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

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Last updated: 23 Sep 2009 Update History

Report Status: Archived

Report Pages: 144

Analyst: Paul Budde

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.

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