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2011 Australia Telecoms Market Analysis - Top Trends into 2012

Publication Overview

This annual publication provides analysis on the telecoms market moving into 2012 it includes forecasts, overviews and discussions on:

  • Trends in Global Telecoms
  • National Broadband Network
  • International broadband and trans-sector activities
  • Mobile communications market
  • Mobile broadband
  • The Internet of Things and cloud computing
  • Smart infrastructure (grids, transport, cities, buildings)
  • Digital media and social networks

Researchers:- Paul Budde, Kylie Wansink and Stephen McNamara
Current publication date:- July 2011 (24th Edition)

Executive Summary

Massive ubiquitous broadband and the Internet of Things

Key global trends moving into 2012

With the NBN and mobile broadband networks now well and truly underway it is important to look at what the real value of this new infrastructure will be.

The infrastructure that is now being built offers a range of features such as ubiquitousness, affordability, low latency, high speed and high capacity. It will link millions of devices, such as sensors, that will enable us to more efficiently and effectively manage our environment, traffic, infrastructures, and our society as a whole.

This ‘Internet of Things’ is going to be a real game-changer. It will transform every single sector of society and the economy and it will be out of this environment that new businesses – and indeed new industries – will be born. This is one of the reasons so many overseas ICT companies are increasing their presence in Australia. The NBN is an ideal test-bed for such developments. A great deal of attention is being paid to cloud computing and the NBN can be viewed as one gigantic cloud.

The development of cloud computing involves a business transition, and company strategies and policies will need to be changed before its potential can be monetised by businesses. A key factor here is that organisations will have to raise ICT from the level of an infrastructure issue to that of a business opportunity. Cloud computing will need to be seen as a valuable business tool – one that will differentiate a company from others.

The Australian National Broadband Network

The focus in Australia, however, is on the National Broadband Network. The year 2011 saw a watershed of developments, the highlight being the passing of the all-important legislation needed to establish the appropriate regulatory environment to support the rollout.

Furthermore, the government delivered on its trans-sector initiatives, with significant initiatives and policy decisions in the areas of e-health and smart grids. But much more is needed here.

All of this is setting the scene for an extraordinary amount of work. This has already commenced but it will explode over 2012 and beyond. The business opportunities across various sectors are enormous and the international telecoms market is following with great interest the developments in Australia, as they will set the scene for future telecoms developments around the world.

Australia will be the first country in the world where the whole industry will adopt a new plan for its future. In the past this was based on ad hoc decisions and there was little room for long-term planning. Competition survived on the crumbs that fell from the Telstra table, and on regulatory relief, which often took many years to arrive and was often too late to help a starving competitive environment. Uncertainty was a major obstacle. All decisions depended on Telstra and there was little hope for individual initiatives.

The single most important element of the National Broadband Network is that it will provide certainty about future direction. There will be problems, and the outcome will not be perfect, but for the first time individual companies are far more in charge of their own destiny.

Naturally these changes will not happen overnight and there will be a transitional period during which all parties (Telstra and its competitors) will have to cooperate – this will require some ‘give and take’.

In mid-2011 Telstra signed the final agreement with the government that will see it closing its own customer access network and leasing its infrastructure to NBN Co. The company continues with its major transition plan and also launched an $800 million investment in cloud computing.

The ongoing boom of mobile broadband

The mobile communications market in Australia, as in other developed economies, is continuing to see a further shift in emphasis from voice to more data-orientated services, driven by more new handsets and applications. Penetration has outstripped the size of the market, which indicates that people are increasingly using multiple services and multiple devices.

Mobile broadband has steadily become more popular, spurred on by the advent of smartphones from vendors like Apple, HTC and RIM. By mid-2011 close to half of the population owned a smartphone.

Competition between mobile operators is set to intensify, resulting in lower mobile call charges for customers. Telstra recently removed the gloves and increased its position in the market; this will produce a decrease in mobile prices. Furthermore, more customers will reduce their use of fixed-line voice and data services in favour of mobile services.

Digital media

We are getting a clearer view of where this media industry is headed. The picture is still a bit blurred but increasingly we see the traditional TV media concentrating on digital TV. Investment-wise, that is where their money is going. They have been unable to keep up with the digital media activities of the new players who are dominating the broadband content and services market.

We are starting to see other activities that we classify as part of the digital economy, such as e-commerce, e-health, e-learning and smart grids.

By mid-2011 the number of users of the social networking sites continues to grow, with over ten million Facebook users and more than 2.5 million twitter users in Australia.

