For those needing detailed revenues, forecasting and analysis on the Australian telecommunications market, this report provides essential reading and gives in-depth information on:
Revenue, annual growth and market share statistics. Analysis and revenue forecasting to 2015. Market statistics segmentation by voice, mobile and data. Market segmentation by major provider. Overview and analysis of the 2nd tier telco market as well as Telstra and Optus. Mobile and broadband statistics and overviews.
Globally the focus of telecommunications infrastructure has shifted towards FttH. In Australia, the absence of decision-making and the ongoing delays in the broadband market are impeding the government from the rolling out of next generation telecoms infrastructure before the end of 2009.
Recent regulatory changes have also seen the ACCC putting its emphasis on facilities-based competition (ULL and DSLAMs) rather than on resale. This further undermines the position of not just the smaller ISPs, but also of the larger ISPs, like Primus and AAPT, which have significant numbers of resale customers. Further consolidation will be needed, especially in relation to those players with large resale customer bases. The acquisition of Westnet by iiNet and TPG by Soul should also be looked at in this context.
Without a genuine participation from Telstra in the execution of the National Broadband Plan, any government investment would be wasted as Telstra refuses to participate in the process. Instead it has opted for a highly focused and successful campaign to delay any new form of competition. Without firm government action the currently announced delays in the NBN process will become enduring. For more information, see chapter 2.2, page 15.
The Australian Government is well aware of the importance of e-government and has shown leadership in developing online services. The benefits of e-government applications can include cutting costs and improving processes and information flow, but one of its primary aims is to improve customer service for citizens.
Rapid growth for 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.
Nevertheless we are seeing a real explosion in mobile wireless broadband. People are starting to take up an extra subscription one for voice one for data. This will continue for a while before we see more combined offerings.
In a ‘voice’ sense, the additional value of VoIP could lie in developing further innovations linked to the social, value-added experience of certain voice calls - in cases where delayed communication is problematic because the quality of the event/experience outweighs the actual cost of the call. Broadband is now dominating the fixed-line market, and voice (VoIP) will play a key role in broadband, where it will also be linked with video communication.
Overall telecoms market
BuddeComm estimates that the overall telecoms market grew by 6.0% to $38.0 billion in the 12 months to June 2008, however this growth rate in real terms is only around 4.7% if an inconsistency in Telstra’s financial reporting is eliminated. Telstra however still dominates the overall Australian telecom market with a massive 66% market share of overall revenues in 2007/08. Optus’ market share of overall telco service revenues has been fairly stagnant over the past few years at just over 20% and we predict a similar trend moving into 2009 and 2010. For year to June 2008, the total mobile services market that was worth $14.4 billion, with a growth rate of 9.6%. BuddeComm predicts that moving forward into 2008/09 and 2009/10, the overall market will grow with an overall growth rate slightly below the 2007/08 financial year at around 4.6%.
Broadband subscriber growth in recent years has been driven by further strong uptake of ADSL subscribers, although recent growth has not as strong as the previous two years as the majority of the market has now made the transition from dial-up to broadband.
Telstra clearly outperformed the rest of the market in terms of broadband access revenue growth in and 2008, whereas Optus saw a significant decline in broadband access revenues growth, mainly due to a loss of off-net resale ADSL subscribers.
By mid-2009, BuddeComm predicts total wireless broadband market will be generating $1.4 worth of revenues, the vast majority of which will be accounted for by 3G mobile wireless broadband revenues. By this time the battle in the 3G wireless broadband market will have really heated up. The fixed wireless market is showing however only modest growth - operators like Unwired and BigAir are currently using pre-WiMAX proprietary wireless broadband technology, and have been patiently waiting for several years now to make the transition to WiMAX technology, however constant delays have postponed the launch. It appears that in any case, WiMAX has now well and truly lost the battle to the 3G operators, which will leave any future WiMAX operators to develop in niche markets only. M2M might be the next opportunity for WiMAX to look at.
In a market that has already reached saturation, and where mobile call charges are declining, operators’ revenue growths 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 the increased revenue streams that the mobile operators are getting from 3G mobile data / mobile broadband.
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 that it gained previously in the 3G space is being slowly eaten away.
Data market is key driver of growth
PSTN revenues (fixed line voice and local access revenues), continue on a downward spiral for all the telcos. Moving forward into 2008/09, a decline of 5% is expected, to take the total fixed voice market down to $9.78 billion. The rate of decline will accelerate further in by 6% in 2009/10.
The data market has now taken over the mobile sector the main driver of growth driven by the retail broadband sector. Mobile voice revenues are starting to decline in saturated market, however the mobile wireless broadband sector is keeping mobile revenue growth reasonably strong.
Retail broadband continues to be the real market driver within the data market. Traditional specialised data categories such as frame relay and ATM continue to decline, whereas IP Access revenues are growing strongly, especially IP MAN revenues which are overtaking the more traditional frame relay product. Market Outlook to 2018
The industry is currently experiencing rebalancing and cannibalisation, but the underlying growth factors remain high and demand for high-speed infrastructure will outperform supply. This means significant growth in new IP-based NGN systems. That, in turn, will open up the market for digital media services, applications, video content hosting and distribution. By the end of 2018 FttH and wireless broadband will be widely available and will be used by the telecoms, IT and media industries.
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