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2008 Australia - Mobile Communications Statistics, Trends and Forecasts

Market trends
Telstra’s Next G network is certainly one of the global mobile success stories. Not only has its rapid rollout been incredible, but also the way that it has serviced the market has been very successful. The market has also allowed Telstra to charge a premium price for its service, similar to, for example, the premium Hutchison was able to change when it was the first to launch a 3G service.

Telstra also caught Optus on the back foot. This company relies for the majority of its revenue on mobile and Telstra is now able to seriously undermining Optus’ position in this market. Vodafone is remaining in the position that it basically has had for the last 15 years. It has been unable to catch up with the big two, but at the same time has often proven to be a leader in innovative new products and pricing packages.

In a market that has already reached saturation, and where mobile call charges are declining, operators’ revenue growth will continue to taper off in 2009 and 2010; however, the revenue growth rate will remain well above the subscriber growth rate, largely due to increased revenue streams that the mobile operators are getting from 3G mobile data/mobile broadband.

Moving forward into 2009 and 2010, BuddeComm predicts that a trend slightly increasing ARPUs will continue, as the trend of increasing mobile data/3G revenues will continue to just outweigh the declining voice ARPUs due to falling mobile call pricing. The momentum gained by Telstra in 2007/08 of increasing ARPUs and market share is expected to continue into 2008/09, and this will place a lot of pressure on the rest of the market, in particular Optus, which in 2008 performed the worst of the four major mobile operators. For more information on market trends, see chapter 2, page 7.

Australian mobile market subscribers and annual growth - 2004 - 2011
Year ends Jun Subscribers (000s) Annual growth

  • 2004 16,411 14.9%
  • 2005 18,072 10.1%
  • 2006 19,445 7.6%
  • 2007 20,800 7.0%
  • 2008 22,123 6.4%
  • 2009 (e) 23,135 4.6%
  • 2010 (e) 23,714 2.5%
  • 2011 (e) 24,188 2.0%
(Source: BuddeComm)
Note: Double counting, due to subscribers having more than one mobile subscription, raises the true penetration levels by around 10-15% above the estimates quoted.

Mobile data

There is a great deal of discussion going on about mobile data, wireless broadband and mobile media, but the reality is that mobile voice and SMS still generate 90% of mobile revenues. Full-blown, end-to-end IP-based wireless broadband infrastructure will not be in place until 2012-2015. So the changeover, especially over the next few years, will remain rather slow, with an initial change starting perhaps later in 2009 when Optus has its nationwide 3G HSDPA network in place.

Now with mobile wireless broadband we are starting to see people taking up an extra subscription - one for voice and one for data. This will continue for a while before we see more combined offerings.

3G networks

All four major mobile operators - Telstra, Optus, Vodafone and Hutchison - are well underway to completing faster 3G network upgrades. Telstra Next G network is the first step in a three-year plan. Optus’ HSPA network upgrade and build is scheduled for completion in 2010. Vodafone Australia national 3G HSPA will reach 95% of the Australian population and Hutchison plans to boost its coverage to 96% of the population during the first half of 2009.

The rapid growth in 3G subscribers is of course mainly due to substitution from 2G. By 2009, BuddeComm predicts that the 3G subscriber base will in fact surpass the 2G subscriber base total.

Handset market

A change is underway at the moment that is fundamentally reshaping the mobile vendor landscape. Vendor brand profiles are changing. Samsung, and LG and are on the rise. Sales of handsets are slowing down, mainly driven by economic developments. However, at the top-end of the market with iPhone and BlackBerry, there is a price war looming to accelerate growth in phone sales. The price of handsets is on the rise again, this time driven by more features which do appeal to the users. For more information on the handset market, see chapter 8, page 58.

Prepaid electronic payment services market Disasters like the exit of Bill Express from the electronic prepaid service market will only serve to make it more difficult for independent service providers to become involved in the mobile market, especially in such critical areas as bill payment. More stringent business checks have been put in place by the operators and this, of course, also caused them to look at other potential means of distribution, such as their own web-based recharging services. For more information, see chapter 11, page 87.

