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Australia - Broadband Market - Overview and Statistics

BuddeComm’s 2010 Australia Broadband Market - Overview and Statistics annual publication profiles key sectors in Australia’s wireline broadband market. It provides an overview as well as analysis of the National Broadband Network and an informative chapter on Trans-sector policies. This report also provides an analysis of both the copper and HFC based broadband infrastructure in Australia and includes an overview of the major network operators, wholesalers and retail service providers. The report also examines municipality networks as well as home networking. The statistical sections of this report provide historic data as well as forecasts relating to broadband usage, Internet service providers and the business and residential markets for broadband.

National Broadband NetworkAustralia is among the leading countries whose government is actively investigating the social and economic benefits that can be achieved through the deployment of a mainly fibre-based telecoms infrastructure. Services that depend on high quality broadband infrastructure include tele-health, e-education, e-business, digital media, e-government, smart meters etc. In countries where the national telco is lagging behind we see that local governments have no choice other than to take a leadership role, as they have done with similar infrastructure over the last 100 years.

In December 2009 the OECD published its report on these issues and indicated that governments could justify the costs of fast broadband by using them to cut cost in sectors such as healthcare, education, transport and energy. On average, a cost saving of between 0.5% and 1.5% in each of these four sectors over a ten year period could justify the cost of building the NBN.

Governments are now starting querying whether this basic infrastructure should not be financed in the same way as other infrastructure, by making it a national right paid for through consolidated revenue, government bonds or, as the OECD indicated, government savings.

The decision from the Australian government to launch a $43 billion national FttH broadband network is a clear indication that they believe broadband is essential infrastructure. It fulfils a national purpose as its trans-sector multiplier effect delivers massive social and economic benefits in healthcare, education, energy and the environment. A digital economy requires an open broadband infrastructure, and for that to work it can only be built by a utility (NBN Co). While there certainly are questions regarding the business model and the investment plan, there is widespread support for the visionary plan. During 2010 the business model needs to be developed, which will take into account the socio-economic benefits the infrastructure can deliver to the country.

Statistical Overview and ForecastBroadband statistics provided relate to the number of subscribers and market shares of major providers as well as additional data relating to DSL, cable and other broadband technologies. The total number of broadband subscribers crossed the 7.5 million mark in 2010, a 17% increase during 2009. Growth in recent years has been driven by further strong uptake of DSL subscribers, although recent growth has not as strong as the previous two years as the majority of the market has now made the transition from dial-up to broadband. In the longer term the development of a fibre optic network operated by a National Broadband operator is likely to have a significant impact on the take up of DSL or cable based services

Segmentation is provided by dial-up/broadband and include statistics on website usage. An overview of the ISP market, including number of ISPs and market trends is also included.

The business market has been quick to embrace broadband and by 2009 the vast majority of the business sector had made the transition. Further growth is continuing in 2010. As business users gradually move to faster broadband access via ADSL2+ and, when it’s built, services from the fibre-based NBN, they are increasingly embracing new broadband applications. This report provides a detailed overview of the key drivers and trends behind broadband adoption in the Australian business market. New data for 2010 has been included. A number of market surveys are also included across a wide range of topics including e-business, broadband usage, IT and consumer satisfaction, and the farming sector.

A range of topics are covered in relation to the usage of internet and broadband services in the residential sector. It also provides overall statistics of the residential telecoms market. It includes BuddeComm estimates of the market in 2010 and data from a number of market surveys covering consumer usage and behavioural patterns, as well as internet and broadband usage statistics. It provides an analysis of the drivers behind internet adoption among Australian households. Surveys covered include a statistical overview from the ABS regarding computer and internet usage among Australian households, which includes a breakdown analysis of residential computer and internet usage by a wide range of criteria. The figures used here are the latest available but some statistics are not due for update until late 2010 or 2011.

