2012 Australia - Mobile Communications - Statistics and Forecasts

Prepaid and 4G subscribers new growth areas into 2013

The mobile communications market in Australia has seen lots of infrastructure activity in the last year from the mobile network operators (MNOs), with some of the results of that activity still to come to fruition into 2013 and beyond. New investments are driven by a rapidly changing market led by consumer demand, handset saturation and the demand of faster-speed technologies in the fixed- broadband market. Competition in the mobile sector is driving the mobile market to a lower dollar value return on a user basis. This is being compensated by more data use on a variety of mobile devices and growth in the emerging M2M market.

With the mobile handset market being driven by smartphone uptake, this is also driving mobile broadband usage and the increase of over-the-top applications that are now depriving the mobile network operators from their traditional income streams. Mobile voice calls have now reached their peak and will start a slight level of ongoing decrease over coming years.

In this report we provide historical figures and estimate that total mobile services revenue are expected to exceed $17.5 billion in 2012. Yet since the introduction of the lower network termination rates, decreasing costs of monthly mobile broadband to consumers, growth rates may even slow further. But there is still an opportunity of growth for the telcos. This growth will come from the newer 4G networks that has seen devices and phones already released from one MNO, Telstra. In this report we also detail how more 4G networks will be released by the other MNOs into 2012/13.

In Australia there are more mobile users than there are people. While revenue growth is likely to continue in the next few years as smartphone uptake increases, growth will continues at a much slower rate than we have previously seen. Now that subscriber penetration rates are over 130% of the population, in this report we anticipate a subscriber growth of less than 2% into 2012/13 as the market further saturates.

The Australian MNOs (Optus, Telstra, and Vodafone) are likely to have more than 29 million mobile subscribers by late 2012 as more users continue to migrate to a mobile only environment. Telstra continues to be the market leader with more than 13 million subscribers.

As the smartphone sector in Australia takes off, in mid-2012 we see that the Android market has overtaken the iPhone as the user’s choice as the top smartphone. But with the 4G handset market about to expand as users come off plans, the changing of leading brands may occur once again and we will see applications and data usage further increase placing strains on the limited spectrum availability.

While overall mobile services revenue growth by the mobile network operators over the last financial years has decreased on a year-on-year bases, in 2012 we are seeing a further slowdown in growth with revenue growth going negative for Vodafone. While the issues that saw Vodafone revenues slide are unique, the price competitiveness of a mobile service together with increased offerings from the MVNOs will no doubt see growth level off for the next couple of years.

This report also provides analysis of high-level revenue, market shares and revenue growth, as well as revenue earned from mobile voice and mobile data services. In addition, we include selected additional statistical data relating to prepaid and postpaid revenue and average revenue per user for selected mobile voice and data services.

We provide information in the report including that the Australian Communications and Media Authority flagged spectrum shortages and made recommendations on how to secure extra bandwidth. These include details on the Ultra-high-frequency spectrum block that is expected to be available at the end of 2013, while other frequencies in the 700MHz and 2.5GHz frequencies ranges are to be reallocated across the 2011-2016 time frame.

Information relating to the radio spectrum used to provide wireless and mobile telephony services in Australia. Also provided is selected details of spectrum ownership and its usage by network operators is also provided in the report.

The importance of phone supply channels from the mobile retail market is included as retailers are fast becoming the focus point for interaction with customers, many of whom have individual needs which require a higher level of customer service. Information that we provide on the new TCP Code that commences in September 2012 will probably see customer satisfaction levels in relation to billing disputes drop rapidly as new contracts begin or existing contracts are resigned by customers in the replacement market.

Not to be left out, those in regional and remote areas of Australia also need mobile services. Mobile satellite services are crucial in Australia to ensure universal access to basic telephony products in very remote areas. These services are also required for operations such as sea-based communications and outback mining companies, where there is limited or no 2G/3G mobile phone coverage and fleet-tracking services. We provide an overview of the market, an overview of the operators and some statistics on users and revenue.

Market highlights:

• There are six million more mobile phones than there are people in Australia.
• Mobile subscriber penetration still climbing above 130% even in a saturated market.
• Vodafone losing market share as subscribers churn away from the merged company while Vodafone subscriber market share may only be 50% of that of Telstra by 2013.
• Subscribers taking up 4G services with more to 4G services to become available into 2012/13.
• Telstra now the king of prepaid subscribers with more prepaid subscribers than postpaid.
• The smartphone market continues to grow with more than 60% penetration by end-2012
• Short term spectrum shortages are seeing 2G spectrum being refarmed by the operators as 3G and 4G.

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