Key highlights:

  • For the year to June 2008, the total mobile services market was worth $14.4 billion, with a growth rate of 9.6%. BuddeComm predicts this growth rate will gradually taper off further to around 8.3% in 2008/09, 8.0% in 2009/10 and 7.0% in 2010/11, when the market is expected to reach $18.0 billion.
  • Telstra has now overtaken Hutchison as the market leader in the mobile broadband space, showing very strong overall mobile services revenue growth of 11.8% in 2008.
  • Optus was the weakest of the mobile operators in terms of revenue growth in 2008, just 4.2%, behind Vodafone with 7.0%. For more information, see chapter 5.2, page 36.
  • During 2007/08, Telstra consolidated its number one spot in the mobile market, gaining nearly a full percentage point, to take just over 44% of the overall market in terms of mobile service revenues.
  • The Australian mobile market has reached the point of saturation and new growth is mainly coming from young people moving into the market. We predict that subscriber growth will subside to 6.4% in 2008/09, 2.5% in 2009/10 and reduce even further to only 2% in 2010/11.
  • Moving forward into 2009, BuddeComm predicts that the gap between Hutchison and the rest of the market in terms of subscriber growth will begin to quickly diminish as the early competitive advantage it gained previously in the 3G space is being slowly eaten away.
  • Telstra’s subscriber market share fell slightly in the year to June 2008 to 42%; however this drop was off a large base, and with strong 3G revenues, Telstra will continue to lead the mobile market moving forward. For more information, see chapter 6, page 43.
  • Vodafone’s subscriber market share has been hovering around the 17% mark since 2006, and we predict it will maintain at this level moving forward into 2008/09.
  • Optus also has a stable subscriber market share of around 33%, which should continue into 2008/09.
Phil Harpur
September 2008

Data in this report is the latest available at the time of preparation and may not be for the current year.

For those needing high level strategic analysis, statistics and forecasts of Australia’s mobile market, this report identifies business opportunities, points out the hype and the pitfalls, and will be of assistance in making the right business decisions. It provides essential reading and gives in-depth information on:

  • Mobile statistics, revenues, ARPU, market shares and forecasting to 2011, split by operator;
  • 3G operators and network infrastructure overviews;
  • Mobile handset market including key players and statistics;
  • Mobile satellite market;
  • Prepaid Electronic Services Market;
  • Fixed-to-Mobile Convergence, Termination and Pricing;
  • Mobile Spectrum Developments;
  • Mobile retail market.


1. THE MARKET IN 2008
1.1 Telstra is taking the mobile lead
1.2 The mobile voice market
1.3 Mobile broadband
1.4 Next Generation Mobile (NGM)
1.5 Mobile content
1.6 The end of mobile portals
1.7 Off-deck services
1.8 Mobile payments
1.9 IP telemetry
1.10 The handset market
1.11 Nokia music store analysis
1.12 The Apple iPhone


2. TRENDS AND DEVELOPMENTS
2.1 Fixed-mobile substitution (FMS)
2.1.1 Fixed-mobile convergence (FMC)
2.1.1.1 Description of FMC
2.1.1.2 FMC in Australia limited to service bundling
2.1.1.3 Decline of fixed-line access
2.1.1.4 Impact of new services
2.1.1.5 Incentives to converge
2.1.2 Fixed-mobile substitution (FMS)
2.1.2.1 Description of FMS
2.1.2.2 Usage FMS is increasing
2.1.2.3 Access FMS remains limited
2.2 Mobile pricing
2.2.1 Mobile services index - 2007
2.2.2 Mobile pricing trends
2.3 National mobile termination fees
2.3.1 ACCC finalises mobile termination - 2008
2.3.2 New prices set in 2007


3. INDUSTRY OVERVIEW AND ANALYSIS
3.1 Industry overview
3.1.1 Network operators
3.1.2 The initial analogue operators
3.1.3 2G operators
3.1.4 3G
3.2 Service providers and resellers
3.2.1 Overview
3.2.2 Resellers on the Telstra network
3.2.3 Resellers on the Optus network
3.2.4 Resellers on the Vodafone network
3.3 Market analysis of the major mobile operators
3.3.1 Telstra has the mobile lead
3.3.2 Optus caught on the back foot
3.3.3 Vodafone remains in same position
3.3.4 Hutchison no longer 3G market leader
3.4 Mobile Virtual Network Operators (MVNOs)
3.4.1 Definition
3.4.2 Introduction
3.4.3 Virgin Mobile (now Optus)
3.4.4 Macquarie Telecom
3.4.5 Analysis of MVNO developments
3.5 Mobile Virtual Network Enablers (MVNEs)
3.5.1 Introduction
3.5.2 ComTel Corporation (Formerly Commoditel Ltd)
3.5.2.1 Overview
3.5.2.2 Mobile Telecoms
3.5.2.3 Marketing enabled mobile offerings
3.5.3 M2 Telecommunications Group
3.5.3.1 Overview
3.5.3.2 M2 Wholesale
3.5.3.3 Other acquisitions
3.6 Retail operators
3.7 Historic overview
3.7.1 Resellers on the Telstra network
3.7.2 Resellers on the Optus network
3.7.3 Resellers on the Vodafone network
3.7.4 MVNO initiatives from Optus


