Australia Telecommunications Report Q3 2012

As two of Australia’s leading operators, Telstra and Vodafone Hutchinson Australia, release operational data on a half-yearly basis, we only have new data from Singapore Telecommunications’ Optus and data from the Australian Statistics Bureau for our Q312 report.

As a result, we have not altered our mobile subscriber forecasts, but new data has led to changes to our broadband market forecast.

At the end of Q112, we calculate that there were 29.891mn mobile subscribers in Australia, y-o-y growth of 5.1%.

Driving this growth are gains in subscriber numbers by Telstra and Optus.

Vodafone posted losses at the start of2012, and Q112 marks the operator’s fourth consecutive quarter of decline in subscriber numbers.

Market penetration stands at 131%.

New technologies are set to drive market growth in the short term, as following Telstra’s LTE launch in September 2011, Optus has joined the fray, launching LTE services in selected areas in April 2012, with plans to expand to major cities during 2012 and into 2013.

With 4G now a reality, both operators are also offering 4G-compatiable handsets and devices, and BMI expects that more will be launched during 2012.

In terms of network development, Optus and Vodafone signed a binding MOU in May 2012 to extend their network sharing agreement, and this will see both operators invest AUD400,000 (US$405,505) in up to 500 new shared base station sites over the next four years.

In terms of broadband, the government’s ambitious National Broadband Network (NBN) project was put back on track in February 2012 when the Australian Competition and Consumer Commission accepted Telstra’s structural separation undertaking.

In March 2012 the NBN Co released a new construction timetable to complete or begin laying fibre in areas comprising 3.5mn premises by June 2015.

This timetable will enable the network to reach areas with 1.8mn homes by the next federal election – as long as political turmoil does not reignite, leading to early elections, as the leader of the opposition Tony Abbott opposes the NBN.

There has been some M&A activity during the quarter.

In April 2012, M2 Telecommunications acquired Primus Telecommunications for AUD192.4mn (US$199mn); while Indonesia’s Telkom is allegedly bidding for cable operator Pacnet, which offers internet services in Australia.

These moves follow iiNet’s acquisition of Internode, in December 2011.

Our mobile subscriber forecasts remain unchanged: BMI calculates that there will be 33.8mn mobile subscribers in Australia by 2016.

We have raised our broadband subscriber forecasts, in the light of new data and now calculate that there will be 19.0mn broadband internet subscribers by 2016.

The roll-out of the NBN will have an important role to play in making this figure a reality.