This chapter presents the case study of telecommunications licensing measures for industry development in Australia. It first reports on the conditions in the telecommunications industry generally and the equipment industry in particular. It acknowledges the recent initiatives to liberalize the telecommunications market. It then surveys the development of policy for the growth of the local equipment industry. It considers the opportunities for government to further such a policy within the new regulatory structure. It looks in particular at the commitments of the public (core) carrier and the second (private) carrier under the new licensing system. Finally, drawing on recent overseas experience, it projects the impact which privatization has on government's ability to influence industry development.

INDUSTRY CONDITIONS

THE SIGNIFICANCE OF THE TELECOMMUNICATIONS MARKET

The field of telecommunications is, of course, substantially larger than the question of local innovation suggests. It represents a huge field for the application of advances in technology to a variety of customer uses. Telecommunications technology is rightly regarded as an enabling or core technology (Houghton and Partridge, 1991). As a result especially of its convergences with computer and broadcasting technologies, it is opening up opportunities for new markets in facilities and services. Much of the recent focus of telecommunications policy has been on the means to encourage the provision of these new facilities and services to the potential customer. A major target in this respect is the business user. The new technology offers more powerful and sophisticated means to convey and coordinate information of a financial, commercial, legal, manufacturing or sales nature.