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2007 Australia - Mobile Communications - Statistics, Trends and Forecasts


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

This report provides high-level strategic analysis and forecasts of the mobile communication markets, as well as profiles on the key players in that market. It identifies business opportunities, points out the hype and the pitfalls, and will be of assistance in making the right business decisions.

Market Analysis 2007;
Extensive statistical overviews of revenues and subscribers;
Overview of the major players in the mobile industry;
The 3G market - market overview, statistics, analyses, key developments;
The mobile retail market;
Prepaid mobile services market;
Trends and developments in substitution, capped prices and FMC;
Prepaid electronic payment services market;
Infrastructure overviews and statistical information;
Mobile satellite market;
Mobile handset market.


Mobile communications is still a huge telecommunications powerhouse. The premium prices that the industry can charge are generating an ongoing flood of revenue into the industry. Furthermore, large parts of the 2G infrastructure have been written off and the spectrum on which these services are built has also long been written off. No wonder the industry have been so to move to the next stage, where, like what happened in the fixed network, revenues will come from mobility applications. For more information, see chapter 1.1.1, page 1.

But 3G is now making serious progress with more than 4 million users, led by Telstra’s Next G network. However, in general they obviously still want to milk their 2G revenues for as long as possible. Let’s be honest - it doesn’t matter if a call is made on a 2G or a 3G network (or SMSs, for that matter), and these, combined, still account for well over 90% of mobile revenues. Data traffic both over the 2G and 3G networks is currently going thought the roof, fuelled by the capped price plans. For more information, see chapter 7, page 76.

Both in 2G and 3G the players remain the same: Telstra, Optus, Vodafone and Hutchison. Telstra is still leading the market, thanks to a very conservative strategy. They still have not introduced capped voice plans. Optus’ revenues have been severely affected by the competition of 2005/06. Vodafone and Hutchison have been leading the competition, but Vodafone remains a marginal operation and there is continued speculation about the future of the Australian operation. For a long time Hutchison has been the only 3G operator; however it is now facing increased competition and has lost its leading position to Telstra. Belatedly Optus is now rushing into 3G with an $800 million investment in a regional network. For more information, see chapters 1.3, page 5, chapter 1.4, page 12 and chapter 2.1, page 24.

The growth in prepaid has slowed down. The players are attempting to rein in the advance of too much competition, which around the world is manifested in large numbers of customers moving to prepaid services. The lack of a similar development in Australia indicates that the level of competition is maintained and controlled by the happy ‘quadropoly’. For more information, see chapter 3, page 42.

Key highlights:
Despite all the grandstanding on new data applications in 2008 the market will still be dominated by voice. Together with SMS that will account for well over 90% of all mobile revenues.
There are now more mobile subscribers than there are people in Australia, indicating that a significant proportion of the population has more than one mobile subscription.
Mobile revenues will grow to over $12 billion in 2008.
ARPUs have dropped again and are now around $46 per month. Telstra has the lowest ARPU, and Hutchison has the highest.
There are now more than 20 million mobile subscriptions.
Following a spurt in 2006 capped prices have not featured to any large degree in the competition scene, indicating a ‘controlled’ level of competition.
A million CDMA customers will have to be transferred over the next 12 months, the majority to Telstra’s Next G.
Growth in 3G is steady and is approaching 25% penetration.
The growth in prepaid has slowed down, indicating a stabilisation of competition in the market.
Mobile substitution remains low as mobile call charges remain relatively high.
Fixed Mobile Convergence (FMC) is not expected to occur to any significant extent until 2010-2012.
The handset market continues to be dominated by the operators and their bundled pricing strategies. Nokia remains the key supplier.
Margins for retailers are again under pressure and continue their downward spiral.
Data in this report is the latest available at the time of preparation and may not be for the current year.

