2014 Australia - Mobile Communications - Statistics and Forecasts

Publication Overview

BuddeComm’s Australia - Mobile Communications - Statistics and Forecasts annual publication provides information and insight into the mobile communications sector in Australia with a particular reference to mobile infrastructure and voice services as mobile broadband is covered in a separate report. This report provides an analysis of high-level revenue, market shares and revenue growth, as well as revenue earned from mobile voice and mobile data services. It covers:

  • The market in 2014
  • Industry overview
  • Subscriber statistics
  • Revenue overview and statistics
  • Latest developments in mobile spectrum
  • 3G and 4G infrastructure
  • Retail market
  • Smartphone market
  • Mobile satellite services 

For Mobile Broadband research see separate report: Australia - Mobile Broadband Market - Insights and Analysis

Researchers:- Paul Budde, Henry Lancaster
Current publication date:- July 2014 (14th Edition)

Executive Summary

Focus for investment among MNOs shifts to supporting high-end mobile data services

This report provides data and analyses on Australia’s developing mobile market. It covers a wide range of subjects including a core overview of the market, an overview of operators’ subscriber statistics and revenue, and an assessment of spectrum usage, particularly in the light of recent auctions. The report also assesses the fast developing smartphone market and the implications which the promotion of new and cheaper devices is having on the retail sector. Developments in 3G network infrastructure and in mobile satellite networks are also covered.

Network operator strategies fixed on LTE to maintain revenue from mobile data services

The major mobile network operators – Telstra, Optus, and Vodafone – are capitalising on consumer use of mobile broadband which has taken off during the last few years. The trend will continue as a result of the cyclical introduction of a widening range of affordable devices, as well as the growing footprint of LTE networks which should cover 98% of the population (from two MNOs at least) by the end of 2016.

Subscriber growth maintained...

The number of mobile subscribers continues to grow steadily, with mobile penetration reaching 135% by mid-2014. Continued growth, though slower than in former years, will be maintained by the significant proportion of subscribers who make use of multiple phones or SIM cards, compounded by a steady increase in the population. Operators can also expect to benefit from further migration among consumers from fixed-line to mobile telecoms. While growth is likely to continue in the next few years as subscribers take to smartphones, this will slow in line with higher penetration, being about 2% into 2015.

Telstra remains the market leader with about 16 million subscribers in mid-2014, while Optus had around 9.4 million. Vodafone has continued to see a decline in subscriber numbers, to 4.96 by March 2014, though since late 2013 losses have been significantly lower than was seen in 2012 and early 2013.

... though continuing pressure on revenue

Overall mobile services revenue among MNOs continues to come under competitive pressure. Telstra and Optus into 2015 will be better placed to capitalise on their 700MHz concessions, and so further develop their LTE subscriber base and revenue derived from mobile data services, while Vodafone will remain under strain as a result of continuing subscriber losses and the failure of the operator to compete for this valuable spectrum asset. Compounding these pressures is the recent decision by the ACCC to regulate the pricing of wholesale SMS tariffs.

BuddeComm expects that revenue from MNOs will be flat in 2015. Future revenue growth will be impacted by continuing activity from a number of the larger MVNOs, as some of the smaller failed operators are removed from the market.

For the MNOs, the latest results are mixed, with only Telstra (to December 2013) among the three operators having reported revenue growth. Optus reported a 5.7% fall in mobile revenue in FY2014, while VHA continued to experience steep revenue declines on the back of customer disaffection with service offerings.

Spectrum assets a key to future service offerings

Following a dormant period between 2007 and 2011, a number of significant auctions have since been held, particularly in the 2.3GHz and 2GHz bands for regional and rural areas. The auction of digital dividend spectrum in 2013 will enable mobile operators, chiefly Optus and Telstra, to make use of their 700MHz concessions when these become available in early 2015

Mobile infrastructure gearing from 3G to 4G

The three MNOs began building their 3G networks in earnest in the mid-2000s, resulting in the rapid take-up of 3G among consumers as they migrated from 2G networks. This development is now being reported with the transition from 3G to 4G/LTE. The near comprehensive reach of LTE expected by the end of 2016 will see a growing proportion of subscribers using LTE-based services. This will be facilitated by competitive pressure for operators not to charge a premium for LTE connectivity, a trend which has been seen in many markets globally.

