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2008 Australia - Broadband Market - Overview and Statistics

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Last updated: 28 May 2008 Update History

Report Status: Archived

Report Pages: 137

Analyst: Stephen McNamara

Publication Overview

For those needing high level strategic information and objective analysis of Australia’s fixed broadband market in Australia, this report provides essential reading and gives in-depth information on:

  • Statistical overviews on subscribers, revenues, market shares, forecasting and international rankings.
  • Competitive information on the market, the industry and the players.
  • Overview of the real innovators in this market and what are they offering.
  • How the market should operate in order to increase investments, maximize the value of the infrastructure and open up new revenue streams.
  • Insight into the market and the industry: ADSL, ADSL2+, DSLAMs, VDSL, cable modems, FttH and FttN.
  • Unravelling of the infrastructure debate and an indication of what is really needed, and when.
  • Analyses of the Government and Opposition plans and policies – the government’s role needs to change significantly, especially in relation to the provision of regional infrastructure.
  • Market surveys and statistical overviews of the business and residential markets, assisting customers to make their own assessments for their own organizations.

Researcher:- Phil Harpur, Paul Budde

Current publication date: May 2008 (7th Edition)

Next publication date: May 2009

 

 

Executive Summary

Broadband is seen as being vital to both the economy and the community. BuddeComm estimates that it will add over $100 billon to the Australian economy over the next ten to fifteen years, by organisations that will use broadband as a critical element in their business model; in the distribution of their services to their customers; and as a communication, electronic marketing and electronic production tool. Savings in health care, education and energy needs to be added to this list.

All this requires proper planning and government and industry debates. Within the next two to three years most Internet households will be based on broadband. However, it will not be until other broadband devices are available, over the next five years, that broadband will spiral beyond the Internet households.

Because the rest of the world is progressing much more quickly (Australia is still running approximately 2 years behind its counterparts), Australia is losing out on competitive advantage. Furthermore, the Australian people are missing out on important lifestyle improvements. The key factor for this failure however, is moving from technology to affordability. While the technology has become available (ADSL2+), the price is too high for 60%+ of current broadband users.

Recent regulatory changes have also seen the ACCC putting its emphasis on facilities-based competition (ULL and DSLAMs) rather than on resale. This further undermines the position of not just the smaller ISPs, but also of the larger ISPs, like Primus and AAPT, which have significant numbers of resale customers. For more information, see chapter 1.2, page 2.

After having struggled for nearly a decade to get ULL implemented, it is rather ironic that the government has now proposed to close this level of competition with its National Broadband Network Request for Proposal. While the Minister recognizes the problem and has indicated that he will address it, there are currently no guarantees that the current ULL/DSLAM environment will be secured. Without any structural changes proposed under the RFP either, it is very much in Telstra’s interest to build as quickly as possible a new monopoly, this time based on FttN.

As it currently stands ULL and its DSLAM infrastructure will become obsolete once the FttN network is in place. It is most likely that this will happen in metro Australia within a very few short years. In regional areas the copper-based network will of course linger on for many more years, as it will be far more economically difficult to upgrade the infrastructure here. For more information, see chapter 3.3.4.1, page 62.

At the same time the government is fully aware of the effects that this will have on competition and it is more than likely that a compromise will be struck on the issue.

Key highlights

  • The total number of broadband subscribers reached 4.4 million by mid-2007, a 29% increase over the 12 months. This compares with a 64% increase in subscribers to mid-2006.
  • For the 12 months to mid-2008 the annual growth should slow down further to 19%, to reach around 5.2 million broadband subscribers. For more information, see chapter 1.1.5, page 2.
  • Broadband subscriber growth started to slow down in 2007, and will taper off further during the 2008 to 2010 period. Australia is still trailing two years behind penetration levels in Europe and Asia.
  • The market is beginning to approach the natural broadband subscriber ceiling of around 7 million subscribers. For more information, see chapter 4.1, page 73.
  • In the retail market, Telstra ADSL constituted about 34% of the market in 2007 and resellers took about 49% of the retail market. Telstra Cable and Optus Cable constituted around 7% of the market each and other operators, around 4% of the market.
  • By 2015 we estimate that the broadband market (including digital media) will have grown to around $45 billion, by which time it will have absorbed what we now call the data communications market as well.
  • Approximately 90% of Australia’s national network could feasibly be upgraded with an FttH rollout. We believe this will ultimately happen over a 10-year period to 2018; the remainder of the national network will need to be serviced by wireless and satellite access providers.

Broadband subscribers – market shares by operators – retail values – 2004 - 2009

Service

2004

2005

2006

2007

2008 (e)

2009 (e)

Market share of category (mid-year)

Telstra ADSL

35.3%

26.0%

29.2%

34.1%

34.4%

34.6%

ADSL retailers

37.7%

50.0%

50.9%

46.7%

46.9%

47.1%

Telstra Cable

7.8%

9.5%

8.3%

7.6%

7.2%

6.8%

Optus Cable

14.2%

10.7%

8.4%

7.9%

7.5%

7.0%

Other1

5.0%

3.8%

3.2%

3.6%

4.0%

4.5%

Total

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

(Source: BuddeComm)

Note: 1Other category includes other cable operators such as TransACT; fixed wireless broadband operators consisting such as Unwired and PBA and mobile 3G operators.

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

 

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