2014 Australia - Mobile Communications - Statistics and Forecasts

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