G9 moves ahead on broadband… Seriously serial, and rich… Start-up growth slows… Rudd, Howard trade blows on carbon trading… WA may shift on AWAs… Working hours… Economy roundup…

G9 moves ahead on broadband plan

As new research emerges on the importance of faster and better broadband for the SME sector, the G9 group of telecommunications companies moved a step closer to making its broadband plan a reality last night when it lodged a broadband pricing and access proposal with the competition regulator.

New research by SmartCompany found that faster internet speeds would enable companies to innovate more, sell more, offer new products and services and change their business strategy.

Under the G9 proposal, broadband retailers would be charged $40–50 a month for wholesale access to the network for high speed broadband up to 24 Mbps, which would then be on-sold to a customer. The G9 is comprised of Telstra’s major commercial rivals including Optus, Macquarie, Primus and iiNet.

This compares favourably with Telstra’s rumoured price proposal of $70–80 per customer per month for wholesale access to high-speed broadband. Telstra has yet to make the price component of its broadband proposal public.

IT Wire telecommunications editor Stuart Corner says the G9 proposal is substantial and will put significant pressure on Telstra to put the full details of its plan into the public domain.

But he says G9 faces a big battle to get access the access to the Telstra-owned copper wire that runs between Telstra exchanges and homes, required to get broadband to customers.

“Telstra will fight tooth and nail to prevent G9 getting access to the copper. This is the biggest stumbling block for their plan and it would require changes to access regulations to make it happen. Controlling the copper is Telstra’s last great advantage and losing that would put them on a par with everyone else in the market, so they won’t take it lying down,” Corner says.

Telstra policy chief Phil Burgess has repeatedly said Telstra will fight any move by the G9 to take over any part of the Telstra network.

G9 members says they are lobbying the Federal Government in an attempt to obtain undertakings in relation to the regulatory changes required to give them access to Telstra’s copper network, a telecommunications analyst with connections to G9 members told SmartCompany today.

Macquarie Telecom chief executive David Tudehope says the G9’s preparedness to put its plan into the public domain contrasts starkly with Telstra’s approach. “Their discussions have all taken place behind closed doors and the challenge for them is to bring their plan into the open,”

– Mike Preston

Seriously serial… and rich

Remember how hard it was getting money for a great idea 10 years ago? Investing in start-ups is the flavor of the month, with many of BRW’s Rich 200 taking equity positions in small private companies.

Mind you, they can afford to take the risk. The average fortune increased by 25% to $688 million with the cut off point $180 million, up from $130 million last year. Driving the wealth boom is the resources boom but also the rapid expansion of the private equity sector fuelled by superannuation funds.

The good news for start-ups and business owners is many of the Rich 200 are serial entrepreneurs who are always on the look out for a good idea.

Who is seriously serial:

Laurence Freedman. The co-founder of funds management group EquitiLink has invested in more than 30 small listed companies including Polartechnics and Brain Resource Company.

Matthew Perrin. The former Billabong chief executive has invested in Ruleburst, software to help companies meet compliance requirements, and Krispy Kreme doughnuts.

David Shein. He founded IT company Com tech, and has invested in voice recognition software Holy Connects and retail software specialist Macromatix.

Gerry Harvey. The co-founder of the Harvey Norman retail chain has investments including Petsec Energy and Unwired Group.

Brian Sherman. The Equilink co-founder has investments that include Aequs Capital and Saracen Mineral Holdings.

Phil Cornish. The founder of telecommunications company Mobile Communications, has investments that include Eromanga Hydrocarbons.

– Amanda Gome

Start-up growth is slowing: new stats

Fewer Australian start-ups are emerging each year. The growth of new businesses in Australia has slowed over the past three years, according to new figures from the Australian Bureau of Statistics.

There were 1.96 million actively trading businesses in Australia as at June 2006.

The slowdown, from 2.2% growth in 2003-04 to 1.3% in 2005-06, is because of fewer new entrants to business. The entry rate for new businesses in 2005-06 was 16.2%, lower than 17.4% on 2003-04 and 16.9% in 2004-05. The exit rate was relatively constant at about 15%.