4. MOBILE RETAIL MARKET
4.1 The industry in 2008
4.1.1 Tough times and new opportunities ahead
4.1.2 Face of the industry
4.1.3 Umbrella strategy
4.1.4 Outlook
4.2 Overview of the dealer market - 2008
4.2.1 Market overview
4.2.2 Market revenues
4.2.3 Need for more sophisticated retail models
4.2.4 The industry reorganisation of 2005 - historic
4.3 Retailer market analysis - update - 2008
4.3.1 Retail margin continues to be squeezed
4.3.2 New mobile phone market: 8 million
4.3.3 Market segmentation
4.4 Key retail operators
4.4.1 Strathfield Car Radio
4.4.2 Crazy John’s (Mobile World)
4.4.3 Tandy, Dick Smith, Harvey Norman
4.4.4 Leading Edge Telecoms
4.4.5 Vita Group (Fone Zone)
4.4.6 Allphones
4.4.7 M
4.4.8 First Mobile National Ltd
4.4.9 Mo’s Mobiles
4.4.10 The SOUL group
4.4.11 Network Communications
4.4.12 TeleChoice
4.5 Retail outlets carriers
4.5.1 Telstra Mobile Net
4.5.2 Optus World


5. REVENUE OVERVIEW AND FORECASTS
5.1 Overall market revenue and forecasts
5.2 Revenue statistics by operator and annual growth
5.3 Market shares by operator
5.4 Mobile data market
5.5 Average Revenue per User (ARPU)
5.5.1 Market trends
5.5.2 Business market
5.5.3 3G ARPUs
5.5.4 ARPU per operator
5.5.4.1 Telstra
5.5.4.2 Optus
5.5.4.3 Vodafone
5.5.4.4 Hutchison


6. SUBSCRIBER STATISTICS AND FORECASTS
6.1 Mobile subscriber overview
6.1.1 Subscribers and annual growth rates
6.1.2 2G and 3G subscribers by carrier
6.1.3 Prepaid subscribers by operator
6.1.4 Additional subscribers by segment - Telstra
6.1.5 Market shares of the major players
6.2 Business market


7. 3G NETWORK DEVELOPMENTS
7.1 Telstra
7.1.1 Overview
7.1.1.1 3G network sharing agreement with Hutchison
7.1.2 Next G - 3G/WCDMA 850MHz network
7.1.2.1 Network overview
7.1.2.2 Network speed
7.1.2.3 Network coverage
7.1.3 HSPA+ trials and preparation for LTE
7.2 Optus
7.2.1 3G services launched in 2005
7.2.2 HSPA network upgrade
7.2.2.1 Overview
7.2.2.2 Network speeds
7.2.2.3 Network coverage
7.2.2.4 Rollout progress
7.2.2.5 Wholesale activities
7.3 Vodafone
7.3.1 3G network
7.3.2 Optus/Vodafone sharing arrangements
7.3.3 HSPA launch
7.3.4 Managed service deals
7.4 Hutchison 3G
7.4.1 Overview of 3G networks
7.4.2 3G ‘3’ network
7.4.3 Network management
7.4.4 3G network sharing agreement with Telstra
7.4.5 HSDPA network upgrade
7.4.6 3G Network expansion


8. HANDSET MARKET
8.1 Changes to the market
8.1.1 Overview
8.1.2 Apple and Google - hijacking the mobile operators
8.1.3 Mobile vendors set to lose the proprietary battle
8.1.4 Mid-tier mobile phones to decline
8.1.4.1 Introduction
8.1.4.2 Decline of mid-tier market
8.1.4.3 Rise of smart phones
8.1.4.4 Handset manufacturers prepare for changing market
8.2 Market overview
8.2.1 Telco driven market
8.2.2 Trends in mobile handset market
8.2.3 Replacement market
8.3 Handset sales statistics
8.3.1 2008
8.3.2 2007
8.4 Handset costs
8.5 Handset supplier market shares
8.6 Market developments
8.6.1 The Apple iPhone
8.6.2 Optus launches new home phone/Internet over 3G
8.6.3 Skypephone
8.6.4 Optus Kiosks
8.7 Market surveys
8.7.1 AIMIAA survey on mobile phone ownership and usage
8.7.1.1 Mobile Phone ownership trends
8.7.1.2 Mobile phone usage trends
8.7.2 Survey on mobile phone functionality
8.7.3 Internet access via mobile phones
8.7.4 Mobile email usage statistics
8.7.5 ACMA survey - reasons for purchasing a mobile phone