Smart grids

The years 2009 and 2010 saw the implementation of new government policies that will form the basis for future developments. The Smart Grid/Smart City project will have a significant effect but, perhaps even more importantly, this government initiative has clearly been a wake-up call to all electricity companies to become more serious about their smart grid plans. Procrastination is no longer a viable option and all the electricity companies have now embarked on their own industry transformation plans and will be starting to implement the first elements of their smart grids.

The Carbon Price Scheme announced in 2011 will certainly stimulate new investments in the energy sectors. Green technologies and smart grids will attract billions of dollars’ worth of new investment.

Smart transport

Current intelligent transport systems technologies use dedicated short-range communications to transfer data over short distances between in-vehicle mobile radio units and roadside units – that is, fixed point-to-point services. Arrangements to facilitate the use of intelligent transport systems have been developed internationally in the 5850-5925MHz band (the 5.9GHz band), while in mid-2011 ACMA still classified this as a medium priority for finalisation.

Smart infrastructure is also being looked at in the context of the national broadband network, the aim of which is to provide the basic telecommunication infrastructure for a range of sectors, including transport. Special access is provided in the NBN Bill for utilities. In mid-2011, with a carbon tax due to commence in 2012, smart transport systems may also now be in a position to reduce the carbon footprint and energy use across many of the transport industries, while lowering GHG emissions at the same time.