Improved infrastructure going hand-in-hand with the growing smartphone and tablet market

Smartphone use in Australia continues to grow among consumers. There has also been a change in the popularity of certain handsets, with a marked shift towards Android based-phones at the expense of Apple iOS. This has largely resulted from the greater number of manufacturers and styles for the Android platform, thus providing a wide range of pricing points.

Smartphones and tablets are increasingly being used to access the internet. These devices account for a growing proportion of data accessed via the mobile and WiFi environments. Smartphone penetration reached about 90% by mid-2014, while surveys have shown that about 60% of respondents have a tablet. These figures will increase steadily into 2015 as a greater number of competitively priced units hit the market, and as the reach of LTE networks widen

Key developments:

Analysis on mobile user productivity; MVNO market receives shakeup with the collapse of smaller operators; tablet penetration approaches 60%; Australian police forces adopts tablets on the beat; Police Federation continues to lobby for use of 20MHz in the 700MHz band; Vodafone continuing to lose subscribers despite improved network performance; includes market developments to mid-2014; telcos’ financial and operating updates to March 2014; market developments to mid-2014.

Companies covered in this report include:

Optus, Telstra, Mobile Muster, Motorola, Apple, Nokia, BlackBerry, HTC, Google, Sony Ericsson, Samsung, Vodafone, 3, Amaysim, Woolworths, Crazy John’s, JB HiFi, NBN Co, Virgin Mobile, Aldi Mobile; Huawei, Lebara, AAPT, Kogan Mobile, GRLmobile, Red Bull Mobile, Macquarie Telecom, Boost Tel, Pivotel, Globalstar, AUSTAR, Walker Wireless, ActewAGL 