The really interesting stats come from the business exits. Only half of non-employing businesses founded in 2003-04 were still operating in June 2006. Start-ups with employees fared better: 80.4% of new employing businesses in 2003-04 were still operating three years later.

The figures make it clear that we are a nation of small businesses: 41% of business are employers. Most of these (almost 90%) employed fewer than 20 as at June 2006; 68.5% had 1-4 employees; and 31.5% have 5-19 employees. Less than 1% employed more than 200 employees.

Biggest growth industries by business numbers in 2005-06: Electricity and, gas and water supply (26%); Mining (22%).

Highest exit rates: Communication services (22%); Electricity and, gas and water supply (20%).

Only communications (-1.7%) and manufacturing (-1.3%) experienced a net decline in businesses compared to June 2006. Business survival rates were lowest in communication services and education.

Entry rates were highest in Queensland and the NT and lowest in SA and Tasmania.

Turnover growth as at June 2006:

20.6% turn over $0–50,000
39.7% turn over $50,000–200,000
33.2% turn over $200,000–2 million
6.4% turn over more than $2 million

– Jacqui Walker

Rudd, Howard trade blows on carbon trading

Prime Minister John Howard says he now accepts the need for a long-term greenhouse gas reduction target in what constitutes a big reversal in the lead-up to the release of a key government report on carbon trading today.

“If we move towards an emission trading scheme, that will, of necessity, include a long-tem target of some kind,” Howard said in a speech last night.

The reversal prompted Opposition Leader Kevin Rudd to move to further entrench his climate change credentials by announcing that $100 million for new R&D on alternative energy sources and committing Labor to have a carbon trading system in place by 2010.

The Coalition has repeatedly criticised Labor for failing to understand the economic consequences of its target of reducing carbon emissions by 60% by 2050.

Today’s report on carbon trading systems by the Prime Minister’s taskforce is expected to provide some key indicators on the direction the Government intends to take on climate change in the lead up to the election.

– Mike Preston

Labor is looking at AWA shift: Carpenter

Federal Labor will remove its opposition to AWAs for high income earners before this year’s federal election, West Australian Premier Alan Carpenter predicts.

He says it is likely federal Labor will adopt a policy that would allow workers earning more than $100,000 to go on to some form of statutory individual agreement, although they will probably not be called AWAs, The Australian reports today.

The move would be targeted primarily at WA’s mining industry, where many workers are earning big dollars on AWAs. “People who are on those very significant incomes in the mining industry or elsewhere are not being ripped off and they enjoy – and the industry enjoys – the flexibility that goes with them,” Carpenter says.

In other IR news, the Office of Workplace Services says its investigation into WorkDirections Australia, a subsidiary of Therese Rein’s Igneus company, will take several months to complete. This is bad news for Rein’s husband, Opposition Leader Kevin Rudd, as the investigation will keep the issue alive in the lead-up to the federal election later this year.

– Mike Preston

Working hours debate doesn’t add up

Australians are working shorter hours since the introduction of WorkChoices in March 1996, according to a report by the Australian Chamber of Commerce and Industry.

ACCI says that not only have average working hours have shortened over the past year, but the 1724 hours per year worked by the average Australian is standard for countries with similar economies.

The Government will welcome the ACCI data after recent Australian Bureau of Statistics figures showing almost half of all Australian workers regularly work unpaid overtime.

The ACCI report also contradicts a Grant Thornton survey released yesterday showing that Australian SME owners work the third longest hours in the world.

– Mike Preston

Economy round-up

Total private sector credit rose by a solid 1.2% in April, according to Australian Bureau of Statistics figures released today. A key driver of the strong result was a 1.7% jump in business credit, leaving annual growth in private sector credit at a very strong 14.5%

Private new capital expenditure rose by 9.1% in real terms in the March 2006 quarter, ABS figures show. The result is much stronger than market expectations of a 4% increase. Rapid growth in buildings and structures (10.1%) and equipment, plant and machinery (2.6%) are behind the result.

At 12.36pm, the S&P/ASX 200 is up a strong 1.2% to 6319.1 points off the back of record share prices in the US overnight. At the same time the Australian dollar is trading at US82.25c, well up on yesterday’s US81.77c close.

– Mike Preston


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