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Launch of Vodafone Globalstar, 11.30 am, 30 March 2000, Park Hyatt Hotel, The Rocks, Sydney.

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SENATOR THE HON RICHARD ALSTON Minister for Communications, Information Technology and the Arts

Launch of Vodafone Globalstar 11.30am 30 March 2000

Park Hyatt Hotel The Rocks SYDNEY

Rob Ferguson (Chairman of Vodafone), Andrew Bissex (Managing Director, Vodafone Australia), Sara Henderson in Dubbo, other guests.

I had the opportunity last week, while in regional Queensland, to try out one of the Globalstar dual mode handsets. I wish I could inform you that I had placed a call to some exotic location - Tahiti, Cable Beach or Paris.

But alas, my call was to my office in Canberra - although the connection was fine.

I am delighted to join you here today for the launch of a new competitive offering in the Australian telecommunications market - particularly for customers in rural and remote Australia.

In the context of the current inquiry into the adequacy of telecommunications services in Australia the appearance of a new satellite mobile telephony service is important.

Our election commitment was to hold an independent inquiry into telecommunications services prior to any further sale of shares in Telstra. The inquiry is still in its infancy but I understand it is holding its first meeting today. Arrangements for the lodging of submissions should be announced following that meeting.

I have no doubt that Globalstar representatives will be singing the praises of their product to the inquiry as soon as possible.

I wonder also if Globalstar may have in mind the prospect of participating in the competitive provision of the Universal Service Obligation (USO). I announced last week that the Government will be moving to run two pilots to test the contest of contestable USO provision. This is an important element in the Governments approach to revitalising the delivery of the USO and our push to permanently improve the quality of telecommunications services.

Sections of the industry, including Vodafone, claim that competition in USO delivery can improve service quality and standards for consumers through the use of newer technologies such as satellite and wireless. The Government is keen to explore these and any other reasonable means by which consumers can receive better service.

Arrangements for the pilot projects will be finalised by Government in June 2000 following consultation with the States, Territories and stakeholders.

It's common, when discussing competition in telecommunications, to focus on the more visible consumer end of the market - the explosion in the number of carriers and service

providers, the dramatic reduction in call costs and the improvements in customer focus.

We less often consider another benefit - the developments in technical and commercial innovation that flows from the imperative to stay ahead of the competition. It's this innovation that drives improvements in service cost and quality.

A good example of this innovation are the new ways to improve the range and data rate of cellular mobile communications.

In the data rate area, enhancements to GSM (GPRS and EDGE) and enhancements to CDMA (ultimately leading to 3G) will increase data rates and thereby provide a wider range of applications, including mobile internet, to Australians in the next few years

In the area of increased cellular range, outside of the 10% or so of Australia's land area already covered by existing cellular services, improvements are being made to cellular technology that will improve services to rural Australia.

I noted with interest the recent announcement by Vodafone and Ericsson that trials of Enhanced Extended Range GSM have seen ranges of up to 121 km being reported. This compares with the standard GSM cell range of 35 km and is comparable with that achieved by CDMA cells.

I understand Vodafone propose to embrace this technology as a standard feature in its GSM network. It has the potential to significantly improve telecommunications services in regional Australia.

And, of course, there's satellite communications.

For a continent as large and as sparsely populated as Australia, satellites offer a solution that terrestrially-based services cannot.

By providing an extension of cellular range to encompass the entire continent - and surrounding islands - satellite systems are now recognised by farm and rural lobby groups as the ideal way to improve rural communications.

The Government has long recognised the importance of satellite systems.

By providing a service capable of operating on the Vodafone terrestrial network, or on satellite, the Globalstar service effectively marries the best of both satellite and terrestrial systems.

I understand that following some hard negotiations with handset suppliers Globalstar have managed to bring the handset price down to under $1000 - and even less for primary producers. This certainly is a competitive offering.

The Government recognises that these types of cutting edge technological developments bring a high degree of commercial risk.

It is a strength of the Australian telecommunications industry that competitors are prepared to take a risk in order to improve services to Australians. In this regard, the Government applauds the innovative approach of Vodafone Globalstar, and wishes it all the best.

Thank you