2009 Australia - Telecoms Market Analyses - Australia leading telecoms beyond the crisis

Publication Overview

Researcher: Paul Budde

Current publication date:- September 2009 (22nd Edition)

Next publication date:- September 2010

Executive Summary

The financial crisis has led to a major rethink on the way that the various political, social and economic systems operate. Instead of repairing broken systems, new approaches are being developed that are better-suited to the current environment.

 

Increasingly the market is recognising the importance of telecoms within a range of social and economic applications. As a result telecoms investments now play a key role in most economic stimulus packages. At the same time Internet access and digital media depend on good telecoms infrastructure, and this will drive developments and opportunities in the market.

 

For the next few years mobile will continue to be dominated by voice and SMS. Data access will increase in importance but the current networks are still not suitable for mass market mobile media. In 2010 infrastructure issues will be paramount – issues such a fibre-based National Broadband Network and wireless networks are the all-important foundation for the digital economy.

 

With government involvement it will be possible to use the telecommunications networks for the national good. BuddeComm has been involved in the generation of government policies around open networks, structural separation and trans-sectoral developments on three continents. In the report we discuss some of the high-level strategic developments occurring as a result of the economic crisis.

 

At the core of new policy-making is trans-sector thinking – looking across sectors to create synergy – and the Australian government is leading the world in this. The report discusses in detail the opportunities within the ICT industries to utilise new telecoms networks for e-health, e-education, smart grids (managing renewables, saving energy), etc.

 

This way of thinking applies across infrastructure projects – looking at the potential synergies between the building of roads, sewerage systems, water and gas pipe networks as well as telecoms and electricity networks. This also ties in with the initiatives the government has announced since the NBN.

 

And eventually this leads to the concept of smart communities, the development of connected and sustainable communities based on intelligent infrastructure such as broadband (FttH) and smart grids. But trans-sector policies and strategies need to be developed before these smart communities can be built. They can’t be built out of the silo structures that currently dominate our thinking; they require a holistic approach, which includes environmental issues such buildings that are self-sufficient in relation to energy, community-based ‘exchanges’ for renewable energy and e-cars, and the delivery of e-health, e-education, e-government services in addition to digital media and Internet services.

 

The report discusses and provides examples of some of the developments taking place around the world towards building smart cities and communities.

 

Australia is taking a leadership role in these developments. The decision from the government to invest $43 billion in a FttH NBN is a clear indication that it believes broadband infrastructure is a collective good. With its trans-sector multiplier effect it delivers massive social and economic benefits. There is no other way – if you want to build a digital economy you need FttH, and for that to work it can only be built by a utility. Early indications are that Telstra is going to cooperate are very promising.

The new broadband plan offers unprecedented opportunities for Australia – not just in relation to telecommunications, broadband and the Internet, but also for a range of new applications, most of which we can’t even envisage as this point in time. The report addresses the enormous opportunities that this infrastructure, as a utility, has to offer. It also covers the essential high-level issues that need to be addressed.

 

One critical point is that this needs to be perceived as the infrastructure for the digital economy; to simply view it as an upgrade to ADSL broadband would be a grave mistake. A section of the report includes comments from the Digital Economy Industry Working Group and our International (Obama Team) BigThink Strategies Group.

 

With so much emphasis being placed on advances in the fixed network it is easy to overlook the enormous developments that are simultaneously taking place around wireless technology. The mobile communications market in Australia has been shaken up by the merger of the third and fourth largest mobile network operators, Vodafone and Hutchison Australia, to form VHA. If VHA is successful in the longer term it may challenge both Optus and Telstra in an attempt to become the largest mobile service provider in Australia.

 

The extent to which Australia suffers an economic slowdown in 2010 will have a significant impact on the growth of the mobile communications market. Competition may intensify between mobile operators, resulting in lower mobile call charges for customers. In mid-2009 Woolworths launched a major new mobile virtual network providing low-cost prepaid services. Voice calls are increasingly moving onto the mobile networks at the expense of the fixed-line networks and mobile broadband has grown rapidly in Australia in 2009. These trends are likely to continue into 2010 as mobile tariffs fall further and certain customer segments reduce their use of fixed-line voice and data services.

 

With these massive changes underway and as it becomes unshackled from the operators’ portals that have dominated it for a decade – all without having made any significant inroads into the content use of mobile users – the mobile media market is set to change forever.

 

The new capped data packages, fuelled by further competition, will see a total revamp of this market. It will no longer be based on portals but on direct services by content and services providers via open source phones and mobile-friendly Internet-based services. The next step will be the arrival of micro-payment services, like those being developed in countries such as Kenya, Philippines and India. This will create a new e-payment system for the mobile market, away from the hefty charges the carriers put on PSMS payment facilities. However, there is a limit to the mobile networks’ spectrum capacity and we will have to wait for true IP-based wireless broadband to become available before the operators can deliver fully on the promise of mass market mobile broadband.

