This report analyses all the key issues in the Australian market. The conclusions reached define market and industry development for 2007 and beyond. The report explains where the business opportunities are - and where the pitfalls are. It debunks industry hype and identifies which technological developments will succeed and which will not. The report is a must for those involved in the decision-making processes around telecommunications and digital media.
The market moving towards 2007
New telco business models
Operational Separation of Telstra
NGN - VoIP - Stats, Overview, Analyses
Industry Trends and Analysis
3G - Overview, Statistics, Analyses
Broadband - Developments and Analysis
FTTH Analyses and Developments
Wireless Broadband - Analysis, statistics and forecasts
Digital Media - Analyses, Issues, Developments
Industry and competition analyses
Telcos are struggling to hold on to their old revenues while preparing themselves for a rapidly changing market place. After years of cost cutting the first telcos are starting to invest again; however, Australia is lagging behind. Key issues for the players are the decline in voice revenue and the emergence of VoIP. Also trying to move into media markets such as broadband TV and far more sophisticated delivery models (triple play) are providing the industry with plenty of challenges. In all of this the competition continues to struggle - they might increase retail market share but not margins.
We therefore argue for the abandoning, or at least lessening, of the regulation of traditional voice telco services. Too much time and effort is being wasted on this. Instead, let us concentrate on proactive competition policies that will see the rapid deployment of broadband, VoIP, NGN, triple play and the convergence of technologies, media and companies to deliver the next level of telecommunications products and services. The situation has dramatically deteriorated during 2005/06 and several companies are fighting for survival.
This has also been recognised by the government and after several years of aborted discussion, the government in September 2005 announced the operational separation of Telstra. Australia is only the second country after the UK where such far reaching regulatory reforms have been introduced. However, the government has indicated that the implementation of the reforms has been given to Telstra with the Minister in charge of monitoring this situation.
We examine the Australian mobile communications market, identifying a number of important trends on both the demand and side supply side. The killer application on mobile remains voice and beyond voice, there will not be a lot of room for growth apart from the current niche market for mobile data in business.
With the growing maturity of digital cellular systems around the world, attention has increasingly turned to the development of 3G cellular systems. The main objective of 3G systems is to provide a more robust network with a range of data and multimedia services. When 3G was first conceived in the late 1980s and early 1990s there was little or no discussion on issues such as wireless broadband services driven by the Internet. With mobile failing to open up more data revenues, personal wireless broadband could well take over this market, leaving 3G behind. By mid-2006 there were still only just around 1.5 million subscribers (8%).
The report also analyses the activities of the major players - Telstra, Optus, Vodafone and Hutchison. Hutchison continues to outperform its competitors in terms of market growth, but competition is heating up in the 3G arena.
The broadband battles have moved on from the lack of availability of broadband services to the lack of true broadband (speeds of 2Mb+), competitive prices for such high speed services and new applications such as IPTV and VoIP over broadband. In the meantime penetration is on the rise and is set to continue to do so throughout 2006 and 2007. Broadband Australia funding has attracted a number of new industry initiatives.
Key to the new multi media services that will be delivered are Next Generation Networks (NGNs).By the mid-2000s NGNs had become an integral part of the corporate networks. Many of them had used the millennium bug scare to seriously review their IT systems. By 2006 the majority of corporates had fully-deployed NGNs in place. While cannibalising other telecoms revenues the NGN market is set to grow to close to $1 billion by 2007. This is fuelled by Telstra’s ambitious NGN plans to overhaul the public network. The report explores and analyses the developments around this massive project. Other key players in the market include Optus, Soul, Macquarie Telecom, iiNet and Nextgen Networks.
IP based NGNs will become the core not just of the current DSL based networks but also of the fibre and wireless networks. Countries that recognise the importance of a fibre optic telecoms infrastructure for healthcare, education and e-government, as well as for their economy, are leading developments in Fibre-to-the-Home (FttH). The Australian government is currently in the process of joining this group of visionaries. However, despite its excellent plans and strategies in this field, Telstra has so far refused to roll out its planned FttN (Node) network. This report analyses the importance of FttH and examines the situation in Australia.
After years of waiting, the WiMAX standard was finally ratified in late 2005 and by early 2006 the first certified products had begun to arrive. Full commercial deployment is expected in 2007/08. WiMAX will be deployed in regional areas where fixed networks are less or not economically viable and also in those areas were the copper based networks are of a low quality. However, if the technology lives up to its promise, it will also generate a wireless mobile revolution between 2008 and 2010; delivering personal wireless broadband services. The reports analyses the latest developments and provides some initial statistics and forecasts of the market.
Convergence and the digital media
The convergence of telecommunications, media, IT and consumer electronic markets is offering unprecedented opportunities for those organisations who understand these developments and are able to analyse what will work for them. However, it is obvious that these new opportunities require new business models. Media convergence driven by technology will cause problems for companies that have a vested interest in maintaining their own ‘old’ structure. The lack of change towards new business models is one of the major stumbling blocks in the developments of a new economically viable market structure, which is needed to move the industry into 2007.
The first result from the convergence is the arrival of the new Digital Media. Led by the Internet, a new range of Internet Media is developing and these in turn are stimulating other industry sectors to also change their business models to better align them with the new emerging Internet economy. For this to happen it is essential that we have open networks. The success of the Internet shows the way forward here.