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. The Market in 2014
    • 1.1 Industry overview
      • 1.1.1 Background information
      • 1.1.2 Subscriber statistics
      • 1.1.3 Mobile coverage remains major problem for the region
      • 1.1.4 Rural Australia in favour of NBN mobile services
      • 1.1.5 Consumer rip-off stops with new Telecommunications Consumer Protection Code
      • 1.1.6 Mobile calling plan standardisation a start to a clearer choice
      • 1.1.7 Roaming
      • 1.1.8 NBN as backhaul
      • 1.1.9 Mobile technology boost productivity
    • 1.2 Mobile Network Operators (MNOs)
      • 1.2.1 Telstra
      • 1.2.2 SingTel Optus
      • 1.2.3 Vodafone Hutchison Australia (VHA)
    • 1.3 Network technologies
      • 1.3.1 HSPA-based services
      • 1.3.2 Long-term Evolution (LTE)
      • 1.3.3 2G services (historic)
    • 1.4 Mobile Virtual Network Operators (MVNOs)
      • 1.4.1 Background on the MVNO sector
      • 1.4.2 Market overview
      • 1.4.3 Other developments in the MVNO market
      • 1.4.4 Amaysim
      • 1.4.5 Red Bull Mobile
      • 1.4.6 Kogan Mobile
      • 1.4.7 Aldi Mobile
      • 1.4.8 Lebara Mobile
      • 1.4.9 Macquarie Telecom
      • 1.4.10 Virgin Mobile
      • 1.4.11 Woolworths Mobile
    • 1.5 Mobile resellers
      • 1.5.1 Background information
      • 1.5.2 Resellers on the Telstra network
      • 1.5.3 Resellers on the Optus network
      • 1.5.4 Resellers on the Vodafone network
    • 1.6 Mobile Virtual Network Enablers (MVNEs)
      • 1.6.1 Background information
      • 1.6.2 Pivotel
      • 1.6.3 M2 Telecommunications Group (separate report)
  • 2. Revenue Overview and Statistics
    • 2.1 Statistical sources
    • 2.2 Total mobile services revenue and forecasts
      • 2.2.1 Overview of current year
      • 2.2.2 Moving into 2015
    • 2.3 Operator revenue statistics overview
      • 2.3.1 Background
      • 2.3.2 Revenue per major operator
      • 2.3.3 Revenue trends
      • 2.3.4 Revenue share
      • 2.3.5 Revenue by service
    • 2.4 Average revenue per user (ARPU)
      • 2.4.1 Overview of ARPU
      • 2.4.2 Blended ARPU
      • 2.4.3 Historic ARPU statistics
  • 3. Subscriber Statistics
    • 3.1 Statistical sources
    • 3.2 Mobile subscriber statistics
      • 3.2.1 Total subscribers and annual growth rates
      • 3.2.2 Operator market shares and growth
      • 3.2.3 2G, 3G and 4G subscribers
      • 3.2.4 Prepaid and postpaid subscribers by operator
      • 3.2.5 Wholesale market
  • 4. Retail Market
    • 4.1 An overview of the mobile retail market
      • 4.1.1 Major retail categories
      • 4.1.2 Retail margins
      • 4.1.3 Retail revenues
      • 4.1.4 Consolidation
      • 4.1.5 The move from prepaid to postpaid
      • 4.1.6 Mobile broadband (separate report)
      • 4.1.7 Superior customer care to come from a new TCP Code
      • 4.1.8 Mobile calling plan standardisation a start to a clearer choice
      • 4.1.9 Replacement market
      • 4.1.10 Wholesale aggregators
    • 4.2 Major mobile retail companies
      • 4.2.1 Background information
      • 4.2.2 Vertically integrated operators
      • 4.2.3 Independents retailing services exclusively for mobile operators
      • 4.2.4 Independents retailing services for a variety of network operators
  • 5. 3G and 4G Infrastructure
    • 5.1 Background information
    • 5.2 Network operators
      • 5.2.1 Telstra
      • 5.2.2 Optus
      • 5.2.3 VHA
    • 5.3 Mobile sites infrastructure
      • 5.3.1 Overview and statistics
      • 5.3.2 Crown Castle
    • 5.4 Infrastructure analysis
      • 5.4.1 Structural separation and open networks
      • 5.4.2 Squeezed out of the content markets
      • 5.4.3 Mobile broadband market
    • 5.5 Long-term evolution (LTE) (separate report)
  • 6. Spectrum Overview
    • 6.1 Overview
    • 6.2 Spectrum regulations
      • 6.2.1 Background information
      • 6.2.2 Australian Radiofrequency Plan
    • 6.3 ACMA five-year outlook – 2012 - 2016