1. THE MARKET IN 2007
1.1 Industry trends
1.1.1 The mobile market - in 2007
1.1.2 Less than 5% of users on 3G
1.1.3 Who wants to pay for mobile TV?
1.1.4 Telstra is simply transferring customers
1.1.5 Lack of corporate interest
1.1.6 Nothing will happen before 4G
1.1.7 Protecting the lucrative voice business
1.1.8 Municipality networks could undermine mobile
1.2 Analysis
1.2.1 Mobile industry heading up a dead-end street
1.3 Revenue overview
1.3.1 The market in 2007
1.3.2 Revenue statistics by operator and annual growth
1.3.3 Market shares by operator
1.3.4 Average Revenue per User (ARPU)
1.4 Subscriber statistics
1.4.1 Mobile subscriber overview
1.4.2 Business market
1.4.3 Residential market trends
1.4.4 Residential market surveys
2. MAJOR PLAYERS
2.1 Network operators
2.1.1 The initial analogue operators
2.1.2 2G operators
2.1.3 3G
2.2 SPs & resellers
2.2.1 Overview
2.2.2 Resellers on the Telstra network
2.2.3 Resellers on the Optus network
2.2.4 Resellers on the Vodafone network
2.3 MVNOs
2.3.1 Definition
2.3.2 Introduction
2.3.3 MVNO initiatives from Optus
2.3.4 dingo blue first to unbundle handsets (post mortem)
2.3.5 Virgin Mobile (post mortem)
2.3.6 Macquarie Telecom
2.3.7 CommodiTel
2.3.8 M2: Optus wholesaler
2.3.9 Analysis of MVNO developments
2.3.10 Retail operators
2.4 Retail market
2.4.1 The Industry in 2007
2.4.2 Overview of the dealer market - 2007
2.4.3 Retailer market analysis - update 2007
2.4.4 Key retail operators
2.4.5 Retail outlets carriers
3. PREPAID MARKET
3.1 Prepaid slowing down - 2007
3.2 Introduction
3.3 Developments and issues
3.3.1 Customer demand
3.3.2 Prepaid now well established
3.3.3 How competition changed the market (history)
3.3.4 Trends towards user-power
3.3.5 Prepaid Electronic Payment Services
3.3.6 Handset subsidies
3.3.7 Fast moving consumer goods
3.4 Market statistics
3.4.1 Overview
3.4.2 Market revenues
3.5 Business models
3.5.1 Card and PIN
3.6 Major players
3.6.1 Telecorp
4. ELECTRONIC PAYMENTS
4.1 Introduction
4.2 Market forecasts
4.2.1 Mobile prepaid
4.2.2 Calling cards
4.3 Market overview
4.3.1 Retail outlets
4.3.2 Card and PIN
4.4 Recharge models
4.4.1 Automatic Teller Machines (ATMs)
4.4.2 Electronic Funds Transfer Point of Sale (EFTPOS)
4.4.3 Integration onto POS PC screens
4.4.4 Telephone
4.5 Trends and developments
4.5.1 New electronic recharge cards
4.5.2 New markets
4.6 Revenue overview
4.7 Major players
4.7.1 e-pay Australia
4.7.2 Bill Express Limited
5. KEY DEVELOPMENTS IN THE MOBILE MARKET
5.1 Substitution
5.1.1 Introduction
5.1.2 Substitution starts to move
5.1.3 Forecasts
5.1.4 Fixed and mobile telephone is converging
5.2 Capped prices
5.2.1 Kick-starting competition
5.2.2 Vodafone pushing for growth
5.2.3 Optus fights back
5.2.4 Telstra
5.2.5 Market analysis - 2006
5.3 Fixed Mobile Conversion
5.3.1 Incentives to converge
5.3.2 FCT regulatory issues
5.3.3 Telstra corporate FMC trial
6. MOBILE INFRASTRUCTURE
6.1 Trends and developments
6.1.1 How many mobile networks is too many?
6.1.2 Mobile structural separation
6.1.3 Mobile phone infrastructure code improved by ACMA
6.1.4 Network sharing - an obvious step in the right direction
6.1.5 Sharing announcement 2
6.2 GSM infrastructure providers
6.2.1 Telstra MobileNet
6.2.2 Optus Mobile
6.2.3 Vodafone Australia
6.3 Other networks
6.3.1 Cocos (Keeling) Islands
6.3.2 Norfolk Island
6.3.3 Christmas Island
6.4 Code Division Multiple Access (CDMA) networks
6.4.1 Telstra
6.4.2 Hutchison - Orange
6.5 3G Infrastructure
6.6 Telstra Vehicle Access Network
6.7 IP Multimedia Subsystem (IMS)
6.7.1 Introduction
6.7.2 Partnership to promote IMS technology
6.7.3 Market Analysis
6.8 Mobile sites infrastructure
6.8.1 Overview
6.8.2 Crown Castle
6.8.3 Vertical Telecoms (Vertel)
6.8.4 Entire Network Solutions
6.8.5 Deployment of Radiocommunications Infrastructure Code
6.8.6 Court limits carrier’s powers and immunities
7. 3G MARKET
7.1 Market overview
7.1.1 The tough new world of 3G
7.1.2 Business modelling
7.2 Statistical overview
7.3 Market and industry analyses
7.3.1 WiMAX for 4G
7.3.2 Increased awareness of 3G - but ….
7.3.3 Discount war drives down 3G ARPU
7.3.4 3G mobile data
7.3.5 Analysis of Australia’s first 3G launch
7.4 Industry developments
7.4.1 3G auctions
8. SPECTRUM DEVELOPMENTS
8.1 New innovative spectrum direction
8.1.1 Introduction and analysis
8.1.2 Wireless explosion requires a rethink
8.1.3 ACMA’s innovative spectrum plans
8.1.4 Spectrum harmonisation
8.2 Follow up developments and analyses
8.2.1 Shame on you, wireless industry
8.2.2 Monopoly or shared national asset?
9. MOBILE SATELLITE SERVICES
9.1 Introduction
9.2 Subscriber statistics
9.3 Mobile Satellite Service Band Plan
9.4 Mobile satellite phone subsidies
9.4.1 Extension scheme from 2006
9.5 Telstra’s networks
9.5.1 Inmarsat and maritime communications
9.5.2 Iterra (VSATs)
9.5.3 Iridium Satellite LLC
9.6 MobileSat - Optus
9.7 Globalstar
9.8 QuikTrak
9.9 FedSat - Australia’s own LEO
9.10 Global positioning system
10. HANDSET MARKET
10.1 Handset market in mid-2007
10.2 Market overview
10.2.1 Trends in mobile handsets
10.2.2 Replacement market
10.3 Handset sales statistics
10.4 Handset costs
10.5 Key players in Australia
10.6 Market surveys
10.6.1 Mobile Phone Lifestyle Survey - 2006
10.6.2 Mobile handset survey - 2005
10.6.3 Mobile phones targeted by viruses
10.7 Market analysis - handset subsidies
10.7.1 Unsustainable handset subsidies
10.7.2 Several attempts to do away with subsidies
10.7.3 Reintroduction forced by competition (2003)
10.8 User demographics - 1998; 2000
11. GLOSSARY OF ABBREVIATIONS


