in this battle are the consumers and also the businesses jumping off the back of this mobile revolution.

Again, why does any of this even matter? Very simple answer. If we want to win, in this ever competitive and hyper connected world, our country needs to be able to be online, and connected, wherever they are. Our future depends on it. Australia loves punching above its weight on the global stage, and we really can when it comes to the world of digital.

A word about the NBN

I don’t want to dwell on the National Broadband Network because when I think about it, it makes me pretty frustrated. The original idea was one of the best I’d ever heard in years, but you and I both know that what is being delivered is a far cry from what was originally planned for. A potential game-changer, the NBN was, dare I say it, castrated by a lack of vision and commitment by the Government and various other individuals behind the scenes.

Personally, I don’t think it’s entirely too late to rectify it, but I’m not sure the will is there anymore. It has tragically become a political football, and with the shift to mobile and the incredible potential of new mobile and technology coming around the corner, the nature of what we want has now shifted anyway. Hasn’t it?

The tech gurus and geeks will tell us that cables will always be able to deliver faster and more reliable connections than broadband and for that reason they’re worth having and investing in. That’s a big call, and I’m not even convinced its true anymore. When you get a glimpse of the potential of the super fast speeds and penetration possibilities of 5G it’s easy to see why. It’s literally mind blowing, and on a scale like nothing we have ever seen before.

5G – welcome to hyper-speed

Smartphones we now hold in our hands have 50 times the computing power of the super-computers of the 1990’s – the computers which were used by NASA and the US Department of Defence to launch spaceships into orbit. We simply couldn’t have imagined this technological leap in the 90’s or the implications it would have for the man or woman on the street. Well, let me tell you – what we are about to see in the near future is even more incredible.

We’re about to take another huge leap forward when it comes to mobile – 5G. Let me give you some quick bits to digest;

  • Over the next couple of years Telstra are aiming for peak 4G speeds of 600Mbps across the country as they roll out new LTE technologies.
  • Samsung have achieved speeds of 5Gbps in their 5G tests – that’s more than 1000 times faster than current 4G speeds.
  • Despite lagging as a nation when it comes to mobile, The University of Surrey has been pushing hard. Their Innovation Centre recently recorded a 5G data transfer speed of 1 Terabyte per second! A Terabyte is 1000 Gigabytes. In other words its colossal and they achieved a speed that was 166,000 times faster than current 4G speeds. To put this in perspective, at that rate you could download a full length high definition film in 0.03 of a second! Boom!

These figures are simply mind-boggling and it’s tempting to say, “That’s in theory… it will never happen.” But history tells us that you would be very wrong indeed to say anything like that – the reality is likely to be even more amazing.

In terms of the speed of rolling out this new technology, the Koreans want to demonstrate it at their 2018 Winter Olympics. The prediction is that 5G could be operational in Australia in just 5 years. That’s a game changer, and 2020 just looks a whole lot more exciting.

Wake up and smell the coverage

Again. Why does any or all of this matter? Mobile is truly now our gateway to the world. Whether you are a small business owner or a large multinational, it really does matter. With wearable devices and the internet of things (IoT), everything, literally everything wants to be connected and hooked up online. Your washing machine, dishwasher, fridge, car, light bulbs all want to get hooked up. If it moves, it wants to be online. Even if it doesn’t, it probably does anyway. As a consumer, tucked down in Australia, the world of online opens up networks and a world of possibilities that we can access in an instant.

Mobile is the future – that’s where our customers are.

So here’s my message to Australians and to Australian business leaders:

  • It’s time to stop complaining about mobile coverage, and realise we’re getting some of the best service in the world. Seriously.
  • Keep putting pressure on the Government, whichever side is calling the shots, to lift their game, show leadership and start deliberately and strategically investing in a viable future for this great country of ours.Our future is not selling rocks, it’s not salvation by making ‘stuff’ – our future needs to be digital, experience led, and innovation-driven. We need to be the Smart Country, not the Complaining Country or the Conservative Country.
  • Stop looking at the technology of yesterday and today and begin to focus on the technology of tomorrow, and explore the opportunities it will create for us. A simple question to begin with would be, “If I was able to deliver information and service to my customer in an instant, what would I do differently?”
  • Let’s drive harder to take our place as world leaders – leaders in research, leaders of innovation, leaders who find creative solutions to the world’s biggest problems, leaders who take Australian grit, determination and ingenuity and use it to create a brighter future.

Ladies and Gentlemen, our future is brighter than ever, and it is digital. These are exciting times we are living in, and Australia’s future is being reinvented in front of our very eyes. What part will you be playing in shaping our future? Will you be a leader and a visionary, or will you be a participant.

Either way, we are all going to be winners together.

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