Dear friends and colleagues,

Last month, the Israel Trade Commission hosted and coordinated meetings in Australia for a delegation of 11 Israeli mobile technology companies in order to explore opportunities in the Australian market. The group is part of the Israel Mobile Association (IMA - www.imaworld.org) which includes over 100 companies in the mobile technology field.

This unique delegation included a variety of companies representing different aspects of mobile technology. They were Radvision, Radcom, Septier, Bamboo, Celltick, Olista, Telmap, Tellemessage, Starhome, Unipier and TTI Telecom.

Paul O'sullivan, the CEO of OPTUS and his senior managment team met the group and also hosted a networking event. The group also held meetings with Telstra and Vodaphone, and met with vendors, system integrators and other players in the market. The visit to Australia gave the Israeli companies an invaluable opportunity to meet the main players in the Australian telecommunication market, and presented an opportunity for the telcos to be exposed to the latest developments in Israeli mobile technology.

In September 2005 we anticipate the visit of Ehud Olmert, the Israeli Vice Prime Minister & Minister of Industry Trade and Labour. He will lead a business delegation from Israel to Australia and we look forward to this exceptional opportunity to increase trade between the two countries.

If you are interested in receiving more information, or taking part in this delegation, please contact me at your earliest convenience.

Nili Shalev
Israel Trade Commissioner

Quarterly national accounts figures showed economic growth for the first quarter of 2005 was 0.7% and would have been negative if not for a build-up of retail and warehouse stock. NSW and Victoria recorded notably lower growth while Queensland and Western Australia grew more strongly.

The Federal Treasurer, Peter Costello, welcomed the housing slowdown shown in the National Accounts figures, as it was growing at an unsustainable pace. The impact of the drought in Australia, now evident in four quarterly falls in agricultural production, is now affecting the measure of overall economic growth.

Australian Bureau of Statistics figures reveal that Australian house price growth in the last year was the slowest in nearly a decade. Prices in Sydney, Melbourne and Canberra actually suffered declines.

The weighted average of selling prices for established houses in the capitals cities showed prices nationally increased by only 0.2% in the March quarter giving an annual increase of a modest 0.4%. This is the weakest performance by residential housing in quarterly terms since September 2000, and the worst in annual terms since March 1996.

The technology sector had its biggest growth in job vacancies so far this year, recording a rise of 8.69 per cent, seasonally adjusted, in May, according to a new survey.

IT&T was the top performing employment sector in May 2005, based on numbers. It bounced back from relatively flat growth of 0.48 per cent in April. The IJI overall reached a new record high in May, with 155,738 Australian job advertisements on the internet.

Australia's already hefty technology trade deficit ballooned a further 15 per cent last year to $19 billion, according to the Australian Computer Society's annual ICT Trade Update report. Exports of ICT goods and services from Australia were worth $US5.4 billion in 2004, well down from the $US7.8 billion exported in 2000, while total imports grew by 10 per cent to $US24.4 billion.

While the deficit in ICT trade can be seen as a willingness of local business to make the investment in new ways of improving competitiveness, Australia was missing the potential productivity benefits of a strong ICT production industry.

Telstra has a new chief

Telstra has appointed US telecommunications executive Solomon Trujillo as its new chief executive. Mr Trujillo expressed praise for outgoing chief Dr Ziggy Switkowski whom he replaced on July 1.

Mr Trujillo will bring 30 years experience in the telecommunications industry to the role including stints as chief executive at Amercian telco US West and French mobile provider Orange.

Telstra is set to trial a new Israeli-made instant messaging device pitched
as a discount teenage alternative to high-priced Blackberry and Treo terminals. On a recent trade trip to Israel, Telstra GMD Ted Pretty revealed that his company was to spend between US$5 and $10m in a trial of the Ogo device, manufactured by Israel mobile company IXI Mobile.

Pretty revealed the new trial during an Australian trade delegation that met with around 50 companies in June. IXI Mobile has attracted investment from VC firms in Taiwan, Israel, the UK and the US, including the VC arms of Intel and Texas Instruments.

Telstra Bigpond's fixed-line broadband business has taken on another 300,000 customers since April 2005, bringing its total subscriber-base to 800,000. The carrier said take-up of the service was continuing to grow rapidly and reiterated the company's plan to move into the consumer wireless broadband market in the near future.

