Australia's Telecommunications Industry Prepares

The Australian telecommunications industry is preparing itself for the National Broadband Network. During it will be several years previously the full impact of the NBN is felt, it will as well take several years to change the industry around. Companies will have to reorganise themselves into new markets just as infrastructure and construction; middleware just as data centres, content hosting, cloud computing, OSS/BSS; and retail.

This reorganisation and repositioning is already noticeable in current market activities, where the focus is moving from ARPU to market share. Prices in mobile and fixed broadband have dropped significantly while 2010 as operators try to win as many clients as possible. These customer bases are becoming very valuable and more companies will want to do business with their clients through digital services. The telcos and ISPS are positioning themselves as attractive partners for such developments.

The total telecoms service market is segmented according to major provider. Telstra for all that dominates the overall Australian telecom market, with more than 60% market share of overall earnings in 2009/10. But, Telstra's annual results for 2010 showed declining revenue in most segments, and this did not improve much in 2011.

PSTN earnings, continue on a downward spiral for all the telcos, during the data market has now overtaken the mobile sector as the main driver of growth, driven by the retail broadband sector.

Fixed-line voice is declining in the second-tier market at an even faster rate than in the first-tier market - by more than 11% in 2008/09 and more than 8% in 2009/10. Falling revenue reflects increased bundle value, as so then as consumers moving away from fixed-line voice services. But it may as well be a symptom of increased reliance on VoIP (Voice over Internet Protocol)-based platforms for voice service provision in the second-tier market. Earnings in second-tier mobile services and data services continue to show satisfactory growth.

With the legislation in place significant progress has been made while 2011 in preparation for the rollout of the NBN. The last major part of the complex puzzle was the arrangements with Telstra. Since the change in management in 2009, that company has embraced the NBN and embarked spontaneously business transformation process. Significant new steps have been taken, which are already positioning the company at the forefront of the new business opportunities that will arise once the NBN is in place. Separately, it has negotiated good deals with the government in relation to its infrastructure assets and the handover of clients from its old networks to the NBN.

The mobile communications market in Australia

In 2011 the mobile communications market in Australia, as in other developed economies, is seeing a furthermore shift in emphasis from voice to data-orientated services, driven by more new handsets and applications. Penetration has outstripped the size of the market, which indicates that people are increasingly using multiple services and multiple devices.

While voice is nevertheless the dominant mobile service in Australia, mobile data has steadily become more popular, spurred on by the advent of smartphones from vendors like Apple, HTC and RIM. These smartphones facilitate a wide range of data applications and services. But the winner in 2011 will be the handsets based on Google's Android operating system. No longer held back by the mobile operators, mobile broadband growth has been in the extreme rapid since late 2007 and this is as well to be the main feature of 2011 and 2012.

Mobile services have expanded beyond voice and SMS, as operators seek to increase their earnings and market share as the mobile penetration rate of around 125% continues to rise in the saturated mobile market in 2011/12.

The arrival of the iPhone forced the industry to change - in other words than controlling the apps and portals market the industry has become a broadband infrastructure facilitator. This has created a new growth area in the industry, which is based more on infrastructure than on apps or services. Total mobile services revenue earned by the major mobile operators is set to continue to grow, however at a slower rate than the growth seen in the final years of the previous decade. This may reflect price competition from Telstra, the effect of increased competition from MVNOs - eg, Lebara - and the effect of a saturated market and competition.