Australia - Telecoms Industry - Wholesale Market

1. Synopsis

2. Wholesale reforms

2.1 Introduction of regulatory instruments

2.2 Regulatory instruments analysis

2.3 Final access determinations for fixed line telecommunications

2.4 Layer 2 bitstream on non-NBN Co networks

2.5 Difference between peering and interconnection

2.6 The thriving wholesale aggregation market

3. The National Broadband Network

3.1 Introduction

3.2 The NBN wholesale and POI debate

3.3 CVC issue resolved

3.4 NBN Co's multicast service

3.5 Access seekers gateways

3.6 NBN Co price strategy

3.7 Wholesale prices

4. Wholesale revenues in Australia

5. Wholesale margins

6. Internet peering

7. Key wholesale services (copper based network)

7.1 Unconditioned Local Loop Services (ULLS)

7.2 Line sharing or spectrum sharing

7.3 Local Carriage Service (LCS)

7.4 Unbundled Bitstream (UBS)

7.5 UBS versus ULL

7.6 Naked DSL

8. Related reports

Table 1 The wholesale market in Australia - key players - 2014

Table 2 Wholesale market revenues by major supplier 2000 - 2014

Table 3 Wholesale market shares by major supplier 2000 - 2014

Table 4 Annual change in wholesale market revenues by major supplier 2000 - 2013

Table 5 Wholesale margins by product - 2005; 2007; 2008 - 2009

Table 6 Wholesale margins by industry group 2002; 2004; 2006; 2008 - 2009

Table 7 Wholesale margins by industry group 1996 - 2000 (historical)

Chart 1 Overview of wholesale market revenues by major supplier 2005 - 2014

Australia - Telecoms Industry - Wholesale Market

The $4 billion Australian telecommunications wholesale market has been largely concentrated on broadband services available through unbundled local loops (ULL) and naked DSL and line-sharing facilities in particular have created significant new competition in the market since 2008. This regime is still in place and continues to drive the current level of competition. Mobile wholesale has also been relaxed the margins available are rather slim but the combination of the smartphone, tablets and other new equipment is also making this market more attractive.

The reality, however, is that the future will be moving towards the national broadband network. This will create a more level playing field, but it is estimated that margins will come further under pressure and, as size does matter in this market, this will lead to further industry consolidation.

Despite improved market developments the industry remains concerned about the dominance of Telstra in the market, both in relation to the transitional period and to the new NBN environment. However under the current industry conditions regulatory progress is occurring much more quickly than it ever has in the past.

Developments in the digital economy and the trans-sector use of infrastructure will see an ongoing increase in wholesale revenues, as more and more new content and service providers begin to participate in this market. Furthermore, the Internet of Things (IoT) will extend the reach of the infrastructure to literally billions of new sensors, devices and other things' that will be added, opening up new opportunities in cloud computing, data centres, data analytics and so on.

Key developments:

National broadband network, regulation, regulatory instruments, structural separation, wholesale, retail, POI, Bitstream, unbundled local loop (ULL), line-sharing, naked DSL, peering, cloud computing, data centres, Internet of Things, (IoT), CVC, Pay TV, multicast; wholesale revenue data for operators to FY2014.

Companied covered in this report include:

NBN Co, Telstra, Optus, AAPT, Internode, Nextgen, Pipe Networks.