Though there are roughly 200 ISPs in Australia the retail broadband market is dominated in Australia by a small number of firms. Telstra provides nearly 45% of services and has roughly four times as many retail subscribers as the second largest player Optus with around 11% of the market. iiNet and TPG and Primus are other major players and each has around a 5% share. The remaining 30% of the market is shared between around 180 small and medium sized providers. Consolidation in the retail ISP market has occurred with a number of mergers in the last two years. The most notable of these deals was between iiNet and Westnet and between TPG, Soul and Chariot Internet. Of critical importance to ISPs is whether to further invest in DSLAM infrastructure as the fibre optic based national broadband network is built. Further investment will enable ISPs to directly connect subscribers to their network rather than relying on purchasing wholesale services. However in the longer term the NBN may render this investment obsolete as subscribers are migrated to the fibre network.

While the resale of DSL based services using Telstra’s Unbundled Local Loop service was economically unviable for voice services, it did enable platform based competition to provide broadband services. Many firms have installed their own DSLAM infrastructure enabling them to provide fairly high speed Internet services via ADSL2+. This regulatory framework related to ULL has encouraged investment and the number of broadband users with access to services has increased. However a key concern moving forward is the impact on investment in DSLAM infrastructure may become obsolete once Fibre to the Premises networks are built. The Governments proposal to build a National Broadband Network may invoke changes in the regulatory environment relating to DSL based broadband services. As such the existing regulatory regime will need to be balanced against the emerging regime relating to the fibre network.

HFC cable networksHybrid Fibre Coax networks are communications networks that use a combination of optical fibres and coaxial cable. HFC networks support voice, data, and TV services. Network operators are upgrading their networks to stay competitive in the broadband market by offering very high bandwidth data services. There are two HFC network operators in Australia, Telstra and Optus, both serving customers in the large major metropolitan centres.

The phasing out of dial-up internet connections in Australia has continued with nearly 90% of internet connections now being non-dial-up. At the end of 2009 there were 935,000 cable broadband subscribers, a penetration rate of around 15% of the total broadband market in Australia. Telstra has indicated it will seek to expand the number of services it provides over its HFC network to compete with fibre-based services provided on a wholesale basis by a NBN operator. At the end of 2009 Telstra launched very high-speed internet services in Melbourne. However, if the price of fibre-based services provided by the NBN operator is attractive to Telstra relative to the cost of servicing subscribers through an upgraded HFC network, then we may see Telstra abandon a strategy to upgrade the HFC in other major centres.

Greenfield FttHAustralia is seeing a dramatic rise in the number of FttH operators. The deployment of FttH in greenfield estates is a dramatically growing industry; but while the design of a fibre solution can be seen as a rather simple task, having it designed correctly and then operated effectively and with long term success is quite a different matter. Currently in Australia and New Zealand there are fifteen different FttH operators with various levels of experience and capability. In March 2010 new legislation was introduced in Parliament that will see all new housing sites to be either be supplied with FttH networks or being made ready (pit and pipe) for easy deployment of that infrastructure.