9. MOBILE INFRASTRUCTURE
9.1 Trends and developments
9.1.1 How many mobile networks is too many?
9.1.2 Mobile structural separation
9.1.3 Mobile phone infrastructure code improved by ACMA
9.2 Mobile investment
9.2.1 Study shows forecast value of mobile data industry
9.3 GSM infrastructure providers
9.3.1 Telstra
9.3.2 Optus
9.3.3 2G network overview
9.3.4 Vodafone Australia
9.3.5 Crown Castle
9.4 Other networks
9.4.1 Cocos (Keeling) Islands
9.4.2 Norfolk Island
9.4.2.1 Overview
9.4.2.2 Fibre optic network
9.4.2.3 Mobile network
9.4.2.4 Brief introduction of competition
9.4.2.5 Future plans
9.4.3 Christmas Island
9.5 Code Division Multiple Access (CDMA) networks
9.5.1 Telstra
9.5.2 Hutchison - Orange
9.6 Telstra Vehicle Access Network
9.7 IP Multimedia Subsystem (IMS)
9.7.1 Introduction
9.7.2 Partnership to promote IMS technology
9.7.3 Market analysis
9.7.3.1 Managing the digital media
9.7.3.2 Key tool for telcos
9.7.3.3 From mobile to fixed networks
9.7.3.4 IMS tool for new business models
9.7.4 Missed IMS opportunities for wholesale
9.8 Mobile sites infrastructure
9.8.1 Overview


10. SPECTRUM DEVELOPMENTS
10.1 One.Tel licences up for sale
10.2 Technological advances
10.3 Who owns what where
10.4 Apparatus licences
10.5 Unlicensed spectrum (IMS)
10.6 Mobile licences
10.6.1 Introduction
10.6.2 Preparations in Australia
10.6.3 Auctions
10.7 Mobile satellite services
10.8 DECT services


11. PREPAID ELECTRONIC PAYMENT SERVICES MARKET
11.1 Introduction
11.2 Developments in 2008
11.3 Market forecasts
11.3.1 Mobile prepaid
11.3.2 Rechargeable calling cards (swipe cards)
11.4 Market overview
11.4.1 Retail outlets
11.4.2 Card and PIN (scratch cards)
11.5 Other recharge models
11.5.1 Automatic Teller Machines (ATMs)
11.5.2 Electronic Funds Transfer Point of Sale (EFTPOS)
11.5.3 Integration onto POS PC screens
11.5.4 IVR and web-based services
11.6 Trends and developments
11.6.1 New electronic recharge cards
11.6.2 New markets
11.6.3 Electronic gift cards (open loop cards)
11.6.3.1 Introduction
11.6.3.2 Visa gift cards
11.6.3.3 Blackhawk Network
11.7 Revenue overview
11.8 Major players
11.8.1 e-pay Australia
11.8.2 Web-based services
11.8.2.1 Prepaid International
11.8.2.2 mobux.com.au
11.8.3 Bill Express Limited (DEFUNCT)
11.9 Prepaid open to misuse


12. MOBILE SATELLITE SERVICES
12.1 Introduction
12.2 Subscriber statistics
12.3 Mobile satellite service Band Plan
12.4 Mobile satellite phone subsidies
12.4.1 Extension scheme from 2006
12.5 Telstra’s networks
12.5.1 Inmarsat and maritime communications
12.5.1.1 Inmarsat Satcom Australia
12.5.2 Iterra (VSATs)
12.5.3 Iridium Satellite LLC
12.6 MobileSat - Optus
12.7 Pivotel Group
12.8 QuikTrak
12.9 FedSat - Australia’s own LEO
12.10 Global Positioning System (GPS)


