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Australia - Mobile Broadband Market

Attention: There is an updated edition available for this report.

This annual publication provides the reader with a through overview of the mobile broadband, mobile data market and the mobile media market in Australia in 2010. The publication provides important analysis of the market and trends in usage, revenue, mobile Internet content and prospects for the various mobile network operators. 

Topics covered include:

  • Mobile broadband - statistical overview;
  • Mobile data - forecasts, market issues, m-commerce and m-payments;
  • Mobile media - statistics, providers, apps, portals and mobile TV;
  • Prepaid payment market
  • - major players,
  • and revenue statistics.

Mobile data and mobile broadbandMobile data usage in Australia is increasingly driven by handset developments, most notably the introduction of web-centric mobile handsets such as the Apple iPhone and BlackBerry. Mobile Apps stores which provide a market place for developers to independently market their mobile web services are likely to gain further in popularity over years to come. However in the short-term growth in the mobile data market may be hampered by persistently high charges that some operators levy for transmitting application data. Operators are reluctant to lower prices as that could lead a surge in usage and to network congestion requiring additional investment.

For 2010, BuddeComm predicts that the total mobile broadband market will be generating $2.4 billion worth of revenues, the vast majority of which will be accounted for by 3G mobile broadband revenues. Last year growth continued across a range of platforms and technologies with the use of 3G mobile and wireless broadband services growing by 162%.

The 3G mobile broadband market has hit the decade running. Over the past year Australians continued their appetite to adopt new communication and media services and adapted their usage patterns to meet their specific lifestyle needs. Services such as 3G, VoIP and wireless broadband internet are being increasingly used, with factors such as lifestyle, age and family type shaping these choices.

However, the fixed wireless market is showing only modest growth - operators like Unwired and BigAir are currently using pre-WiMAX proprietary wireless broadband technology, and have been patiently waiting for a decade to make the transition to WiMAX technology. But constant delays have postponed the launch and it appears that WiMAX has bitten the dust leaving operators to develop in niche markets only. By 2018 only 10% of mobile revenues will come from mobile voice; furthermore, that will be based on VoIP.

In this annual publication we provide information on the companies and the services they offer in relation to mobile content. We cover both the activities of the mobile operators and those of the service providers. Companies included are Telstra BigPond Mobile, Optus Zoo, Vodafone Live, Hutchison 3, MessageNet, Be.interactive, Red Oxygen, Oxygen8 Communications, Jamster, Jumbuck, MobileActive and Mnet. Other players in the market such including Sybase 365, Netsize Group, mBlox, iTouch, Mobile Messenger, 5th Finger, SMS Central and Communicator are also covered.

This mainly portal’s based market has remained rather static over the last few years, with more and more activities moving ‘off deck’ to Apps stores. The major mobile media providers therefore are now the digital media providers on the Internet who have established access to their services for mobile devices.

With social networking booming, and consumers increasingly sharing images and videos, having a broadband connection with fast upload speeds is becoming critically important. According to Ericsson, global mobile broadband use in the next five years is expected to reach the same level of penetration as that of second-generation mobile phones which have been providing voice and text messaging today.

All the major operators are currently rolling out networks based on the High-Speed Packet Access standard. These companies are expected to provide even faster mobile data speeds from around late 2010 or early 2011 based on another related standard, Long-term evolution which will support services featuring data rates of at least tens of Mb/s per user. In this annual publication we provide information and analysis of the major HSPA networks in Australia and consider the prospects for operators as they move towards deploying LTE.

M-Commerce and M-MediaRelative to Asian markets, especially in Japan and South Korea, Australia has a small m-commerce industry. The key elements of effective mobile commerce are mobile payments and mobile advertising. Current developments are critical for the development of a larger m-commerce market. No widely adopted standard for mobile payments has been developed in Australia to date.

