This report covers high-level and detailed data on the telecommunications market. Included are 78 statistical tables covering Telecommunications Infrastructure, Fixed Voice and Data Markets. Statistical tables include:-
The market in 2006
While the market is booming on the demand side, supply is experiencing serious problems. Telstra’s dominance and anti-competitive actions are having a devastating effect on the industry. At the same time, there is a major misalignment between most players and their customers. The market is moving towards digital media, device-based services and Internet business models, but the industry is hanging on to outdated models, as it has left it too late to make the changes required in this fast-moving market.
The fixed line market will gradually decline from 2007 onwards as local access charges as well as voice calls decline for all traditional voice services. Up until 2006, mobile was the key driver of growth of the overall telecoms market but, as the market rapidly approaches saturation, growth has already begun to subside in the mobile sector.
Growth is continuing in the 2nd tier telco market which reached the $8.7 billion mark by 2006 but, with lower broadband margins, a saturated mobile market and lots of price competition, growth in ‘real’ revenue is much harder to find. It favours the larger players but, at the same time, the new converged environment offers plenty of niche market opportunities for smaller players. The number of large competitors has increased as a result of consolidation, which has created a healthier industry segment overall.
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.
Telstra’s effect on the market moving into 2007
Telsta is still having a smothering effect on the market. When its new CEO arrived in mid-2005 he immediately made his presence felt, and this produced an atmosphere of both excitement and fear.
On the one hand he acknowledged the weaknesses within Telstra - he said that the company had under-invested in infrastructure, had become fat and lazy, that it needed to be restructured, and that the future was in broadband and the company needed to lift its game there.
To make the necessary changes, Telstra embarked on a series of interesting developments, attracting much applause and support. However, the consequent strategies to achieve these goals are very un-Australian.
Rather than implement his vision within the existing industry environment, he chose a set of strategies that would undermine the competitive environment the government had started in 1997:
He immediately curtailed existing wholesale arrangements.
He demanded a new monopoly (regulatory holiday) for the implementation of FttN.
He squeezed the broadband providers in order to increase Telstra’s own share in the retail market.
The government indicated that it would not be moved on its telecoms policies and the existing telecoms legislation, but Telstra chose to ignore this and continued to try to undermine the pro-competitive telecoms environment in Australia.
It looks as though the company will persevere with this destructive behaviour throughout 2007.