The number of dial-up internet customers stands at 1.2 million, taking the company's total internet subscribers to two million. ADSL service continued to dominate broadband service growth, accounting for nearly a quarter a million new broadband services during the March 2005 quarter.

Sensis has acquired mapping specialist and licensing partner Universal Publishers in a transaction the Telstra subsidiary claims places it at the forefront of the digital mapping industry. The acquisition brings together Universal's urban and regional mapping data and Sensis' digital mapping business.

Sensis chief executive officer Bruce Akhurst claimed that Sensis had the largest and most up-to-date database of navigable mapping content in Australia.

Growth in Australia's $11-billion-a-year mobile phone sector is collapsing amid fierce price competition and market saturation, according to Optus. Both subscriber and revenue growth are believed to have slowed in the final quarter of the 2004-05 financial year as the four network players tip billions

Optus proposes $26m Alphawest takeover

Optus, the nation's second largest telco, has made a takeover bid of nearly AU$26 million for Australian IT services provider Alphawest. Optus told the Australian Stock Exchange it would make an off-market offer of 68 cents per share.

The Alphawest board has unanimously recommended its shareholders accept the proposal. Optus CEO Paul O'Sullivan said in a statement that it would boost their national presence and complement their areas of existing strength.

Optus' proposal follows a number of recent acquisitions by competing IT services providers. Last year, IBM acquired local network integrator Logicalis for AU$88.5 million, and Telstra purchased Kaz Group for AU$333 million.

Vodafone outgrows rivals

Third-ranked mobile phone company Vodafone is set to outgrow its rivals for the second straight quarter, after grabbing 160,000 new customers for the three months to June 30, 2005.

Vodafone now has 2.89 million directly connected customers in Australia - 3.2 million including its wholesale customers. Second-placed Optus has 6 million customers. An increasing number of Vodafone's customers - 71 per cent - are using prepaid services, with more than 15 per cent using popular monthly capped rate calling plans.

Vodafone bets $150m on CRM

Vodafone's Australian business is spending $150 million deploying a new customer relationship management and billing platform to be completed by next March.

Vodafone's move comes as rival Optus begins a major review of its customer systems following the recent restructure of the number two telco into four main customer divisions.

Australia's Mobile Phone Use to Exceed 100% in 3 Years

Australia's cellular penetration for the first time last year surpassed "natural saturation," signifying that every Australian who could be using a mobile phone is already using one, according to the latest research into the local mobile market.

The 3G launches by Australia's three largest wireless network operators this year will renew interest not seen since the transition from analogue to digital mobile communications more than a decade ago. The number of Australian mobile phone users will grow by 7.4% to 19.2 million in 2005, with service revenue growing at a rate of 8.4% to A$8.7 billion.

Vaile backs bush broadband

Mark Vaile, the incoming National Party leader and deputy Prime Minister of Australia, has thrown his weight behind a bold proposal to roll out a state-of-the-art broadband network at a cost of at least $7 billion to ensure that rural and regional areas keeps pace with cities after the full privatisation of Telstra.

He has backed the proposal from the Nationals' Page Research Centre for a taxpayer-funded fibre-optic broadband network across regional Australia. Construction company Baulderstone Hornibrook has costed the proposal at $7billion, while Telstra and Optus say it would cost more than $20billion.

Wireless broadband internet company Unwired has signed up 25,000 subscribers, helped by "word of mouth" referrals. The company is already the leader in Australian wireless broadband in customer numbers, even though it is currently only available in Sydney, which is equivalent to less than 25 per cent of the overall Australian market.

A recent survey of Unwired customers found 53 per cent bought its wireless broadband modem to free up their phone line for calls while 91 per cent liked the product's simplicity, the company said.

Australia's third largest internet provider IiNet is planning to reduce its reliance on Telstra by installing its own voice equipment across the carrier's copper network. The Perth-based internet provider has told its institutional investors it wants to begin installing its own Multi-service Access Network (MSAN) in Telstra exchanges within a year.

IiNET chief executive Michael Malone said it was possible to offer Voice-over-IP to its customers under current line spectrum sharing arrangements. However he said it was more likely to serve as a "bridging" technology, only.

IBM takes share of $600m deal

IBM Global Services has grabbed a slice of Fiserv's massive 12-year $600 million cheque processing contract with three of Australia's four largest banks.

Under the terms of the $50 million deal, IBM will provide a range of IT services, including infrastructure, networks and desktops, application development and management to US supplier Fiserv.