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

Table of Contents

  • 1. Global Telecoms Market Overview
    • 1.1 Global telecoms market summary
    • 1.2 We need smarter governments to manage a changing global environment
      • 1.2.1 Civilisation in need of transformation
      • 1.2.2 Change needs to take place before disaster strikes
      • 1.2.3 Governments are not showing leadership
      • 1.2.4 Trans-sector policies are needed to penetrate the silo mentality
      • 1.2.5 New energy policies
      • 1.2.6 New directions needed for society and the economy
      • 1.2.7 Broadband – a utility for transformation
    • 1.3 Mobile sector increasingly reliant on smart phone growth
    • 1.4 Mobile broadband grows as consumers embrace apps
    • 1.5 Media companies need to disaggregate and rebuild
    • 1.6 Can telecoms lift us out of the GFC?
      • 1.6.1 Delivering trans-sector approaches
      • 1.6.2 Broadband and healthcare – depending on each other
    • 1.7 What will be hot in 2012?
      • 1.7.1 Mobile Comms and wireless broadband
      • 1.7.2 Broadband
      • 1.7.3 Digital Economy
      • 1.7.4 Trans-sector
    • 1.8 Telecoms and the Global Financial Crisis
      • 1.8.1 Market summary
      • 1.8.2 Investing in the Communications Revolution
      • 1.8.3 Co-development of fibre and the digital economy
      • 1.8.4 Infrastructure essential for the digital economy
    • 1.9 Broadband a platform for progress
      • 1.9.1 Commission aimed to influence heads of state
      • 1.9.2 Report is a starting point, not an end station
      • 1.9.3 Trans-sector concept based on sharing infrastructure
      • 1.9.4 Recommendations aimed at government leaders
      • 1.9.5 No reinvention – rather pushing implementation forward
      • 1.9.6 Platform for further work
      • 1.9.7 Private vs public approaches
      • 1.9.8 Technologies
  • 2. The National Broadband Network
    • 2.1 Industry analysis
      • 2.1.1 Introduction
      • 2.1.2 The world has changed
      • 2.1.3 Telstra agreement is setting the scene
      • 2.1.4 Other players will have to follow
      • 2.1.5 Effects on the ISPs
      • 2.1.6 Wireless ISPs
      • 2.1.7 M&As will be on the way
      • 2.1.8 Access business models set to change
      • 2.1.9 Penetration, not ARPU, is the key to success
    • 2.2 Market analysis
      • 2.2.1 Broadband market
      • 2.2.2 Triple play market
      • 2.2.3 Internet media
      • 2.2.4 Mobile market
    • 2.3 Overall size of the market
      • 2.3.1 Total broadband subscribers
      • 2.3.2 Subscribers by major providers/technology
      • 2.3.3 Market shares – 2010
    • 2.4 Key trends, developments and analysis
      • 2.4.1 Policies and politics
      • 2.4.2 Competition and Regulations
      • 2.4.3 Infrastructure developments
      • 2.4.4 NBN Co
      • 2.4.5 Trans-sector developments
      • 2.4.6 Investment opportunities
    • 2.5 Trans-sector model for the digital economy
      • 2.5.1 Analysis – 2010 - 2011
      • 2.5.2 Trans-sector developments
      • 2.5.3 Introduction to trans-sector thinking
      • 2.5.4 A matter of leadership
      • 2.5.5 Barriers to broadband adoption
      • 2.5.6 We lack the structures to implement trans-sector visions
      • 2.5.7 Next: smart cities, smart countries
      • 2.5.8 Trans-sector regulation
    • 2.6 Industry at a crossroads
      • 2.6.1 Transition of the telecoms industry
      • 2.6.2 Industry transformation
      • 2.6.3 NBN opportunities for the main players
      • 2.6.4 The submarine cable conundrum
    • 2.7 The NBN and Telstra
      • 2.7.1 Telstra and the National Broadband Network (NBN) after the election
      • 2.7.2 Telstra and government agree on NBN future
      • 2.7.3 Historic analysis
  • 3. Mobile Communications Market
    • 3.1 Key trends and developments
      • 3.1.1 Industry Overview
      • 3.1.2 Key trends and developments
      • 3.1.3 Background Information
    • 3.2 WiFi’s key role in mobile broadband
      • 3.2.1 WiFi starts playing a key role in telecoms
      • 3.2.2 Global WiFi market summary
      • 3.2.3 Other short-range technologies
  • 4. Digital Media Developments
    • 4.1 Industry overview
      • 4.1.1 The traditional media industry
      • 4.1.2 New business models for digital media
      • 4.1.3 Digital media regulation
    • 4.2 Social networks
      • 4.2.1 Social networks market summary
      • 4.2.2 Social Network trends in Australia
      • 4.2.3 Key social networks
      • 4.2.4 Statistical overview
      • 4.2.5 Mobile social networking
      • 4.2.6 Personal social networks
      • 4.2.7 Incorporating social media
      • 4.2.8 Conclusions and trends
  • 5. The Internet of Things
    • 5.1 Building smart communities and smart countries
      • 5.1.1 Stage one - infrastructure
      • 5.1.2 Stage two – trans-sector policies
      • 5.1.3 Stage three - the business game-changer
    • 5.2 Key trends and developments
      • 5.2.1 Deep packet inspection
      • 5.2.2 Ubiquitous Complex Event Processing
      • 5.2.3 Behavioural Attitudinal Geolocation
      • 5.2.4 Lifetime customer relationships
    • 5.3 Smart cities and smart countries
      • 5.3.1 Electricity companies and the Internet of Things
    • 5.4 How do we get there?
  • 6. Cloud Computing Insights
    • 6.1 Changing the CIO function
    • 6.2 What is cloud computing (CC) and what can it be used for?
    • 6.3 Cloud Computing (CC) is about business transformation
    • 6.4 Software as a service
    • 6.5 Cloud Computing (CC) = big business
    • 6.6 Recent trends
      • 6.6.1 GFC slows down cloud computing developments
      • 6.6.2 Cloud services drive data center markets
      • 6.6.3 Mobile Cloud Computing
      • 6.6.4 Cloud Computing for media and entertainment sectors
