2006 Australia - Broadband Market - Speeding up DSL

Publication Date	June 2006
Publisher	BuddeComm
Product Type	Report
Pages	195
ISBN Number	not applicable
Product Code	BUD00041

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Summary

Statistical overviews and forecast

Since Telstra's aggressive launch of its competitive DSL retail charges this market finally took off in mid-2004. By mid-2006 there were nearly 3.5 million users of which 80% were using DSL. With over 300 Broadband Service Providers (BSPs) the resale market is cut throat. Despite Telstra's anti-competitive behaviour competitors still dominates the DSL retail market (60%). The report provides a range of statistical overviews on subscribers, revenues and market shares.

Infrastructure

The broadband infrastructure market is undergoing changes that are unprecedented in the history of the 100-year-old network. Telstra is in the process of upgrading its network to NGN and will start rolling out FttN. Its very ambitious plan is looking at a 3-5 year timeframe. Competition needs to take place over this network, so issues like structural separation, open networks, local loop unbundling and DSLAMs are all critical developments that will keep the industry occupied till at least the end of the decade.

Regional developments

All around the world countries are recognising the fact that their national telecommunications infrastructure is vital to the national interest - both socially and economically - and, in light of this, governments are increasing their involvement in telecommunications infrastructure. A large part of this infrastructure exists as a natural monopoly, and government policies and regulations need to be adjusted to reflect that reality. Furthermore, a significant section - around a third - of the infrastructure resides in areas where it will not be economically viable to upgrade the existing copper-based infrastructure to a fibre-based information highway. In late 2005 the government allocated $3 billion towards regional broadband infrastructure.

Key players

Broadband networks are based on fibre-optic backbones. From here the strategy differs. Both HFC (cable TV) networks and copper based cable (DSL) are used. Depending on how deep the fibre optic cable is deployed, higher speeds are offered. Network upgrades over the next decade will eventually lead to fibre supplying clusters of around 50 to 200 houses and from that time onwards full fibre to the home will take over. Digital Subscriber Line (DSL) wholesalers (other than Telstra) and their over 500 retail Broadband Service Providers (BSPs) are supplying 55% of the retail DSL broadband services. The report covers developments from: Telstra, Optus, NEXTEP Broadband, PowerTel, Commander, iiNet, Primus, Soul, AAPT, People Telecom, Internode, Amcom, Neighbourhood Cable, Transact and others.

Unbundled Local Loop and DSLAMs

While Telstra's Unbundled Local Loop service was economic unviable for voice service, it provided the right platform for semi-infrastructure based broadband competition. Several telcos and ISPs are now installing their own DSLAM infrastructure and by early 2006 more than 1500 DSLAMS were either installed or commissioned. In a very limited way, ADSL2+ became available over the first installed DSLAMs in mid 2005 and this development is going to lead to a broadband capacity explosion in late 2006, with triple play business models delivering VoIP and IPTV as well as high speed Internet access.

Cable Modems

Cable modems connect fibre cable and HFC cable networks to the Internet. In Australia, the market penetration is limited by the availability of the cable TV networks. The advantage for the cable TV operators is the potential to transmit voice, data, and TV services via the same cable, with cable modems facilitating access to the Internet and potentially digital TV. The cable TV players have, unsurprisingly, been the key players in the Australian market, namely Telstra and Optus. However, both companies are concentrating on their DSL rollouts and now treat cable as a bit of an add-on. Telstra has indicated to withdraw from this market in 2008.

