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Australia - Telco Company Profiles - Telstra, Optus, Vodafone and NBN Co

Australia - Telco Company Profiles - Telstra, Optus, Vodafone and NBN Co

Telstra retains dominance while a resurgent Vodafone promises 2015 fight-back

The incumbent operator Telstra continues to benefit from the company’s turnaround being implemented by its current CEO. It dominates the fixed-line and broadband sectors, and is also the main player in the mobile sector, having been the first to take advantage of mobile broadband opportunities with its Next G network. This was followed through with it being the first to launch LTE services, gaining it considerable market advantages. Optus is determined to keep pace with Telstra as the mobile segment migrates to LTE, though it continues to lack the vision to make a significant impression to attract consumers, and so address stagnant subscriber growth. Vodafone continues to struggle with poor customer perception of its network reliability, though strong investments in recent quarters, combined with attractive data plans and schemes such as adding premium Spotify services for subscribers, have been noted by consumers. This is helping to slow customer losses. The company’s determination to claw its way back into the market should show dividends into 2015. NBN Co has been added to this report for the first time; it is rapidly becoming the next big first-tier company and will grow into the dominant infrastructure company in the country.

Telstra

Telstra is Australia’s largest telco, offering a full range of telecom services to most homes and businesses. It has some three million broadband subscribers and over 16 million mobile telephony subscribers. The company is continuing to attract a large number of LTE mobile broadband customers, taking advantage of its wider network footprint that than offered by competitors.

Wholesale services are also provided, while advertising and subscription TV services are offered through subsidiary companies. Several strategic investments undertaken in 2013 and 2014 have strengthened Telstra’s position in the e-health services market. The new Telstra Health division augurs well for the company’s commitment into new ventures which take advantage of its existing infrastructure assets, while acquisitions such as that of the video streaming and analytics company Ooyala showcase its interest in becoming a player in OTT services.

The report provides an overview of Telstra’s main areas of operation including its strategic business units and local and international subsidiaries. It also includes financial summaries to FY2014, as well as an analysis of the company’s three-pillar strategy. In addition, the report provides key operating statistics related to network and operations data, traffic, and developments in the mobile, broadband and pay TV sectors, as well as an overview of its position related to NGN developments.

Optus

Optus provides a range of communications services including mobile and fixed-line telephony, business network services, internet and satellite services, subscription TV and digital media services.

Though the company has seen a relatively poor financial performance, the NBN interim satellite service contract has provided a financial bonus for the company. The Optus satellite unit has survived plans for its sale, and in May 2014 Optus secured a five-year deal to operate the NBN Co’s two new satellites, due for launch in 2015.

The mobile sector clearly remains the company’s key market, though both its market share and ARPU are under pressure. At the same time, more investment is needed to stay ahead in the all-important mobile broadband market. Optus and Telstra both secured valuable spectrum in the 700MHz band at auction in early 2014, and both were granted trial licenses ahead of the official release of spectrum in January 2015. Optus is also committed to matching Telstra’s 98% population coverage with LTE by the end of 2016. These developments will keep Optus at the forefront of the mobile data segment, and will it help retain valuable customers as they look to network capability and availability for their broadband and data services

While overall revenue increased 1% in FY2012, year-on-year, into FY2013 and FY2014 the company has experienced revenue falls across some of its markets. This was especially seen in FY2014, when revenue fell 5.2% year-on-year. Nevertheless, EBITDA grew 5.1% and net profit climbed 14.6%. Operating profit for the first quarter of FY2015 fell 2.8% year-on-year.

The report provides an overview of the main divisions within Optus, including a breakdown of key financial and operating statistics for internet, broadband, voice and mobile services. Data to June 2014 is included, as well as recent market developments.

Vodafone

Vodafone is the third-largest mobile carrier in Australia, being formed as a 50/50 joint venture in 2009 following the merger of Vodafone Australia and Hutchison 3G Australia. Vodafone offers a comprehensive suite of prepaid and postpaid mobile voice and data products to the residential and business segments.

Network upgrades continue, and new sites are being added across Australia as the company ramps up its investment in infrastructure in a bid to retain customers. In 2013 the operator launched LTE services, thus being able to compete with Optus and Telstra in a market with tremendous growth potential. Nevertheless, Vodafone remains at a disadvantage for not having secured spectrum in the 700MHz band. Instead it is extending the availability of LTE services by redeploying its 850MHz concessions for LTE, aiming to deliver LTE to 95% of the metro population by the end of 2014.

Network shortcomings have been disastrous for the company since 2011: despite recent improvements, customer losses continued into the first half of 2014, though at a lower level than that seen in earlier years. Nevertheless, Vodafone has committed to investing, while management shows a promising determination to fight back for market share and consumer confidence. As such, the company’s performance into 2015 will be keenly watched.