1. High Level Overview
1.1 Introduction: broadband doesn’t just equal high-speed Internet
1.2 The many aspects of broadband infrastructure
1.2.1 Broadband equals healthcare infrastructure
1.2.2 Broadband equals utility infrastructure
1.2.3 Broadband equals education infrastructure
1.2.4 Broadband equals media and e-business infrastructure
1.2.5 Broadband equals smart cities
1.3 Trans-sectoral thinking required for governments
1.4 BuddeComm’s contribution to broadband based trans-sector policies
1.4.1 The birth of trans-sector concept
1.4.2 Australia: first country to develop trans-sector policies
1.4.3 Smart grid and NBN first trans-sector project
1.4.4 Support from Obama and the FCC
1.4.5 Trans-sector innovations in the Netherlands and New Zealand
1.4.6 United Nations puts its weight behind trans-sector
1.4.7 BuddeComm proud of playing its part
1.5 Barriers to NBN and broadband adoption
1.5.1 Broken regulatory systems and the new broadband environment
1.5.2 Broadband progress or death by pilot projects?
1.5.3 Barriers unique and numerous
1.6 Conclusion
2. Fast Broadband and Trans-Sector Policies
2.1 Introduction
2.2 The BuddeComm Trans-sector mission
2.3 Economic and social multiplier effects
2.4 Why did we get it so wrong in the first place?
2.5 Differences between fast broadband approaches
2.6 Trans-sector requires intelligent approach towards measurement
2.7 Massive increase in efficiency, productivity and customer satisfaction
2.8 Privacy is paramount
3. National Broadband Network
3.1 Details of the government’s proposal
3.2 Implementation issues
3.2.1 Fundamental change to the economy
3.2.2 People issues
3.2.3 Business modelling - the key to success of the NBN
3.2.4 Recommendations Implementation Study
3.3 Socio-economic benefits
3.4 Regional broadband
3.4.1 Why we started the NBN in the first place
3.4.2 Where are our regional politicians?
3.4.3 Action plan
3.5 Where is the user in all of this?
3.6 Analyses of developments during 2009 and 2010
3.6.1 Coordination of the various NBN segments (May 2010)
3.6.2 R&D missing out on NBN benefits (February 2010)
3.6.3 NBN passed through Parliament (October)
3.6.4 Business getting in charge of the Australian NBN (August)
3.6.5 NBN is moving in the right direction (July)
3.7 Opposition broadband policies
3.7.1 First glimpse of policies
3.7.2 Analysis of the Australian Opposition’s broadband policies
4. Statistical Overview Broadband Market
4.1 Market statistics
4.1.1 Overall size of the market
4.1.2 Access revenues
4.1.3 The Internet market moving into 2010
4.1.4 ISP market overview
4.1.5 Market segment forecasts - 2005 - 2015
4.1.6 Benchmarking with other countries
4.1.7 Historical overviews ABS
4.2 Business market
4.2.1 Market trends
4.2.2 Customer expenditure on telecoms
4.2.3 Business market surveys
4.3 Residential market
4.3.1 Residential market total telecoms
4.3.2 Internet household statistics
4.3.3 Regional statistics
4.3.4 Trends in the residential market
4.3.5 Household use of technology
4.3.6 Other residential market surveys
4.4 DSL market
4.4.1 Background
4.4.2 Overview of the National Broadband Network (NBN)
4.4.3 Regulatory environment - analysis
4.4.4 DSL infrastructure
4.4.5 Major service provider profiles
5. HFC Cable Networks
5.1 Technology
5.1.1 Hybrid Fibre Coax (HFC)
5.1.2 The DOCSIS standard
5.2 Market statistics and forecasts
5.3 Telstra
5.3.1 Overview
5.3.2 DOCSIS 3.0 rollout
5.4 Optus
5.4.1 Overview
5.5 Industry analyses
5.5.1 Telstra’s DOCSIS 3.0 broadband rollout
5.5.2 No long-term future in HFC cable broadband
5.5.3 From HFC to FttH
5.6 Cable modems versus xDSL
6. Home Area Networks
6.1 Home area networks defined
6.2 Internal network connectivity
6.2.1 Wireless homes
6.2.2 Broadband over home electrical cabling
6.3 Network devices
6.3.1 Home media centres
6.3.2 Interfacing with home networks
6.3.3 Home automation devices
6.3.4 Broadband-enabled connected homes
6.4 Analysis
6.4.1 Steady growth ahead
6.5 Surveys
6.5.1 The connected home
6.5.2 Smart wired house standard developed
7. FttH
7.1 FttH greenfield market
7.1.1 Fibre Deployment Bill 2010
7.1.2 Statistics on fibre-enabled communities
7.1.3 Network operators
7.1.4 Retailers
8. Glossary of Abbreviations
List of Tables
Table 1 - Total broadband subscribers and annual change - 1996 - 2011
Table 2 - Broadband subscribers - total market - 2003 - 2010
Table 3 - Broadband annual market - annual growth - 2004 - 2010
Table 4 - Broadband subscribers - market shares (cable, ADSL, wireless totals) - 2004 - 2010
Table 5 - Broadband access revenues by major provider - 2005 - 2011
