In November 1992 the Government commenced implementation of its telecommunications micro-economic reform of the public sector by awarding an exclusive ten year contract with BT Australasia for the provision of telephone and data services, and shortly thereafter a contract with Telecom/Motorola for a Government owned Mobile Radio Network.

The aim of these whole-of-Government telecommunication contracts was to enable the Government to increase the efficiency of the public sector, achieve whole-of-Government cost savings, provide better service to the public and business, to significantly boost the State's telecommunications industry and to attract new telecommunications carriers to headquarter in NSW.

The BT Telephone and Data Network

The BT contract, in particular, is of major significance to New South Wales in that it provides for a $2 billion industry development program. BT have already committed to investment of over $100 million to the State in the last several months, with over $60 million being invested in export related procurement.

BT's commitment to installing one of the world's most modern digital telephone and data networks specifically tailored to the Government's needs has progressed ahead of schedule with BT outlaying $40 million for the first phase. This will facilitate the realisation of savings estimated at over $280 million to the Government over the term of the contract.

It is anticipated that Government agencies, authorities and departments will be progressively committed to our network over a period of 12 months, commencing 1 December 1993.

I am seeking your assistance to ensure that the Agencies in your portfolio provide every assistance to BT and commit to connection to the network at the earliest possible time.

To ensure Agencies minimise capital expenditure and make maximum use of the telephoneldata and radio networks, a rigorous approval process shall be required for each capital proposal by each agency.

This will in turn guarantee that Agencies will gain immediate savings in telecommunications expenditure and will ensure BT's rate of industry development will continue.

The Government Mobile Radio Network

The Government has also embarked on a major reform of its radio networks.

There will be a progressive replacement of over 30 separate radio networks into a single integrated radio network, which will be owned by the Government.

The Government's Mobile Radio Network will initially cover the major population areas of Sydney-Newcastle-Wollongong as well as the main arterial corridors to Orange, Queanbeyan and Muswellbrook. Expansion of network coverage will be progressed according to user demand.

The Government's radio network will be built by Telecom and Motorola and will involve local assembly/manufacture, saving the Government about $40 million over the next five years and provide additional industry development initiatives of over $20 million.

To ensure the Government benefits to the maximum extent from its radio network, it is necessary for agencies to convert to the network at the earliest possible time.

New Carriers

The Government's strategy in attracting the new telecommunications carriers to NSW has been successful with both Optus and Vodafone locating in Sydney.

As it is the Government's intention to provide service opportunities to both these carriers, as well as Telecom, it will be necessary for BT and the Government to periodically release tenders for the provision of cellular mobile telephone and other services as these become available from all three carriers.

So as to ensure that the Government achieves the optimum mix of services from the Carriers while at the same time recognising the Carrier's state development commitments, all service contracts will be co-ordinated through the Commercial Services Group's Telecommunications Unit.

The Government's administrative and technical directions are set out in the attached paper. I would be pleased if you would bring these matters urgently to the attention of all agencies within your portfolio and I would appreciate your assistance in ensuring cooperation with the new requirements.

By properly pursuing these ambitious aims the Government will be able to achieve its long term information and telecommunications strategy of creating an environment which will make NSW a major centre of high technology-based industry in the Asia-Pacific region.

J J Fahey
Premier