The Australian telecommunications equipment sector appears to have shown a marked improvement in international competitiveness since the mid-1980s. This paper analyses the causes of this growth in terms of responses to changes in the global— particularly the Asia-Pacific — market and market developments in Australia. This improved competitive position has resulted in organisational change within multinational firms based in Australia, with evidence of corporate specialisation, growing intra-industry trade and emerging strategic alliances which will link the local industry more closely with global developments.