List of Exhibits


Exhibit 1 - Mobile carriers and their key resellers
Exhibit 2 - Boost Tel
Exhibit 3 - MVNO models
Exhibit 4 - MVNO opportunities
Exhibit 5 - Crazy John’s billing problems
Exhibit 6 - Paul Budde’s case study from 2G to Next G
Exhibit 7 - Mobile Satellite Services
Exhibit 8 - Key customer considerations


List of Tables


Table 1 - Total mobile services market revenue and annual growth - 1993 - 2010*
Table 2 - Mobile services market revenue per major operator - 1993 - 2008*
Table 3 - Annual growth of mobile services market per major operator - 1994 - 2008*
Table 4 - Mobile services revenue market share per major operator - 1997 - 2008*
Table 5 - Average ARPU ($ per month) across all operators - 1993 - 2008
Table 6 - Blended ARPU ($ per month) by operator - 2003 - 2007
Table 7 - Blended ARPU by operator - annual growth - 2004 - 2007
Table 8 - Historical blended ARPU ($ per month) by operator - 1998 - 2002
Table 9 - Telstra prepaid, postpaid ARPU per month - 2004 - 2007
Table 10 - Telstra ARPU per month by network type - 2006 - 2007
Table 11 - Optus prepaid, postpaid and blended ARPU per month - 2004 - 2007
Table 12 - Vodafone prepaid, postpaid and blended ARPU per month - 2004 - 2007
Table 13 - Hutchison ARPU per month - 2004 - 2006
Table 14 - Hutchison 3G ARPU per month and annual change - December 2006
Table 15 - Hutchinson non-voice ARPU per month - 2004 - 2006
Table 16 - Mobile market subscribers, penetration and annual growth - 1986 - 2010**
Table 17 - Mobile subscribers by carrier - 1993 - 2008*
Table 18 - Mobile subscribers by 3G network operator - 2003 - 2008
Table 19 - Annual growth rate of mobile subscribers by carrier - 1993 - 2008*
Table 20 - Telstra - mobile subscribers by 2G/3G and annual change - 2006 - 2007
Table 21 - Telstra - mobile subscribers by prepaid/postpaid and annual change - 2006 - 2007
Table 22 - Telstra - wholesale subscribers by CDMA/GSM and annual change - 2006 - 2007
Table 23 - Mobile subscriber market share (%) by carrier - 1993 - 2008*
Table 24 - Revenue market share per market segment (corporate, SME, residential) - 1994 - 2007
Table 25 - GSM origination/termination revenue - 2001 - 2005
Table 26 - GSM origination/termination minutes of usage - 2001 - 2005
Table 27 - Distribution channels - 2006
Table 28 - Leading retailer outlets - 2006
Table 29 - Prepaid customers - 1998 - 2003
Table 30 - Market revenues prepaid - 1997 - 2007
Table 31 - Market share electronic payments of total prepaid - 2002 - 2009
Table 32 - Electronic payment market revenues - 2005
Table 33 - Electronic payment market revenues - 2007
Table 34 - Major electronic payment providers and their market share
Table 35 - Substitution forecasts - 2004 - 2010
Table 36 - Terrestrial mobile network coverage - 2002; 2006
Table 37 - Number of base stations by operator - 2007
Table 38 - Mobile subscribers by 3G network operator - 2003 - 2008
Table 39 - 2G, 3G ARPU per month comparison - 2006 - 2010
Table 40 - Mobile phone shipments - 2005 - 2007
Table 41 - 2006 Handset sales by technology
Table 42 - Average 2G mobile phone cost - 1986; 1993; 1998 - 2000; 2006
Table 43 - Mobile handset supplier market shares (digital) - 1999; 2001; 2003; 2005 - 2006
Table 44 - Mobile phones by family type - 1998; 2000
Table 45 - Mobile phones by household income - 1998; 2000
Table 46 - Mobile phones by state - 1998; 2000
Table 47 - Mobile phones metro versus regional - 1998; 2000

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