Last updated: 30 Sep 2008 Update History
Report Status: Archived
Report Pages: 152
Analyst: Stephen McNamara
For those needing detailed revenues, forecasting and analysis on the Australian telecommunications market, this report provides essential reading and gives in-depth information on:
Phil Harpur and Paul Budde
Current publication date: September 2008 (21st edition)
Next publication date: October 2009
BuddeComm estimates that the overall telecoms market grew by 6.0% to $38.0 billion in the 12 months to June 2008, however this growth rate in real terms is only around 4.7% if an inconsistency in Telstra’s financial reporting is eliminated. Telstra however still dominates the overall Australian telecom market with a massive 66% market share of overall revenues in 2007/08. Optus’ market share of overall telco service revenues has been fairly stagnant over the past few years at just over 20% and we predict a similar trend moving into 2009 and 2010. For year to June 2008, the total mobile services market that was worth $14.4 billion, with a growth rate of 9.6%. BuddeComm predicts that moving forward into 2008/09 and 2009/10, the overall market will grow with an overall growth rate slightly below the 2007/08 financial year at around 4.6%.
Broadband subscriber growth in recent years has been driven by further strong uptake of ADSL subscribers, although recent growth has not as strong as the previous two years as the majority of the market has now made the transition from dial-up to broadband.
Telstra clearly outperformed the rest of the market in terms of broadband access revenue growth in and 2008, whereas Optus saw a significant decline in broadband access revenues growth, mainly due to a loss of off-net resale ADSL subscribers.
By mid-2009, BuddeComm predicts total wireless broadband market will be generating $1.4 worth of revenues, the vast majority of which will be accounted for by 3G mobile wireless broadband revenues. By this time the battle in the 3G wireless broadband market will have really heated up. The fixed wireless market is showing however only modest growth - operators like Unwired and BigAir are currently using pre-WiMAX proprietary wireless broadband technology, and have been patiently waiting for several years now to make the transition to WiMAX technology, however constant delays have postponed the launch. It appears that in any case, WiMAX has now well and truly lost the battle to the 3G operators, which will leave any future WiMAX operators to develop in niche markets only. M2M might be the next opportunity for WiMAX to look at.
In a market that has already reached saturation, and where mobile call charges are declining, operators’ revenue growths will continue to taper off in 2009 and 2010, however the revenue growth rate will remain well above the subscriber growth rate, largely due to the increased revenue streams that the mobile operators are getting from 3G mobile data / mobile broadband.
Moving forward into 2009, BuddeComm predicts that the gap between Hutchison and the rest of the market in terms of subscriber growth, will begin to quickly diminish as the early competitive advantage that it gained previously in the 3G space is being slowly eaten away.
PSTN revenues (fixed line voice and local access revenues), continue on a downward spiral for all the telcos. Moving forward into 2008/09, a decline of 5% is expected, to take the total fixed voice market down to $9.78 billion. The rate of decline will accelerate further in by 6% in 2009/10.
The data market has now taken over the mobile sector the main driver of growth driven by the retail broadband sector. Mobile voice revenues are starting to decline in saturated market, however the mobile wireless broadband sector is keeping mobile revenue growth reasonably strong.
Retail broadband continues to be the real market driver within the data market. Traditional specialised data categories such as frame relay and ATM continue to decline, whereas IP Access revenues are growing strongly, especially IP MAN revenues which are overtaking the more traditional frame relay product.
The industry is currently experiencing rebalancing and cannibalisation, but the underlying growth factors remain high and demand for high-speed infrastructure will outperform supply. This means significant growth in new IP-based NGN systems. That, in turn, will open up the market for digital media services, applications, video content hosting and distribution. By the end of 2018 FttH and wireless broadband will be widely available and will be used by the telecoms, IT and media industries.
· BuddeComm estimates that the overall telecoms market grew by 6.0% to $38.0 billion in the 12 months to June 2008, however this growth rate in real terms is only around 4.7% if an inconsistency in Telstra’s financial reporting is eliminated.
· Moving forward into 2008/09 and 2009/10, the market will grow with an overall growth rate slightly below the 2007/08 financial year at around 4.6%.
· Telstra however still dominates the overall Australian telecom market with a massive 66% market share of overall revenues in 2007/08.
· Optus’ market share of overall telco service revenues has been fairly stagnant over the past few years at just over 20% and we predict a similar trend moving into 2009 and 2010.
· The rest of the telco services market constituted 14% of the market by mid 2008, compared with 12% of the market in 2006. It grew at around 5% in 2008 and we expect that the growth rate will continue at similar rate in 2009 and also in 2010.
· A number of issues will however impact on the level of second tier market growth moving forward, for example whether the Terria alliance (formerly labelled G9) win the NBN tender or whether it goes to Telstra.
· For year to June 2008, the total mobile services market that was worth $14.4 billion, with a growth rate of 9.6%.
· BuddeComm predicts this mobile growth rate to gradually taper off further to around 8.3% in 2008/09, 8.0% in 2009/10 and 7.0% in 2010/11, where the market is expected to reach $18.0 billion.
· By 2018 only 10% of mobile revenues will come from mobile voice; furthermore, that will be based on VoIP.
· The total number of broadband subscribers reached 6.3 million by mid-2008, a 33% increase over the 12 months.
· For the 12 months to mid 2009 the annual growth should slow down to 17%, and similar growth is projected for 2010.
· While Telstra is talking about a 5% decline in its revenues based on the wholesale revenues as they themselves have reported in 2007 and 2008 their decline is more like 15%. Several wholesale customers are rapidly retreating from the fixed voice resale market, on top of that this market is declining anyway.
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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