This report provides an overview of Vodafone Australia, including the latest financial and operating statistics as well as analyses of the company’s market position and strategies going forward.

NBN Co

NBN Co was launched in April 2009 NBN Co as a government business enterprise (GBE), wholly owned by the Commonwealth of Australia. It is overseen by ‘shareholder ministers’ – the Minister for Broadband, Communications and the Digital Economy and the Minister of Finance and Deregulation.

The purpose of the company is to build a nationwide, wholesale-only, high-speed, open broadband network. Since its inception it has been selecting technology and designing the network and systems, as well as developing a wholesale product offering.

In its original plan under the previous government, the company would connect 93% of homes, schools and workplaces to an optical fibre network (fibre-to-the-premises – FttP), providing high-speed broadband services to Australians in urban and regional towns. The remaining 7% of premises will be connected to an LTE-based fixed wireless network, and this includes the very remote ones who will be linked to a satellite network.

With the arrival of a new government the original plan will be replaced by what they call an ‘Optimised Multi-Technology Mix’. While details of this plan are slowly emerging it won’t be until 2015 before the extent of the changes become clear.

Under the new plan at least 90% of Australians would get broadband speeds of about 50 Mbps by year-end 2019.

The new plan would cost $41 billion. It is a move away from a pure fibre-to-the-premises (FttP) plan to a multi-technology approach deploying FttP, FttN, FttB/DP and HFC in addition to fixed wireless and satellite.