There are several key issues impacting on the development of m-commerce in Australia. Typically these are issues related to the customer’s experience of m-commerce services and technical issues relating to the telephony infrastructure. In this annual publication we supply information and analysis of developments relating to m-commerce in Australia with a focus on m-banking, m-payments and mobile advertising.

Premium Rate SMS services have developed into a $200 million+ market. However, this is a far cry from the predictions made in the late 1990s, which anticipated a multibillion-dollar market. Despite a decade of mobile data hype, the access charges to PSMS remain far too high and in 2009/10 the market started to contract.

With the advent of capped mobile services and new smart phones such as the iPhone, we now see users moving to the Internet to access a far wider variety of Apps-based mobile content and communication services. In the PSMS market the mobile operators maintain an iron grip through their m-payment facilities.

While SMS revenues continue to contribute far more with respect to overall mobile data revenue than any other data services over the next two years it is expected to reach a peak in its current form then decline as other services come on board. While currently the majority of SMS revenue is earned from messages sent between subscribers. Premium SMS, where messages are sent between content providers and subscribers, is also an important component of SMS revenue.

While there has been much hype surrounding mobile TV in Australia, the concept developed by the mobile operators has so far well and truly failed with operators given a wakeup call with the introduction of the iPhone which began to separate content from carriage. Suddenly all kinds of applications (Apps), including video-based, became available independently of the mobile operators. From now on new developments will revolve around the devices and their apps, rather than the mobile operators.

Market highlights

HSPA and LTE also enable network operators to move towards an all IP network environment which may reduce network complexity and lower operating costs.

Declines in the price of mobile data are likely to stimulate growth in 2010/11. Growth in usage may come at the expense of revenue growth as margins are lowered due to competitive pressures.

Mobile web browsing, however, has grown exponentially over the past year, with a large share of that activity on the back of the rapid growth of smartphones such as the iPhone and BlackBerry devices. The huge success of these devices has given rise to the continued lift in new-application growth over the second half of 2009 and growth will continue to do so through 2010/11 as new handsets are released by various mobile device manufacturers.

SMS and PSMS revenues are expected to decline sharply in the face of cannibalisation from other products such as mobile email and, in the case of PSMS mobile Internet based services. SMS margins are likely to be significantly higher than those mobile operators earn from mobile data services.

Prepaid telecommunications products make up a significant proportion of total telecommunication revenues. In 2010 the total revenue from electronic payment systems in Australia is estimated at around $3.8 billion. Prepaid mobile voice services are the largest revenue segment, followed by calling cards, prepaid mobile Internet access, music purchases and gift cards, as well as PSMS services. The market is rapidly developing and the arrival of rechargeable magnetic cards is a major new development. The market in Australia is dominated by epay with the major banks and mobile operators commanding smaller shares. Significantly Australian mobile operators expect to further increase revenue earned from sales for prepaid mobile Internet access in 2010. Another growth market is the emerging prepaid electronic transport ticketing services.Data in this report is the latest available at the time of preparation and may not be for the current year.

