2017 Australia - Telecoms Industry - Statistics and Forecasts

Australia’s National Broadband Network finally gains momentum

While fixed-line telephony traffic and revenue are declining, the mobile broadband market is growing steadily. Fixed-line broadband on the copper network is also declining as fibre and fixed-wireless broadband services become more widely available, through the National Broadband Network (NBN)’s multi-technology architecture, with its emphasis on VDSL with Fibre-to-the Node (FttN). In time, much of the voice traffic will be data packet via technologies such as Voice over Long-term Evolution (VoLTE).

Mobile subscriber growth is being driven by population increases as well as a rise in the number of people using two or more mobile subscriptions. Very slow growth is predicted over the next five years to 2022 with penetration rates predicted to rise only slightly above projected population increase. Revenue for Mobile Network Operators (MNOs) in recent years has been characterised by the continuing take up of services based on LTE technology, and to the rising proportion of mobile data to overall revenue.

For all operators, price competition combined with a focus on managing their mobile businesses as they adapt to new technologies being brought into play, have led to considerable pressure in recent years.

The release of spectrum for LTE mobile broadband use, as well as an increased uptake by consumers and businesses, is helping to offset the decline in revenue from fixed-line services, although as user uptake increases so will the amount of bandwidth consumed.

Other sources of revenue for the major telcos include broadband, data and IP access, business services and applications, cloud computing and other telco services. New revenue streams from fibre and cloud computing in particular are assisting the telcos to compensate for revenue losses from traditional revenue streams.

The second-tier telco market continues to grow strongly. Developments in this market have been dominated by industry consolidation a process that is set to continue over coming years, in particular from Vocus and TPG, both of which continue to grow through increased scale via mergers and acquisitions.

Within the market there is a dynamic shift among customers to fibre networks, as this infrastructure is being built out by nbn (NBN Co), the company responsible for the national broadband deployment. Australia’s broadband sector is making improved progress in its migration to a multi-technology NBN.

Growth in the overall number of broadband subscribers is expected to continue to slow further into 2018, with most growth coming from the mobile wireless and fibre broadband markets.

The DSL sector is expected to shrink as customers are migrated to the NBN in areas where services become available, while subscribers on HFC infrastructure will continue to be provided by existing cable within the NBN’s multi-technology mix.

Internationally, the adoption of broadband ranks Australia below many other developed countries, however there has been a moderate improvement over the past two years due to the continued rollout of the nbn.

There are two major categories of paid online video content: Pay-per-view video-on-demand (PVOD) and subscription video-on-demand (SVOD) services. SVOD has emerged as the major category of paid online content in Australia. The global streaming revolution is gathering pace. Streaming is closing in on broadcast TV. Rapid increase in rate of adoption of SVOD is occurring where high quality broadband is already available. NBN will accelerate this trend as the mass deployment of high quality (fibre) broadband takes place which will significantly decrease cost of delivery of SVOD.

Key developments:

• While fixed-line telephony traffic is declining, the mobile broadband market is growing.
• The second-tier market continues to grow strongly.
• Growth in broadband subscribers is expected to continue to slow further into 2018.
• Most broadband growth will come from the mobile wireless and fibre broadband markets.
• Consolidation within the broadband market will provide greater reach and scale.
• SVOD has emerged as the major category of paid online content in Australia.
• NBN will accelerate this trend.

Key companies mentioned in this report:

SingTel, Vodafone, 3, VHA, Optus, Telstra, Hutchison Australia, 3, NBN, Virgin Mobile, Macquarie Telecom, Foxtel, Fetch TV, Netflix, Stan, Facebook, Google, Facebook, YouTube, Twitter, LinkedIn, iiNet, TPG, Vocus.