Police network under fire

The Victorian Government has been forced to defend its $170 million police mobile data network, saying it will be able to receive pictures of suspects and missing persons despite running data at only 20Kbps.

With police cars and ambulances due to begin using the Motorola dataTAC system soon, it has been criticised by the Opposition as "out of date" and over budget. The Victorian emergency services system will run on its own dataTAC network. About 700 Victoria Police vehicles (about half the fleet), and more than 300 ambulances will have the data screens by the end of the year.

The whole-of-life identification system enables individual animals to be tracked from birth to slaughter for food safety and product integrity. With 70 per cent of Australia's beef product exported, the system will also help uphold overseas confidence in Australian beef and diary products.

Hospital systems on critical list

Hospital systems are so poorly managed that planned electronic health record schemes are destined to fail, leading industry bodies have warned.

The Australian Electrical and Electronic Manufacturers' Association and the Australian Information Industry Association found none of six NSW public hospitals featured in a study could seamlessly deliver an electronic discharge summary, let alone join state networks or the nationwide HealthConnect.

HealthConnect hazy on details

Plans for the nationwide rollout of the HealthConnect patient records network have been published recently, but the long-awaited implementation strategy is lean on technical detail. The revised Federal Health Department strategy says that the exchange of information between disparate information systems will be based on the use of standards - including terminologies and coding sets - to achieve interoperability.

Decisions are yet to be made on the design of the HealthConnect database, including who will develop the system and specifications for software and data sets.

Investment in R&D likely to drop

Analysis of the budget by the Federation of Scientific and Technological Societies (FASTS) has shown that Commonwealth investment in R&D will drop to below 0.6% of GDP in 2005/6 - the lowest level in two decades.
The President of FASTS, Professor Snow Barlow, said that despite the modest increases in R&D, Commonwealth investment in R&D was projected to fall to 0.597% of GDP in 2005/06 - down from 0.66% in 2003-04 and 0.62% in 2004/5.

Professor Barlow warned that the trend was a direct threat to Australia's economic growth and long-term productivity. He also stated that investment in R&D as a percentage of GDP is an important indicator of future economic growth.

Uni replaces $250m research unit

The University of Melbourne has opened a $100 million science research institute, just one day after announcing the closure of its controversial $250 million private arm.

Around 230 scientists have already moved into the Bio21 Molecular Science and Biotechnology Institute, in Parkville, which began work in January and has already shown results in parasitology, plastics and pesticides.

The institute plans to grow over the next two years and to host up to 450 researchers, including more than 150 students, and 15 companies.

Food Innovation Grants program extended

The Australian Government has boosted the funding for the National Food Industry Strategy (NFIS) Food Innovation Grants (FIG) program by $12 million.To date, seven rounds of the FIG program have provided grants totaling more than $30 million to 36 companies, leveraging new investment in food industry R&D and innovation of $71 million. Two further rounds will be held in 2005.

Theft fears rule out national card

Attorney-General Philip Ruddock recently said that Australia would not introduce a national identification card because of the fear of identity theft by criminals.

Mr Ruddock rejected media reports that the federal Government was considering introducing a national ID card. His comments come as the British government legislates to introduce the country's first national ID card since World War II.

Water desalination plant planned

New South Wales is in the worst drought in 100 years, and Warragamba Dam, which supplies 80% to Sydney, is down to 40% capacity. As Sydney's water supply approaches critical levels, the NSW government has planned for a $2 billion water desalination plant.

Premier Bob Carr's government has called for consortiums to express interest in developing and operating the project to supply up to 500 megalitres of desalinated water a day. Sydney Water is seeking submissions from organisations to deliver at least a 100 ML/day reverse osmosis desalination plant and ancillary work consisting of tunnels, ocean intakes and outlets, pumping stations and distribution infrastructure.

The Request for Expressions of Interest (EOI) package is available from Sydney Water's dedicated tender website: https://tenders.nsw.gov.au/sydneywater

Mr Howard has stated that the advice he received from experts was not to alter the medium level of alert that has been in place since the 12th of September 2001. Foreign Minister Alexander Downer said there was no reason to believe Australia was now more likely to be attacked.

NSW Premier Bob Carr said recently that Sydney had the technology and police coordination required to deal with a terrorist attack on Sydney, particularly on the busy rail system. Sydney's public transport system is on high alert and surveillance on the rail network has been stepped up, and security plans are in force on buses and ferries.