1. Market Overview and Analysis
1.1 Introduction - mobile broadband in Australia
1.1.1 Analysis of the market
1.1.2 Infrastructure competition in 2010
1.2 Key trends and developments
1.2.1 Mobile data usage driven by devices
1.2.2 Mobile application stores
1.2.3 Apple and Google
1.2.4 Targeted advertising
1.2.5 3.5 Mobile data prices
1.3 Market forecasts
1.3.1 Service evolution
1.3.2 How to move forward?
1.3.3 Unique business opportunities
2. Statistical Overview of the Market
2.1 Market overview and analysis
2.1.1 Analysis of the market - mid-2010
2.1.2 Applications drive the market
2.1.3 Mobile broadband revolution set to change the industry
2.1.4 Hardware drives applications
2.1.5 User prices still too high
2.2 Australia - mobile media - PSMS portals and apps
2.2.1 Telstra losing the mobile lead
2.3 Wireless broadband market statistics
2.3.1 Mobile broadband subscribers
2.3.2 Mobile broadband revenues
2.3.3 Mobile data market
2.3.4 Fixed wireless broadband market in limbo
2.4 Forecasts and other developments
2.4.1 Fixed - mobile call market
2.4.2 Predicted value between $10 and $15 billion
2.4.3 Revenue forecasts
3. Moving towards 4G: HSPA & LTE
3.1 High-speed mobile networks
3.1.1 High-Speed Packet Access (HSPA)
3.1.2 Long-term evolution (LTE)
3.2 Australian mobile broadband operators
3.2.1 Telstra
3.2.2 Hutchison
3.2.3 Vodafone
3.2.4 Optus
3.3 Mobile data market
3.3.1 Overview and analysis
3.3.2 3G HSDPA steaming ahead
3.3.3 Mobile industry calls for spectrum certainty
3.3.4 Neutral broadband connections for HSDPA
3.4 Mobile broadband applications
4. Mobile Media
4.1 Surveys and statistics
4.1.1 Introduction
4.1.2 The Australian Interactive Media Industry Association (AIMIA) Mobile Traffic Trends Report
4.1.3 AIMIA - Australian Mobile Phone Lifestyle Index
4.1.4 m-Net Corporation - mobile data services study
4.1.5 International Data Corporation (IDC) - mobile broadband competitive analysis
4.1.6 Mobile Internet bigger than desktop Internet
4.1.7 Revenue statistics
4.2 Mobile media providers
4.2.1 Mobile operators
4.2.2 Service providers
5. PSMS Portals and Apps
5.1 The market in 2010
5.1.1 The restrictions of Premium SMS (PSMS) portals
5.1.2 The demise of the carrier’s portal market
5.1.3 M-payments last straw for portal market
5.1.4 Portal-based business models are flawed
5.2 Smart phone apps market
5.3 Subscription-based content services
5.3.1 Introduction
5.3.2 Double ‘opt-in’ industry code
5.3.3 M-payment monopoly
5.3.4 Mobile operators become the regulators
5.3.5 Conflicts of interest
5.4 Consumer protections for PSMS
5.5 Key players in the PSMS market
5.5.1 International players
5.5.2 National players
5.6 PSMS revenues
5.6.1 Market projections - 2010
6. Mobile TV
6.1 Mobile TV is dead - long live mobile video
6.2 What is mobile TV?
6.3 Market overview and analysis
6.3.1 Smartphone market analysis
6.3.2 Pursuing wrong business models
6.3.3 Device and content driven developments
6.3.4 Key market - the youth segments
6.4 Major players
6.4.1 Overview
6.4.2 Hutchison’s 3
6.4.3 Telstra’s BigPond mobile TV
6.4.4 Optus
6.4.5 myTVR launches new mobile TV service
6.5 Regulation
6.5.1 Spectrum for mobile broadcasting
6.6 Technology platforms
6.6.1 Multimedia Broadcast/Multicast Service (MBMS)
6.6.2 Digital Video Broadcasting-Handheld (DVB-H)
7. SMS - Overview & Statistics
7.1 Introduction
7.2 SMS market overview
7.2.1 Operators
7.2.2 Forecasts and analysis
7.2.3 High-Speed Packet Access (HSPA) threat to SMS
7.2.4 SMS regulation
7.2.5 The youth market
7.3 SMS services in Australia
7.3.1 SMS betting
7.3.2 SMS service for people with disabilities
7.3.3 SMS advertising
7.3.4 Business SMS
7.4 Usage statistics