13. GLOSSARY OF ABBREVIATIONS


LIST OF TABLES
Table number: on page number:
Table 1 - Year fixed-line access peaked in selected countries
Table 2 - Year-on-year percent change in price indexes for mobile services - 2002 - 2007
Table 3 - Leading retailers and number of outlets - 2008
Table 4 - Total mobile services market revenue and annual change - 1993 - 2011
Table 5 - Mobile services market revenue per major operator - 1993 - 2009
Table 6 - Annual growth of mobile services market per major operator - 1994 - 2009
Table 7 - Mobile services revenue market share per major operator - 1997 - 2009
Table 8 - Mobile data revenues by operator - 2007 - 08
Table 9 - Average ARPU ($ per month) across all operators - 1993 - 2010
Table 10 - Blended ARPU by operator - 2003 - 2008
Table 11 - Blended ARPU by operator - annual growth - 2003 - 2008
Table 12 - Historical blended ARPU ($ per month) by operator - 1998 - 2002
Table 13 − 2G, 3G ARPU per month comparison − 2006 - 2010
Table 14 - Telstra prepaid, postpaid ARPU per month - 2004 - 2008
Table 15 - Telstra ARPU per month - by network type - 2006 - 2008
Table 16 - Optus prepaid, postpaid and blended ARPU per month - 2004 - 2008
Table 17 - Vodafone - Monthly prepaid / postpaid / blended ARPU - 2004 - 2008
Table 18 - ARPU per month - 2006 - 2008
Table 19 - Hutchison ARPU per month - 2004 - 2008
Table 20 - Hutchison non-voice ARPU per month - 2004 - 2006
Table 21 - Mobile market subscribers, penetration and annual change - 1986 - 2011
Table 22 - Mobile subscribers by carrier - 1993 - 2009
Table 23 - Annual growth rate of mobile subscribers by carrier - 1995 - 2009
Table 24 - 3G mobile subscribers by carrier − 2003 - 2009
Table 25 − Annual growth rate of 3G mobile subscribers by carrier − 2007 - 2009
Table 26 - Proportion 3G mobile subscribers versus total subscribers by carrier − 2006 - 2009
Table 27 - 2G mobile subscribers by carrier − 2006 - 2009
Table 28 − Annual growth rate of 2G mobile subscribers by carrier − 2007 - 2009
Table 29 - Total mobile subscribers by technology - 2007
Table 30 - Percentage prepaid subscribers per operator - 2006 - 2009
Table 31 - Prepaid subscribers per operator - 2006 - 2009
Table 32 - Total prepaid subscribers (historical) - 1998 - 2005
Table 33 - Number of mobile phone services in operation - pre and postpaid - 2005 - 2007
Table 34 - Telstra mobile subscribers by 2G/3G and annual change - 2006 - 2008
Table 35 - Telstra mobile subscribers - pre and postpaid and annual change - 2006 - 2008
Table 36 - Telstra wholesale subscribers - 2006 - 2008
Table 37 - Telstra 3G mobile subscribers - pre and postpaid and annual change - 2007 - 2008
Table 38 - Mobile subscriber market share (%) by carrier - 1993 - 20091
Table 39 - Revenue (%) per market segment (corporate, SME, residential) - 1994 - 2010
Table 40 - Low, mid & high-end of mobile device market - percentage of units sold - 2007; 2013
Table 41 - Australian handset sales into channels per calendar year - 2004 - 2008
Table 42 - Australian handset sales into channels per quarter - 2007 - 2008
Table 43 - Australian handset sales into channels, March - 2005 - 2008
Table 44 - Australian handset sales into channels, cumulative Jan-Mar - 2005 - 2008
Table 45 - Mobile phone sales and percentage growth - 2005 - 2007
Table 46 - Handset sales by technology - 2006
Table 47 - Average mobile phone cost - 1986; 1993; 1998 - 2000; 2006, 2008
Table 48 - Australian handset supplier market share - top four suppliers - 2008
Table 49 - Handset supplier market share - top 3 suppliers globally - Q3 2007; Q1 2008
Table 50 - Handset suppliers’ market shares - 1999 - 2005; 2007
Table 51 - Monthly spend of mobile users - 2008
Table 52 - Terrestrial mobile network coverage - 2002; 2008
Table 53 - Number of base stations and technology used by operators - 2008
Table 54 - Mobile spectrum by city
Table 55 - Market share electronic mobile payments of total prepaid - 2002 - 2009
Table 56 - Electronic payment market revenues - 2008
Table 57 - Major electronic payment providers and their market share - 2008


LIST OF EXHIBITS
Exhibit number: on page number:
Exhibit 1 - Examples of overseas FMC implementations
Exhibit 2 - Mobile carriers and their key resellers
Exhibit 3 - Boost Tel
Exhibit 4 - MVNO models
Exhibit 5 - MVNO opportunities
Exhibit 6 - Distribution channels - 2008
Exhibit 7 - Crazy John’s billing problems
Exhibit 8 - Key customer considerations
Exhibit 9 - Norfolk Island key telecommunication infrastructure statistics - 2008
Exhibit 10 - CDMA services by operator (now closed)
Exhibit 11 - GSM services by operator
Exhibit 12 - Top gift card statistics
Exhibit 13 - Mobile satellite services

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