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


  • EXECUTIVE SUMMARY
  • TOTAL TELECOMMUNICATIONS SERVICES MARKET
    • REVENUE, REVENUE GROWTH AND MARKET SHARE BY MAJOR PROVIDER
      • Table Historic - Total telecoms revenues by major providers - 2000 - 2004
      • Table Total telecoms revenues by major providers - 2005 - 2014
      • Table Total telecoms service market share by major providers - 2003 - 2014
  • TELSTRA
    • COMPANY OVERVIEW AND OPERATING STATISTICS
      • Overview
      • Telstra revolution
      • Strategy moving forward
      • Recent developments
      • Operational statistical information
        • Table Statistical overview of network traffic counts - 2008 - 2013
        • Table ISDN lines overview of network and operational services - 2008 - 2014
        • Table LLU customers - 2008 - 2014
        • Table Statistical overview of network lines in service - 2008 - 2014
        • Table Employee count - 2008 - 2014
        • Table Statistical overview of mobile operational services - 2008 - 2014
        • Table Spectrum sharing services - 2008 - 2014
        • Table Statistical overview of online internet services - 2008 - 2014
        • Table Annual change of calls - 2009 - 2013
        • Table Annual change of fixed access lines in service - 2010 - 2014
        • Table Annual change of mobile subscribers - 2010 - 2014
        • Table Annual change of online subscribers - 2010 - 2014
      • An impressive performance for FY2014
      • Business units
      • Networks
      • Controlled and associated entities
    • FINANCIAL STATISTICS
      • Group results summary
        • Table Historic - Telstra Group total revenue - 1994 - 2004
        • Table Telstra Group total revenue - 2005 - 2014
        • Table Telstra Group revenue by segment - 2009 - 2014
        • Table Telstra Group EBITDA by segment - 2010 - 2014
        • Table Telstra Group key performance indicators - 2002 - 2014
        • Table Telstra Group key performance indicators by annual change - 2003 - 2014
        • Table Telstra Group revenue by service - 2009 - 2014
        • Table Selected Telstra revenue by service - 2009 - 2014
        • Table Telstra Group revenue by segment - FY2013 - FY2014
        • Table Mobile business - FY2013 - FY2014
        • Table Fixed-line business - FY2013 - FY2014
        • Table Telstra IP and data access revenue - FY2013 - FY2014
        • Table Telstra offshore controlled entities revenue - FY2013 - FY2014
      • Public switched telephone network (PSTN)
        • Table Telstra PSTN products revenue - 2010 - 2013
      • Mobile
        • Table Telstra mobile revenue - 2009 - 2014
        • Table Telstra mobile ARPU - 2009 - 2014
        • Table Telstra mobile prepaid and postpaid revenue - 2008 - 2014
      • Fixed Broadband
        • Table Telstra fixed broadband revenue by service stream - 2009 - 2013
      • Sensis
        • Table Sensis financial summary - 2009 - 2013
      • IP and data access
        • Table Telstra IP and data access revenue - 2009 - 2014
      • Telstra international
        • Table Telstra offshore controlled entities revenue - 2009 - 2014
        • Table CSL New World revenue, expenses, EBITDA, EBIT, capex - 2009 - 2013
        • Table TelstraClear historic financial figures - 2009 - 2012
    • TELSTRA AND THE NBN
      • Telstra and the NBN plans of the new government
    • TELSTRA ANALYSIS
      • Telstra looking ahead
      • Telstra within the broader market and industry developments
      • The Telstra transition
      • Telstra Media - analysis
      • Other analysis
  • OPTUS
    • OVERVIEW AND OPERATING STATISTICS
      • Overview
      • Company changes
      • Operating results
        • Table Optus mobile pre/postpaid customers - 2008 - 2014
        • Table Historical - Optus mobile subscribers, annual change - 1998 - 2004
        • Table Optus mobile subscribers, annual change - 2005 - 2013
        • Table Optus mobile subscriber ARPU - 2009 - 2014
        • Table Optus mobile acquisition cost breakdown by quarter - 2009 - 2014
        • Table Optus on-net ARPU - 2008 - 2014
      • Financial highlights
      • Products and services
        • Table Optus business and wholesale statistics - 2009 - 2013
        • Table Optus consumer and business fixed telephony statistics - 2009 - 2014
        • Table Optus consumer and business fixed telephony statistics - 2008 - 2014
        • Table Historical - Total internet subscribers (broadband and dialup) - 1996; 1998; 2000 - 2008
      • Mobile services
      • Major subsidiaries
      • Company history
    • FINANCIAL STATISTICS &ANALYSIS
      • Overview
      • Company analysis
      • Financial results
        • Table Optus revenue by service (S$) - 2013 - 2014
        • Table Optus key financial indicators - 2009 - 2014
        • Table Optus mobile revenue - 2013 - 2014
        • Table Optus revenue by sector, annual change - 2012 - 2013
        • Table Overview of Optus overall operating revenue summary - 2000 - 2014
        • Table Operating revenue by operating division - 2009 - 2014
        • Table Operational EBITDA by operating division - 2008 - 2013
        • Table Optus revenue by major and minor service category - 2010 - 2013
      • Company history
    • THE NETWORK
      • Infrastructure overview
      • Consumer customer access network, the HFC network
      • Fixed network
      • Mobile network
      • Wireless networks
        • Table Optus Wireless Connect pricing - 2014
      • Wholesale activities
      • Digital media and cloud computing
      • VoIP network
      • Satellite networks
        • Table Optus satellite revenue - 2010 - 2013
    • ANALYSIS
      • Optus spectrum dilemma
      • Mobile market - key to Optus success
      • Optus deal with NBN Co
  • VODAFONE
    • COMPANY INFORMATION
      • Overview
    • COMPANY ANALYSIS
      • Network improvements - will the customers return?
      • Can Vodafone succeed with 4G /LTE?
      • Background analysis to Vodafone problems
      • Cash from the Verizon deal
      • Structural changes in the industry
      • CEO departure: new challenges
      • Company analysis
    • FINANCIAL HIGHLIGHTS
      • Overview HTA
      • Financial statistical overview
        • Table Vodafone Australia revenue - 2009 - 2014
        • Table HTA key metrics - financial overview - 2009 - 2014
        • Table Monthly ARPU and by segment - 2009 - 2012
        • Table Vodafone Australia revenue (historic) - 1996; 1998 - 2008
    • OPERATING HIGHLIGHTS
      • Overview
      • Key operating statistics
        • Table Vodafone - subscribers by type - 2009 - 2014
        • Table Vodafone - subscribers by type - 2009 – 2014
    • VODAFONE - 3 MERGER
      • Introduction
      • Recent subscriber developments
      • Background analysis
    • NETWORKS
      • Background
      • Vodafone network
      • 3 network
      • Vodafone and Optus to share infrastructure from 2013 onwards
      • Network upgrades - 2010 - 2014
      • LTE networks
    • MERGED COMPANY HISTORY
      • Brief timeline - 1989 - 2014
  • NBN CO
    • INTRODUCTION
    • RESULTS FIRST QUARTER 2015
      • Progress towards the Multi-Technology Mix
    • NBN CO'S FULL YEAR 2014 FINANCIAL RESULTS
      • Introduction
      • Financial Results
        • Table Capital Expenditure - 2012 - 2014
        • Table NBN Co Revenue 2012 - 2014
        • Table NBN ARPU - 2013 - 2014
      • Rollout statistics
        • Table NBN Co' key operational data 2012 - 2014
        • Table NBN Premises Activated 2011 - 2014
    • THE NETWORK PLAN
      • Overall design and architecture
      • User access to the network
      • The backhaul network
      • ACCC location of 121 POIs
        • Table List of points of interconnection to the National Broadband Network - November 2012
      • Points-of-interconnect (POI) architecture
      • Paid for Network Extension
    • NBN CO BUYS TRANSACT
    • MOBILE BACKHAUL
      • NBN for mobile infrastructure
      • Technical trials
      • Early testing results from Vodafone
    • HFC EQUIPMENT
    • TELSTRA UPGRADES PIT AND PIPE INFRASTRUCTURE
    • NBN INFRASTRUCTURE CO-DEVELOPMENT PROGRAM

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