      • 6.3.1 Spectrum demand overview
      • 6.3.2 Towards 2020 – Future spectrum requirements
      • 6.3.3 Regulatory issues
      • 6.3.4 Fifteen-year spectrum licence pathway
      • 6.3.5 ACMA takes steps to improve spectrum trading arrangements
    • 6.4 Spectrum-based services
      • 6.4.1 Background information
      • 6.4.2 Mobile services
      • 6.4.3 WiMAX wireless services
      • 6.4.4 Ultra-Wideband services (UWB)
      • 6.4.5 New broadband wireless technology
    • 6.5 Spectrum ownership and licences
      • 6.5.1 Mobile spectrum
      • 6.5.2 Apparatus licences
      • 6.5.3 Unlicensed spectrum (IMS)
  • 7. Spectrum Auctions
    • 7.1 Mobile spectrum auctions
      • 7.1.1 Introduction
      • 7.1.2 Digital dividend auction – 2013
      • 7.1.3 500MHz frequency
      • 7.1.4 800MHz and 1.8GHz frequencies
      • 7.1.5 1880-1920MHz (1.9GHz) frequency
      • 7.1.6 2010-2025MHz frequencies
      • 7.1.7 2.3GHz band
      • 7.1.8 Unused 2GHz spectrum
      • 7.1.9 3.4GHz frequencies
      • 7.1.10 3G Auctions
  • 8. Smartphones, Tablets and Handset Market
    • 8.1 Market overview
      • 8.1.1 Trends in mobile handset market
      • 8.1.2 4G market continues to grow
      • 8.1.3 Telstra’s T-Hub 2 – moving fixed-line customers to the future NBN
    • 8.2 Predictions into 2014 and beyond
      • 8.2.1 Smartphone data usage increasing
      • 8.2.2 Tablets and e-readers
    • 8.3 Smartphone, tablet and handset statistics
      • 8.3.1 Shipments
      • 8.3.2 Handset recycling
      • 8.3.3 Handset supplier market shares
      • 8.3.4 Smartphones and internet usage
      • 8.3.5 Tablet sales thriving
    • 8.4 Analysis
      • 8.4.1 Mobile vendors set to lose the proprietary battle
      • 8.4.2 Mid-tier mobile phones to decline
    • 8.5 Market surveys
      • 8.5.1 Overview
      • 8.5.2 Smartphones outgrow mobile market
      • 8.5.3 Smartphones lead to higher data spend
      • 8.5.4 Smartphone users are action buyers
      • 8.5.5 Tablet usage increasing
      • 8.5.6 Android remains the favoured operating system
    • 8.6 The future of the smartphone market
      • 8.6.1 Hardware becomes a utility platform
      • 8.6.2 Platform for innovation and industry transformation
      • 8.6.3 Breaking into new markets
      • 8.6.4 Who will dominate the WiFi market?
      • 8.6.5 Conclusion
  • 9. Mobile Satellite Services
    • 9.1 Mobile satellite services
      • 9.1.1 Introduction
      • 9.1.2 Second generation satellites with Globalstar to benefit rural Australians
      • 9.1.3 Twitter on satellite phones
    • 9.2 Public subsidies and regulation
      • 9.2.1 Overview
      • 9.2.2 Mobile satellite service band plan
      • 9.2.3 Mobile satellite phone subsidies
    • 9.3 Overview of operators
      • 9.3.1 Telstra
      • 9.3.2 Optus
      • 9.3.3 Pivotal Group
      • 9.3.4 VIX QuikTrak
      • 9.3.5 AST Australia
      • 9.3.6 Addcom
      • 9.3.7 Indigo Telecom
      • 9.3.8 FedSat – Australia’s low earth orbit satellite (historic)
    • 9.4 Usage and revenue estimates
      • 9.4.1 Background information
      • 9.4.2 Revenue
      • Table 1 – Mobile market subscribers, penetration rate and annual change – 2010 - 2014
      • Table 2 – Total mobile services market revenue and annual change – 2010 - 2014
      • Table 3 – Optus revenue – 2012 - 2014
      • Table 4 – Pivotel Globalstar satellite data costs – July 2014
      • Table 5 – Historic - Total mobile services market revenue and annual change – 1993 - 2004
      • Table 6 – Total mobile services market revenue and annual change – 2005 - 2014
      • Table 7 – Telstra mobile services revenue – 2009 - 2014
      • Table 8 – Vodafone Australia revenue – 2009 - 2013
      • Table 9 –Optus key financial indicators – 2009 - 2014
      • Table 10 – Optus mobile service revenue – 2013 – 2014
      • Table 11 – Historic - Mobile market revenue per major operator – 1993 - 2004
      • Table 12 – Mobile market revenue per major operator – 2005 - 2014