 

Last but not least, the social media are receiving widespread attention and the events in Iran have propelled Twitter right to forefront. Social media developments are fascinating and exciting; they show the great potential of the new communication and information tools that are becoming available, thanks to the Internet, Web 2.0, email and broadband infrastructure. However, for these new social media tools to succeed they need to be totally integrated into our daily communication. Current social media sites such as Facebook, MySpace, LinkedIn, Plaxo, Twitter, YouTube, Wikipedia, Google and Second Life are important incubators for these new services; they provide us with new tools and allow us to experiment.

Table of Contents

  • 1. Strategic Developments For Comms During The Crisis
    • 1.1 Telecoms for economic stimulus
    • 1.2 Financial crisis requires new methods
      • 1.2.1 Don’t fix broken systems, create new ones
      • 1.2.2 Roles for government and the market
      • 1.2.3 Grass roots involvement
      • 1.2.4 Trans-sectoral thinking
    • 1.3 Investing in the communications revolution
    • 1.4 How to create the right environment
    • 1.5 Stimulus driving optical developments
    • 1.6 Co-development of fibre and the digital economy
      • 1.6.1 Infrastructure comes before services (unfortunately)
      • 1.6.2 USA broadband stimulus package holding fast
    • 1.7 Regional implications – 2009
      • 1.7.1 Latin America
      • 1.7.2 Asia
      • 1.7.3 North America
      • 1.7.4 New Zealand
      • 1.7.5 Africa
      • 1.7.6 Europe
      • 1.7.7 The Middle East
    • 1.8 BigThink – how to move beyond the crisis
  • 2. Strategic Vision For Comms After The Crisis
    • 2.1 Restructuring the industry
    • 2.2 Government leadership
      • 2.2.1 Delivering trans-sector approaches
      • 2.2.2 No success without a shared vision
      • 2.2.3 Developing sound business models
    • 2.3 Decisive action by some governments
      • 2.3.1 The lucky country
      • 2.3.2 Leadership from the USA
      • 2.3.3 Digital globalisation
    • 2.4 The position of incumbents
      • 2.4.1 Prepared to make changes
      • 2.4.2 Some early positive signs
    • 2.5 Infrastructure essential for the digital economy
    • 2.6 Key elements of the digital economy
      • 2.6.1 Smart grids and the environment
      • 2.6.2 E-commerce
      • 2.6.3 E-government
      • 2.6.4 E-health
      • 2.6.5 E-education
      • 2.6.6 E-science
      • 2.6.7 Social media
  • 3. Trans-Sector Thinking Leading To Smart Communities
    • 3.1 Introduction
    • 3.2 Australian leadership
      • 3.2.1 Digital Economy Industry Work Group (DEIWG)
      • 3.2.2 E-education – Australia’s first trans-sector initiative
      • 3.2.3 Trans-sector project: smart grids
      • 3.2.4 Trans-sector project for social services
      • 3.2.5 Smart infrastructure
      • 3.2.6 Trans-sector project – e-health
    • 3.3 National welfare depends on new thinking concepts
    • 3.4 work in progress: political leadership
    • 3.5 Trans-sector thinking at highest levels in Australia
    • 3.6 The multiplier effect
    • 3.7 Smart communities, where do we start?
    • 3.8 We lack the structures to implement trans-sector visions
    • 3.9 Trans-sector regulation
      • 3.9.1 Regulations need to be rewritten
      • 3.9.2 FttH will change telecom models
      • 3.9.3 Utilities-based regulation
    • 3.10 The sectors
      • 3.10.1 Telecommunications
      • 3.10.2 Government communication and information
      • 3.10.3 Healthcare
      • 3.10.4 E-education and e-science
      • 3.10.5 Smart grids
    • 3.11 Smart communities and smart buildings
  • 4. Smart Cities, Buildings & Communities
    • 4.1 Introduction
    • 4.2 Building smart cities to ease the stress
      • 4.2.1 A population of nine billion people
      • 4.2.2 The role of smart cities
      • 4.2.3 We need to use people power
      • 4.2.4 Education, information, empowerment
      • 4.2.5 Changes are starting to drive action
    • 4.3 Key components of smart cities
      • 4.3.1 Smart grids
      • 4.3.2 Next generation telecoms
      • 4.3.3 Open networks
      • 4.3.4 Smart buildings/homes
    • 4.4 Strategies for smart communities
      • 4.4.1 Tran-sector thinking
      • 4.4.2 Rebuilding communities
      • 4.4.3 Greenfield communities
    • 4.5 Brief examples of smart communities
      • 4.5.1 India
      • 4.5.2 China
      • 4.5.3 Europe
    • 4.6 Intelligent/smart technologies and systems
    • 4.7 Intelligent Communities Forum
  • 5. The Telecoms Market Moving Into 2010
    • 5.1 Major industry developments in 2010
      • 5.1.1 National broadband network infrastructure – Australia showing global leadership