    • 6.7 Backgrounder information
      • 6.7.1 Cloud Computing generates huge interest
      • 6.7.2 Cloud Computing requires business strategies
      • 6.7.3 Cloud Computing in the trans-sector context
  • 7. Smart Infrastructure
    • 7.1 The smart grid market
      • 7.1.1 Key trends and developments
      • 7.1.2 New government initiatives
      • 7.1.3 Regulatory framework
      • 7.1.4 The Smart Grid Market – Analysis 2011
      • 7.1.5 Industry Surveys
      • 7.1.6 ICT solutions for global warming and energy saving
    • 7.2 Smart transport systems
      • 7.2.1 What are intelligent transport systems (ITS)?
      • 7.2.2 ITS Australia
      • 7.2.3 Industry developments
      • 7.2.4 Dedicated short-range communications (DSRC)
      • 7.2.5 Smart transport and the National Broadband Network (NBN)
      • 7.2.6 The Electric Vehicle (EV) market in Australia
    • 7.3 Smart cities, buildings and communities
      • 7.3.1 Introduction
      • 7.3.2 Building smart cities to ease the stress
      • 7.3.3 Key components of smart cities
      • 7.3.4 Strategies for smart communities
      • 7.3.5 Brief examples of smart communities
      • 7.3.6 North America
      • 7.3.7 Intelligent/smart technologies and systems
      • 7.3.8 Intelligent Communities Forum
  • 8. BuddeComm’s International Broadband and Trans-sector Activities
    • 8.1 The concept
      • 8.1.1 The birth of the trans-sector concept
      • 8.1.2 Australia – one of the first countries to develop trans-sector policies
      • 8.1.3 Smart grids and e-health – the first trans-sector projects
    • 8.2 Activities in other countries
      • 8.2.1 Support from President Obama and the FCC
      • 8.2.2 Trans-sector innovations in the Netherlands
      • 8.2.3 New Zealand
      • 8.2.4 The United Kingdom
      • 8.2.5 United Nations puts its weight behind trans-sector
    • 8.3 Briefing international investment houses
    • 8.4 BuddeComm proud of the part it is playing
  • 9. Glossary of Abbreviations
  • Table 1 – Worldwide smart phone mobile device sales – Q1 2010; Q2 2010
  • Table 2 – Worldwide smartphone operating systems by market share – 2007 - 2010
  • Table 3 - Top ten smart grid government investments
  • Table 4 – Worldwide telecom statistics at a glance – 2011
  • Table 5 – Worldwide broadband subscribers and annual change – 2005 - 2010
  • Table 6 – How investing in broadband can boost economies
  • Table 7 – Broadband subscribers – total market – 2003 - 2010
  • Table 8 – Broadband annual market – annual change – 2004 - 2010
  • Table 9 – Broadband subscribers – market shares (cable, ADSL, wireless totals) – 2004 - 2010
  • Table 10 - Broadband uptake* scenario forecasts 2015-2020
  • Table 11 - Broadband services uptake scenario forecasts – 2015 - 2020 (household penetration)
  • Table 12 - Total payments to be made to Telstra
  • Table 13 - NBN deal valuation cash flows ($)
  • Table 14 – Mobile market subscribers, penetration rate and annual change – 1995 - 2012
  • Table 15 – Total fixed mobile broadband revenues and annual change – 2007 - 2012
  • Table 16 – Total mobile services market revenue and annual change – 1993 - 2012
  • Table 17 – Number of WiFi mobile handset shipments worldwide – 2009 – 2010; 2015
  • Table 18 – Number of WiFi hotspots worldwide – 2005; 2007; 2009; 2011
  • Table 19 – Number of public WiFi hotspots – top 10 countries worldwide – mid-2009; early 2011
  • Table 20 – Installed base of Bluetooth devices worldwide – 2005; 2007; 2010; 2011
  • Table 21 – Top social networking sites in Australia – 2009 - 2011
  • Chart 1 –Worldwide mobile subscriber growth – 2008 - 2011
  • Chart 2 – Safaricom M-Pesa and data revenue breakdown – 2009/10
  • Chart 3 – Global fixed broadband subscriber growth 2007 - 2010
  • Chart 4 – Global Fixed Broadband and Mobile Subscriber Growth – 2007 -2010
  • Chart 5 – Total broadband subscribers and annual change – 2000 - 2011
  • Chart 6 – Mobile market subscribers, penetration rate and annual change – 1993 - 2012
  • Chart 7 - Total fixed mobile broadband revenues and annual change - 2007-2012
  • Chart 8 - Total mobile services market revenue and annual change - 1993-2012
  • Chart 9 – WiFi hotspot growth – 2005; 2007; 2009; 2011
  • Exhibit 1 – Key app store competitors1 – 2011
  • Exhibit 2 – Examples of countries with planned ICT infrastructure investment – 2009
  • Exhibit 3 – Open networks
  • Exhibit 4 - Broadband Commission Declaration 2010: Broadband Inclusion for All
  • Exhibit 5 - United Nations Millennium Development Goals
  • Exhibit 6 - Recommendations and proposed plan of action
  • Exhibit 7 – Economic effects of trans-sector broadband
  • Exhibit 8 – Wi-Fi Direct
  • Exhibit 9 – Bluetooth SIG
  • Exhibit 10 – Foursquare
  • Exhibit 11 - The Obama campaign
  • Exhibit 12 – Examples of Web 2.0 developments
  • Exhibit 13 – Definition: Cloud computing
  • Exhibit 14 – Microsoft’s cloud computing business model
  • Exhibit 15 – Amazon Web Services
  • Exhibit 16 – Retail price rises in 2010 compared with annual bill in July 2009
  • Exhibit 17 – eTags and tolls overview – 2011
  • Exhibit 18 - Learning from e-cars
  • Exhibit 19 – Smart City – Masdar City – Abu Dhabi
  • Exhibit 20 – Smart Homes
  • Exhibit 21 – Example of trans-sector collaboration in a Smart City
  • Exhibit 22 – Smart shopping
  • Exhibit 23 – Oncor (TXU) and the Current Group – Texas
  • Exhibit 24 – Pacific Gas & Electric (PG&E) – California
  • Exhibit 25 – Xcel Energy’s Smart Grid City
  • Exhibit 26 – Southern California Edison, California
  • Exhibit 27 – American Recovery and Reinvestment Act 2009
  • Exhibit 28 – Learning from e-cars

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