      • Table 13 – Historic - Annual change of mobile market revenue per major operator – 1994; 1997; 2000 - 2004
      • Table 14 – Annual change of mobile market revenue per major operator – 2005 - 2014
      • Table 15 – Annual change of mobile market share per major operator – 2000 - 2014
      • Table 16 – Estimated mobile service revenue by service, proportion of total – 2007 - 2014
      • Table 17 – Total mobile voice revenue per major operator – 2007 - 2014
      • Table 18 – Mobile voice revenue as a proportion of total mobile services revenue – 2007 - 2015
      • Table 19 – Mobile data revenue per major operator – 2007 - 2014
      • Table 20 – Annual change in data revenue per major operator as a proportion of total mobile services revenue – 2008 - 2012
      • Table 21 – Blended monthly ARPU by MNO – 2000 - 2014
      • Table 22 – Annual change in blended monthly ARPU by MNO – 2004 - 2014
      • Table 23 – Postpaid ARPU per month – Telstra, Optus and Vodafone – 2004 - 2014
      • Table 24 – Mobile market subscribers, penetration rate and annual change – 2000 - 2014
      • Table 25 – Historic - Mobile subscribers by carrier – 1993; 1997; 2000 - 2004
      • Table 26 – Mobile subscribers by carrier – 2005 - 2014
      • Table 27 – Historic - Annual change of mobile subscribers by carrier – 1995; 1997; 2000 - 2004
      • Table 28 – Annual change of mobile subscribers by carrier – 2005 - 2014
      • Table 29 – Historic - Mobile subscriber market share by carrier – 1993; 1997; 2000 - 2004
      • Table 30 – Mobile subscriber market share by carrier – 2010 - 2014
      • Table 31 – 3G mobile subscribers by carrier – 2003 - 2013
      • Table 32 – Annual change of 3G mobile subscribers by carrier – 2007 - 2013
      • Table 33 – Proportion of 3G mobile subscribers versus total subscribers by carrier – 2006 - 2013
      • Table 34 – 2G mobile subscribers by carrier – 2006 - 2013
      • Table 35 – Annual change of 2G mobile subscribers by carrier – 2006 - 2013
      • Table 36 – Prepaid subscribers by mobile network operator – 2008 - 2014
      • Table 37 – Number of mobile phone services in operation - prepaid and postpaid – 2006 - 2014
      • Table 38 – Wholesale subscribers – Telstra versus Optus – 2006 - 2013
      • Table 39 – Selected retailers – number of outlets by state
      • Table 40 – The wholesale market in Australia - key players - 2014
      • Table 41 – Mobile base stations – 2009; 2011 - 2012
      • Table 42 – Crown Castle mobile tower acquisitions – 2000 - 2012
      • Table 43 – The 500MHz spectrum licences – 1997
      • Table 44 – Spectrum charges for spectrum bandwidth licenses expiring in 2013
      • Table 45 – Smartphone ownership by age group – 2013
      • Table 46 – Internet connections via mobile handsets – 2009 - 2013
      • Table 47 – Australian handset shipments (historic) – 2004 - 2008
      • Table 48 – Australian handset shipments – 2009 - 2014
      • Table 49 – Key recycling indicators – Mobile Muster – 2006 - 2013
      • Table 50 –Australian handset brand market share – major suppliers – 2008 - 2013
      • Table 51 – Australian 3G handset market (historic) – by major operator – 2008 - 2010
      • Table 52 – Use of advanced phone features – % of mobile user accesses of rich media/smartphone features - 2013
      • Table 53 – Top 5 uses of mobile internet – 2009 - 2013
      • Table 54 – Estimated tablet users – 2010 - 2012; 2015 - 2016
      • Table 55 – Low-end, mid-tier and high-end mobile device markets – percentage of units sold – 2007; 2013.
      • Table 56 – Apps info and payment plan data – 2009 - 2013
      • Table 57 – Monthly phone spend on services – 2010 - 2013
      • Table 58 – Types of use on smartphones – 2012 - 2013
      • Table 59 – Smartphone app use by age group – 2013
      • Table 60 – Typical selected usage pattern of a tablet user – 2012 - 2013
      • Table 61 – Estimated Australian platform market share – 2008 - 2014