Table 6 - Annual change in broadband access revenues by major provider - 2006 - 2011
Table 7 - Market share of broadband access revenues by major provider - 2005 - 2011
Table 8 - Total fixed wireless broadband monthly ARPU - 2005 - 2009
Table 9 - Business, government and household Internet subscribers - 2007 - 2009
Table 10 - Internet subscribers by access technology - 2008 - 2009
Table 11 - Broadband market share by technology and annual change - 2008 - 2009
Table 12 - Data downloaded by access technology - 2008 - 2009
Table 13 - Internet subscribers by download speed - 2007 - 2009
Table 14 - Business, government and household Internet subscribers - 2006 - 2009
Table 15 - Proportion of ISPs by size in the Australian market - 2008 - 2009
Table 16 - Number of ISPs - 1995 - 2012
Table 17 - Number of ISPs by technology
Table 18 - Overview total telecoms/Internet market - 2015
Table 19 - Broadband revenues - 2005; 2010; 2015
Table 20 - Broadband market share by technology - 2005; 2010; 2015
Table 21 - Fixed broadband access among Internet households - selected countries - 2004 - 2010
Table 22 - Market penetration of households with broadband access as a percentage of all households - Australia and selected countries - 2009
Table 23 - Households with access to a home computer and the Internet - Australia and selected countries - 2009
Table 24 - Selected country comparison of monthly at-home Internet usage - 2007; 2009
Table 25 - Telco product mix of customer spend - 2010
Table 26 - Business and government market spending - 2010
Table 27 - Providers’ market share - 2010
Table 28 - SME computer equipment ownership trends - 1999 - 2009
Table 29 - SME computer software and hardware expenditure and annual change - 2006 - 2009
Table 30 - Business trends in internet connections - 1995 - 2009
Table 31 - How SMEs access the internet - 2009
Table 32 - Summary of current and expected uses of the internet by SMEs - 2009
Table 33 - Security methods utilised for remote access to networks - 2008 - 2009
Table 34 - Devices used to connect to networks - 2008 - 2009
Table 35 - Employees’ work locations - home, workplace or off site - 2008 - 2010
Table 36 - Changes in usage of non-voice applications on 3G handsets - 2010
Table 37 - Plans for convergence of data and voice networks - 2005; 2008 - 2009
Table 38 - Telco product mix of customer spend - 2010
Table 39 - Revenue mix - residential market - 2010
Table 40 - Service providers’ market share - 2010
Table 41 - Total households with home internet access - 2001 - 2009
Table 42 - Broadband component of internet households - 2005 - 2010; 2015
Table 43 - Internet access households with children - 2001 - 2009
Table 44 - Internet access by region - 2001 - 2009
Table 45 - Internet uptake by metropolitan/non-metropolitan area - 2007
Table 46 - Top 10 internet applications performed over four weeks - 2008
Table 47 - Top 10 internet activities - broadband versus dial-up - 2008
Table 48 - Weekly hours of internet usage by user type - 2006 - 2008
Table 49 - Frequency of internet use by age - 2008
Table 50 - Growth in residential and business data usage - 2008 - 2009
Table 51 - Dial-up and non-dial-up internet subscribers - 2003 - 2009
Table 52 - Computerisation in the home - 2009
Table 53 - Number of infrastructure providers by number of ADSL-enabled exchanges - 2008; 2010
Table 54 - Number of DSLAMs by provider - 2006 - 2010
Table 55 - Number of ADSL and ADSL2+-enabled exchanges - January 2010
Table 56 - Broadband DSL retail subscribers by major provider - 2004 - 2010
Table 57 - ADSL2+ subscribers by provider - 2006 - 2009
Table 58 - Telstra DSL statistical overview - 2008 - 2009
Table 59 - Optus DSL statistical overview - 2008 - 2009
Table 60 - iiNet DSL statistical overview - 2008 - 2009
Table 61 - TPG DSL statistical overview - 2008 - 2009
Table 62 - Powertel/AAPT DSL statistical overview - 2008 - 2009
Table 63 - Primus DSL statistical overview - 2008 - 2009
Table 64 - Internode DSL statistical overview - 2008 - 2009
Table 65 - Cable broadband subscribers by operator and annual change - 2002 - 2010
Table 66 - Home network penetration of households - 2005; 2007; 2008-2010; 2015
Table 67 - Homes connected to fibre - 2005 - 2010
Table 68 - Percentage breakdown of FttH communities by provider - 2010
Table 69 - FttH communities in Australia and New Zealand by provider - 2010
Exhibit 1 - Key developments in FttH and Trans-sector strategies
Exhibit 2 - Advice for digital economy builders
Exhibit 3 - HFC network status
Exhibit 4 - Summary of FttH network operators

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