This report provides high-level overviews and strategic analyses of the developments in fixed broadband within Australia. It identifies business opportunities, points out the hype and the pitfalls, and it will be of assistance in making the right business decisions. The subjects covered in the report include:
The Market in 2007
Government plans and policies
Consumer and business market
Infrastructure, technologies and applications - overviews and statistics
Network operators and major wholesale operators
Despite the ‘Mexican Standoff’ between the government and Telstra on the issue of a regulatory holiday for new broadband infrastructure, broadband penetration is proceeding at high speed in Australia. By mid-2007 there were close to 4.5 million subscribers. In the residential market this means a broadband penetration of close to 64% in Internet households (46% of total households). In the business market this figure is over 80%.
For more information, see chapter 5.1.1, page 49.
While the penetration of broadband in Australia is catching up with its trading partners it is still lagging behind in the quality of broadband provided by the operators, and in the price customers have to pay. The majority of customers are still on services that provide only 256Kb/s or 512Kb/s. Telstra, however, does make an 8Mb/s available, but this is not a guaranteed speed, only a best-effort service. For more information, see chapter 1, page 1.
Telstra’s competitors are leading the market in the higher speed ADSL2+ services market. The regulator has finally been able to force better unbundled local loop and spectrum-sharing wholesale services into the market, and affordable true-broadband services are now available. Telstra is only making ADSL2+ available in those exchanges where its competitors have installed their own DSLAMs, so it is being a follower rather than a leader in new and innovative broadband services, a fact that is hampering a more rapid deployment of this superior infrastructure.
For more information, see chapter 6.2, page 66.
Back in 2005 Telstra announced an FttN infrastructure upgrade, but it requested a regulatory holiday - preventing others from utilising the network on a basis equivalent to Telstra Retail. This was not sanctioned and Telstra has subsequently threatened not to roll out FttN. However, the reality is that the company can’t afford not to move into this market. An Optus-led consortium, G9, has proposed an alternative FttN plan, with consumer access prices significantly lower than the prices that, according to rumours, the incumbent would like to charge.
Broadband infrastructure is essential for the social and economic development of the country and both the current Government and the Opposition have broadband policies in place, aimed at ensuring that regional and other fringe areas will receive services that are equivalent to those available in the more economically viable metropolitan areas of the country.
For more information, see chapter 8, page 93.
However, before any further plans are developed the government will have to establish the right regulatory environment. It would be foolish to allow for the overbuilding of infrastructure; a far better option would be to ensure the sharing of infrastructure.
For this to happen the government will need to act upon its operational separation legislation, which was passed in Parliament back in 2005. Only when this is sorted out can responsible investment decisions be made and responsible government funding be put in place. As we have seen in other countries, this will enable more companies to enter the facilities-based market (even in regional markets) in addition to entering the services market.
There are now close to 4.5 million broadband users in Australia, growing to 6 million over the next 2 years.
More than 75% are still on low-speed broadband (under 1Mb/s).
Broadband prices for high-speed broadband are higher than in comparable countries.
Most business are now connected via broadband.
Progress is slow in ADSL2+ (24Mb/s speeds) as Telstra is not an active player in this market.
Independent service providers have installed over 2,500 DSLAMs.
Telstra has launched a cable modem upgrade, offering higher speeds over this network.
Broadband is essential infrastructure for e-health, education and smart energy meter deployments.
These sectors can each save costs between 10% and 20% by deploying their services over true-broadband infrastructure.
Infrastructure upgrades will be evolutionary rather than revolutionary. From ADSL to ADSL2+ to VDSL to FttN, and eventually FttH. This process takes 7 to 15 years.
This report provides high-level overviews and strategic analyses of the developments in fixed broadband. It identifies business opportunities, points out the hype and the pitfalls, and it will be of assistance in making the right business decisions. Further information provided includes:
Statistical overviews on subscribers, revenues, market shares, international rankings.
Competitive information on the market, the industry and the players.
How the market should operate in order to increase investments, maximize the value of the infrastructure and open up new revenue streams.
Insight into the market and the industry: ADSL, ADSL2+, DSLAMs, cable modems.
Unraveling of the infrastructure debate and an indication of what is really needed, and when.
Analyses of the Government and Opposition plans and policies - the government’s role needs to change significantly, especially in relation to the provision of regional infrastructure.
Market surveys and statistical overview of the business and residential markets - assisting customers to make their own assessments for their own organizations.
Overview of the real innovators in this market and what are they offering.
Data in this report is the latest available at the time of preparation and may not be for the current year.
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