      • Table 62 – Pivotel Globalstar satellite data costs – July 2014
      • Table 63 – Estimate mobile satellite users – 2007 - 2014
      • Table 64 – Optus satellite revenue – 2007 - 2014
      • Chart 1 – Mobile market subscribers, penetration rate and annual change – 2010 - 2014
      • Chart 2 – Overview of total mobile services market revenue and annual change – 2010 - 2014
      • Chart 3 – Overview of total mobile services market revenue and annual change – 2005 - 2014
      • Chart 4 – Overview of Vodafone Australia revenue – 2009 - 2013
      • Chart 5 – Overview of mobile market revenue per major operator – 2005 - 2014
      • Chart 6 – Overview of annual change of mobile market revenue per major operator – 2005 - 2014
      • Chart 7 – Overview of mobile revenue share per major operator – 2000 - 2014
      • Chart 8 – Overview of mobile service revenue voice versus data – 2007 - 2014
      • Chart 9 – Overview of total mobile voice revenue per major operator – 2007 - 2014
      • Chart 10 – Overview of mobile voice revenue as a proportion of total mobile services revenue – 2007 - 2014
      • Chart 11 – Overview of total mobile data revenue per major operator – 2007 - 2014
      • Chart 12 – Overview of annual change in mobile data revenue per major operator – 2008 - 2014
      • Chart 13 – Overview of blended monthly ARPU by MNO – 2005 - 2014
      • Chart 14 – Overview of prepaid ARPU per month – Telstra, Optus and Vodafone – 2004 - 2014
      • Chart 15 – Overview of mobile market subscribers versus population – 2005 - 2014
      • Chart 16 – Overview of mobile subscribers by carrier – 2005 - 2014
      • Chart 17 – Overview of annual change of mobile subscribers by carrier – 2005 - 2014
      • Chart 18 – Overview of Australian handset shipments – 2009 - 2014
      • Chart 19 – Overview of tonnes of mobile equipment collected versus public awareness – 2006 - 2013
      • Chart 20 – Overview of the trends of the top five uses of mobile internet – 2009 - 2013
      • Exhibit 1 – The initial analogue operators – brief historic background
      • Exhibit 2 – MVNO models
      • Exhibit 3 – MVNO opportunities
      • Exhibit 4 – Mobile carriers and selected MVNOs – 2014
      • Exhibit 5 – Examples of key MVNO customer segments
      • Exhibit 6 – Amaysim at a glance
      • Exhibit 7 – Mobile carriers and selected resellers and MVNEs
      • Exhibit 8 – An overview of Boost Tel
      • Exhibit 9 – Pivotel Communications Pty Limited at a glance
      • Exhibit 10 – Background information on the 3G race by the MNOs
      • Exhibit 11 – Strathfield Group – a brief background look at its services
      • Exhibit 12 – 700MHz reallocation – 2011 - 2014
      • Exhibit 13 – Digital dividend spectrum
      • Exhibit 14 – Proposed 2.5GHz reallocation – 2011 - 2016
      • Exhibit 15 – Allocations for wireless access services (WAS) – 2009
      • Exhibit 16 – Mobile spectrum by operator in capital city and regional area
      • Exhibit 17 – GSM services by operator
      • Exhibit 18 – WCDMA services by operator
      • Exhibit 19 – Ownership of selected frequencies for 2.3GHz and 3.4GHz services – 2014
      • Exhibit 20 – An overview of the digital dividend auction timeline – 2010 - 2015
      • Exhibit 21 – 700MHz and 2.5GHz auction results – 2013
      • Exhibit 22 – Companies initially showing interest in the 800/1800MHz auctions
      • Exhibit 23 – Catapult
      • Exhibit 24 – Auction results
      • Exhibit 25 – Final 1.8GHz spectrum auction results
      • Exhibit 26 – The 1900-1920MHzGHz spectrum auction results
      • Exhibit 27 – The 2.3GHz spectrum auction results – 2011
      • Exhibit 28 – 3.4GHz initial bidders – August 2000
      • Exhibit 29 – Final 3.4GHz – October 2000
      • Exhibit 30 – 3G auction results per bidder – 2001
      • Exhibit 31 – Pivotel Communications Pty Limited at a glance

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