8. M-Commerce and M-Payment
8.1 Mobile Internet platform for mobile commerce (m-commerce)
8.2 Overview and analysis of m-commerce in Australia
8.2.1 Market still waiting for a breakthrough
8.2.2 Issues impacting development of m-commerce in Australia
8.3 M-Commerce applications
8.3.1 Introduction
8.3.2 Mobile payments apps
8.3.3 Content purchase and delivery
8.3.4 Mobile banking and brokerage
8.3.5 Auctions
8.3.6 Mobile purchase
8.3.7 Mobile marketing
8.3.8 Mobile vouchers, coupons and loyalty cards
8.4 M-payment
8.4.1 Introduction
8.4.2 Off-deck services need m-payments
8.4.3 Developments in Australia
8.4.4 Closed systems
8.5 M-payment projects and services
8.5.1 mHITs
8.5.2 Optus/BlackBerry
8.5.3 Visa’s PayWave service for the National Australia Bank (NAB)
8.5.4 MasterCard PayPass
8.5.5 Near Field Communications
8.6 Mobile banking (m-banking)
8.6.1 M-banking overview
8.6.2 ANZ Bank
8.6.3 Commonwealth Bank
8.6.4 NAB
8.6.5 Westpac
8.7 Mobile advertising and marketing
8.7.1 Background
8.7.2 Local advertising
8.7.3 Analysis of mobile marketing in Australia
8.8 Other m-commerce developments
8.8.1 Barcode readers on mobile phones
8.8.2 Smart quick response (QR) codes
8.8.3 SMS m-commerce
9. Prepaid Payment Market
9.1 Introduction
9.2 Major players in Australia
9.2.1 Overview and statistics
9.2.2 epay Australia
9.2.3 Web-based service providers
9.3 Retail outlets
9.4 Revenue overview
9.5 Market developments update 2010
9.6 E-payment charging models
9.6.1 Card and PIN (scratch cards)
9.6.2 PIN-based systems
9.6.3 Rechargeable calling-cards (swipe cards)
9.6.4 Other recharge models
9.7 Prepaid open to misuse
9.8 New markets
9.8.1 Electronic gift cards (open loop cards)
10. Glossary of Abbreviations
List of Tables and Exhibits
Table 1 - Wireless broadband subscribers by access type and annual change - 2007 - 2011
Table 2 - 3G mobile broadband subscribers by mobile operator - 2007 - 2011
Table 3 - Total fixed mobile broadband revenues and annual change - 2007 - 2011
Table 4 - Mobile broadband monthly Average Revenue per User (ARPU) - 2007 - 2011
Table 5 - Mobile data revenues by operator - 2008 - 2009
Table 6 - Fixed wireless broadband subscribers by operator - 2007 - 2009
Table 7 - Forecast mobile broadband and voice revenues - 2008; 2013; 2018
Table 8 - Mobile traffic growth, selected major Australian mobile Internet sites - 2008 - 2009
Table 9 - Telstra average data revenue per user per month - 2005 - 2010
Table 10 - Blended mobile data ARPU per customer by operator - 2009
Table 11 - Estimated mobile data revenue by operator - 2009 - 2010
Table 12 - Estimated total mobile data revenue - 2009 - 2012
Table 13 - Australian apps market revenue estimates - 2009 - 2015
Table 14 - Estimated revenues - PSMS market - 2004 - 2010
Table 15 - PSMS estimated market share by operator - 2009
Table 16 - SMS sent messaging forecasts - 2003 - 2012
Table 17 - Telstra SMS sent per annum - 2005 - 2009
Table 18 - Estimated market share - electronic mobile payments of total prepaid - 2002 - 2010
Table 19 - Major electronic payment providers and estimated market share - 2010
Table 20 - Estimated electronic payment market revenues - 2007 - 2011
Table 21 - Estimated breakdown of prepaid electronic payment market revenues - 2009
Exhibit 1 - Key issues for mobility industry
Exhibit 2 - Be.interactive clients and partners
Exhibit 3 - Be.interactive mobile services
Exhibit 4 - From Legion Interactive to Be.interactive
Exhibit 5 - Key national and major smaller players in the PSMS market
Exhibit 6 - Revenue mix PSMS
Exhibit 7 - Broadcast Australia DVB-H trials - 2005 - 2009

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