This report provides overviews, analyses and statistics on the key Australian telcos Telstra, Optus and Vodafone Australia.
The 2nd Tier Telcos are covered in a separate report -Australia - Telco Company Profiles - 2nd Tier
Researchers:- Henry Lancaster, Phil Harpur
Current publication date:- December 2015 (21st Edition)
Telstra remains the master of the game
Telstra continues to dominate the overall Australian telecom market, holding about 62% market share by revenue. Market share in some sectors, such as broadband, has been falling steadily since the highs that it held in the early 2000s, though the company has retained its dominance in segments such as mobile voice and data. Telstra invested heavily in network upgrades and was the first to launch mobile data services based on LTE. As such it was in a position to capitalise on being the first player in this market and could reap the advantages of network performance and reach to attract new customers. These advantages diminished in 2015 as Optus and Vodafone also launched LTE services, though Telstra retains a key lead in the provision of fixed-line broadband services in the less heavily urbanised areas.
Telstra has embraced the new direction being taken by some of the more progressive players in the telecoms industry. This is based on a ubiquitous, robust, affordable infrastructure that can be used to lift telecommunications into the next stage. This is the brave new world of internet media, of the Internet of Things, where a range of new industry sectors including healthcare, education, energy, commerce and media will take centre-stage. The company is also a leader in the industry with a focus on the customer, innovation and new business opportunities. It is not only financial strong, it is also well-positioned to increase its business in the emerging digital, sharing and networking economy. It is successfully transforming itself into a full services ICT company. Telstra’s mobile network in particular is, and will continue to be, well-positioned to offer superior services to those offered by the NBN company.
Life has been tough for Australia’s second largest telco Optus in recent years. It has lost its sparkle, and has been struggling, not only to keep pace with Telstra but also to keep up with the rapid developments in the telecoms industry. The mobile sector clearly remains the company’s key market, although both its market share and ARPU are under pressure. Optus has kept up with Telstra, with both operators securing valuable spectrum in the 700MHz band. Next on the list is 5G. Optus is also committed to matching Telstra’s 98% population coverage with LTE by the end of 2016.
Network upgrades continue for Vodafone and new sites are being added across Australia as the company ramps up its investment in infrastructure in a bid to retain customers. The operator launched LTE services, being able to compete with Optus and Telstra in this market which has tremendous growth potential. However the company has no plans to enter the fixed-line sector. Instead, it is channelling investment to upgrade existing networks, placing it at a considerable disadvantage over its competitors. Vodafone has managed to halt the decline of its local subscriber base but penetration levels remaining significantly below levels of several years ago.
Telstra is Australia’s largest telecommunications provider offering a full range of telecom services throughout Australia. The company provides basic access services to most homes and businesses, local and long-distance telephone call services, and mobile and internet services. Wholesale services are also provided to ISPs and RSPs while advertising and subscription television services are provided through subsidiary companies. Several strategic investments undertaken over the past few years have strengthened Telstra’s position in the e-health services market.
In total, over three years to June 2017 Telstra expects to have invest more than $5 billion into Telstra’s mobile network. Telstra will start rapidly deploying the next generation of LTE technology including voice over LTE, LTE broadcast and the next stage of LTE advanced delivering peak network speeds of up to 600 Mb/s. Telstra continues to expand into emerging technology areas such as e-Health. Telstra has recently completed 15 acquisitions and partnerships in electronic prescriptions, remote diagnostics, secure health record keeping and telematics.
Optus provides a range of communications services that include mobile, national and long-distance services, local and international telephony, business network services, internet and satellite services, subscription TV and digital media services. The company is aiming to expand its customer base through offering new services including MeTV, an IPTV service with FetchTV. It has expanded mobile coverage has launched 4G services and has signed an agreement with NBN Co to operate satellites to provide rural broadband coverage. These new and additional services will allow Optus to gain new subscribers across its coverage areas and extend their availability to more remote and regional communities.
In late 2015 Optus was reported to start winning market share again in the mobile market. The new direction taken by the NBN, offering a second-rate multi-technology network rather than one based on FttH, might offer the company new opportunities. Optus offers key services based on its fixed-line cable infrastructure as well as its upgraded mobile networks. The ACCC has given the final approval to a revised agreement for the transition of Optus' HFC customers onto the NBN, and the progressive acquisition and integration of parts of the telco's network with the NBN. Optus’ parent Singtel has pledged to boost its investment in the telco to $1.8 billion over the next year to improve Optus's mobile network and increase its share in the fixed-line market.
Vodafone is the third-largest mobile carrier in Australia, being formed as a 50/50 joint venture in 2009 following the merger of Vodafone Australia and Hutchison 3G Australia. Vodafone offers a comprehensive suite of prepaid and postpaid mobile voice and mobile data products to both consumer and business customers. MVNO services are also provided to other telecommunication service providers. Under a new Vodafone Australia has revealed a new three-year plan centred around adding value to services, bundling content and broadening Vodafone’s retail distribution network.
Vodafone has managed to halt the decline of its local subscriber base but penetration levels remaining significantly below levels of several years ago. The company remains at a disadvantage for not having bid for spectrum in the 700MHz band. To counter this, Vodafone refarmed its spectrum holdings in the 850MHz band, thus delivering LTE to 95% of the metro population. More than 50 per cent of Vodafone's data traffic is now carried over 4G. Vodafone’s 5G network is scheduled to be rolled out beginning from 2021.
In late 2015 TPG Telecom and VHA partnered in two new deals worth in excess of A$1 billion. Under the first deal TPG will embark on a major dark fibre transmission network expansion for VHA.