      • 5.1.2 The impact of regulatory changes on Telstra
      • 5.1.3 Impact of the Australian economic climate on communications
    • 5.2 Mobile communications
      • 5.2.1 Mobile competition between the major operators
      • 5.2.2 Mobile broadband
    • 5.3 Fixed voice and broadband market
      • 5.3.1 Fixed broadband – the impact of fibre optic networks on DSL regulation
      • 5.3.2 Voice over IP
    • 5.4 The digital economy
      • 5.4.1 E-commerce
      • 5.4.2 Mobile media
      • 5.4.3 A trans-sector approach to e-health, e-education and energy
  • 6. National Broadband Network
    • 6.1 Overview & analysis
      • 6.1.1 Details of the NBN proposal
      • 6.1.2 National Broadband Corporation (NBC)
      • 6.1.3 Regulatory issues
      • 6.1.4 FttH infrastructure
      • 6.1.5 The business model
      • 6.1.6 Analyses – July/August 2009
      • 6.1.7 The early projects
      • 6.1.8 Trans-sector thinking
      • 6.1.9 Open network = innovation and affordability
      • 6.1.10 Co-development of fibre and the digital economy
      • 6.1.11 What’s next for Telstra?
      • 6.1.12 No policies, just opposition from the Opposition
    • 6.2 Critical considerations
      • 6.2.1 NBN Co bringing us to the next stage – September 2009
      • 6.2.2 Governance and management of the NBN/NBC
      • 6.2.3 Regulations – critical considerations
      • 6.2.4 Wholesale
      • 6.2.5 Technology critical consideration
      • 6.2.6 Basic infrastructure
      • 6.2.7 Co-development of the digital economy
      • 6.2.8 Strategic differences of an NBN
      • 6.2.9 Comments from international experts
  • 7. Mobile Communications – Analysis Of The Industry In 2009
    • 7.1 Overview
    • 7.2 Mobile operators
      • 7.2.1 Vodafone and Hutchison Australia merger
      • 7.2.2 Interconnection rates key to mobile competition
    • 7.3 Services
      • 7.3.1 Mobile broadband
      • 7.3.2 Mobile voice
      • 7.3.3 Prepaid trends and developments
      • 7.3.4 Mobile content
    • 7.4 MVNOs
      • 7.4.1 Prospects for Woolworths MVNO
      • 7.4.2 Other developments in the MVNO market
  • 8. Mobile Media Market
    • 8.1 The mobile content market in 2009
    • 8.2 The market for mobile digital media
    • 8.3 Operators have lost the content battle – analysis
      • 8.3.1 Not much progress in almost a decade
      • 8.3.2 Still no open networks
      • 8.3.3 Untapped potential
      • 8.3.4 We are a telecoms industry
      • 8.3.5 3G /HSPA taking off
      • 8.3.6 What do you mean – customer service?
      • 8.3.7 All we need is competition
    • 8.4 New marketing and distribution models
      • 8.4.1 On-deck services – operator portals
      • 8.4.2 Plenty of content providers
      • 8.4.3 Branding with partners
      • 8.4.4 The future: value-chain-based scenarios
    • 8.5 Mobile TV
    • 8.6 Premium Rate SMS (PSMS)
  • 9. Critical Assessment of Social Media & Market Overview
    • 9.1 Insatiable appetite for communication
    • 9.2 Social media after the financial crisis
    • 9.3 Second Life, Twitter, LinkedIn, Plaxo, Facebook, MySpace, Wikipedia
      • 9.3.1 Second Life
      • 9.3.2 Twitter
      • 9.3.3 LinkedIn and Plaxo
      • 9.3.4 Facebook and MySpace
      • 9.3.5 Wikipedia
    • 9.4 More of the same with new tools
    • 9.5 Personalising social media
      • 9.5.1 Using BuddeComm as an example
    • 9.6 Personal social networks
    • 9.7 Incorporate social media within the organisation/group
      • 9.7.1 Crowdsourcing
    • 9.8 Open Social Foundation
    • 9.9 Conclusions
  • 10. Glossary of Abbreviations
  • Table 1 – Second Life subscribers – 2006 - 2008
  • Table 2 – Unique monthly users: Facebook versus MySpace – 2008 - 2009
  • Table 3 – Worldwide market share of mobile social network users – 2008; 2013
  • Exhibit 1 – Open networks
  • Exhibit 2 – Regulating fibre access
  • Exhibit 3 – Smart homes
  • Exhibit 4 – Smart city – Masdar City Abu Dhabi
  • Exhibit 5 – Smart shopping
  • Exhibit 6 – Example of trans-sector collaboration in a smart city
  • Exhibit 7 – Learning from e-cars
  • Exhibit 8 – Examples of key MVNO customer segments
  • Exhibit 9 – Mobile facts and figures
  • Exhibit 10 – What users want
  • Exhibit 11 – Twitter usage facts
  • Exhibit 12 – Teenagers use social media to belong
  • Exhibit 13 – Examples of social networking websites
  • Exhibit 14 – Top 15 social networks worldwide – 2008
  • Exhibit 15 – Major regional user base of popular social networks – mid-2007
  • Exhibit 16 – Wikipedia
  • Exhibit 17 – The Obama campaign
  • Exhibit 18 – Examples of Web 2.0 developments

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