Content

1. Developments And Analysis 2006
- 1.1 Australia is catching up
- 1.2 Government broadband inventory
- 1.3 'Growing broke' with broadband
- 1.4 Telstra creating confusion in the broadband market
  - 1.4.1 Telstra sobbing over ULL
  - 1.4.2 Telstra clawing back market share
  - 1.4.3 Telstra retracting from IPTV market
  - 1.4.4 Telstra delaying ADSL2+
  - 1.4.5 Aggressive retail moves
- 1.5 Broadband speed record
- 1.6 Metro blackspots fund
2. Statistical Overview And Forecast
- 2.1 Household statistics
- 2.2 Australia's broadband ranking - mid-2006
- 2.3 The broadband market in numbers - 2006
  - 2.3.1 Whirlpool survey of Australian broadband users
  - 2.3.2 ACCC report December
  - 2.3.3 Subscriber statistics overview and forecasts
- 2.4 Broadband competition
- 2.5 Market shares
- 2.6 Market statistics and forecasts 2005-2015
  - 2.6.1 A market of pent-up demand
  - 2.6.2 Subscriber numbers
  - 2.6.3 Our broadband predictions are still on track
  - 2.6.4 Revenue forecasts 2006 - 2007
  - 2.6.5 Residential market - where the long term potential exists
  - 2.6.6 Long-term forecast - 2015
  - 2.6.7 Broadband capacity forecasts - towards 2015
  - 2.6.8 Spectacular developments in bandwidth
  - 2.6.9 Market segment forecasts - 2005-2015
- 2.7 Other surveys
  - 2.7.1 Telsyte
3. Infrastructure
- 3.1 Analyses
  - 3.1.1 Open networks needed for broadband services
  - 3.1.2 Video could choke the Internet
  - 3.1.3 Brief introduction to key technologies
  - 3.1.4 What is broadband and why is it needed?
  - 3.1.5 True broadband
  - 3.1.6 Market overview - xDSL
  - 3.1.7 Incumbents are running behind
  - 3.1.8 New initiatives
  - 3.1.9 Copper is still very much alive
  - 3.1.10 Proactive communities
- 3.2 Broadbanding regional Australia
  - 3.2.1 Regional broadband - analysis mid 2006
  - 3.2.2 Telstra's regional scaremongering
  - 3.2.3 The regional backhaul problem
  - 3.2.4 Higher Bandwidth Incentive Scheme (HiBIS)
  - 3.2.5 Infrastructure analysis - update mid-2006
  - 3.2.6 Services-based developments
  - 3.2.7 One third of infrastructure is not commercially upgradeable
  - 3.2.8 Public investments
  - 3.2.9 Governments maintain stake in telecoms
  - 3.2.10 Privatisation not good for regional and rural customers
- 3.3 ADSL
  - 3.3.1 Overview and statistics
  - 3.3.2 DSLAMs and ADSL2+
- 3.4 Cable modems
  - 3.4.1 Latest developments
  - 3.4.2 Market Overview
  - 3.4.3 From HFC to FttH - analysis by Paul Budde
  - 3.4.4 The long road that led to nowhere
  - 3.4.5 Telstra's cable modem service
  - 3.4.6 Optus
  - 3.4.7 Cable modems vs xDSL
  - 3.4.8 Cable telephony
- 3.5 FttH
  - 3.5.1 Analyses and developments
  - 3.5.2 FttH projects
4. Network Operators And Wholesalers
- 4.1 The broadband ISP market - mid-2006
  - 4.1.1 Dial-up Internet
- 4.2 The broadband industry
  - 4.2.1 Industry structure
  - 4.2.2 Too much reliance on access
- 4.3 DSL Operators
  - 4.3.1 Telstra infrastructure
  - 4.3.2 Telstra's ADSL network
  - 4.3.3 Optus
  - 4.3.4 Nextep Broadband
  - 4.3.5 PowerTel
  - 4.3.6 Netspace
  - 4.3.7 Commander
  - 4.3.8 iiNet
  - 4.3.9 Primus
  - 4.3.10 Soul
  - 4.3.11 AAPT
  - 4.3.12 People Telecom
  - 4.3.13 Internode
  - 4.3.14 Amcom
- 4.4 HFC Networks
  - 4.4.1 Telstra BigPond broadband cable
  - 4.4.2 OptusNet cable
  - 4.4.3 Neighbourhood Cable
- 4.5 TransACT
- 4.6 AUSalliance
- 4.7 Wireless broadband operators
- 4.8 Electricity utilities
- 4.9 Consolidation
5. Broadband Economy
- 5.1 Broadband a $70 billion industry in the making
- 5.2 How to develop the broadband economy
  - 5.2.1 Multi-billion dollar economy at stake
  - 5.2.2 Silent changes
  - 5.2.3 History lesson in infrastructure
  - 5.2.4 Where are our leaders?
- 5.3 National Strategy
  - 5.3.1 What happened with the BAG?
  - 5.3.2 National Broadband Strategy Implementation Group
  - 5.3.3 Victorian Government rejects National Broadband Strategy
  - 5.3.4 National Strategy avoids the key issues
  - 5.3.5 Nothing to be heard
- 5.4 New partnerships models needed
  - 5.4.1 FSN approach far too slow to respond to customer demand
  - 5.4.2 Triple play industry partnerships needed
  - 5.4.3 FttN - the need for industry cooperation
6. Broadbanding Local Communities
- 6.1 Introduction
  - 6.1.1 Market overview
  - 6.1.2 Progress report - mid 2006
  - 6.1.3 Cities are taking charge
  - 6.1.4 Visionary approach is needed
  - 6.1.5 Significant economic and social benefits
  - 6.1.6 How to get started
  - 6.1.7 The roles of the players
  - 6.1.8 Outlying areas
  - 6.1.9 Staged developments
  - 6.1.10 Broadband - a concept not a technology
  - 6.1.11 A city Broadband Agenda
  - 6.1.12 Broadband education
  - 6.1.13 City marketing
  - 6.1.14 Examples of tele-cities
  - 6.1.15 Broadband analysis packages for LGAs and ROCs
- 6.2 Case studies - local broadbanding
  - 6.2.1 Broadband in the Eden region of NSW
  - 6.2.2 Broadbanding the Coorong
  - 6.2.3 The Broadbanding of Western Australia
  - 6.2.4 The Broadbanding of Armidale, New England
  - 6.2.5 The Broadbanding of Central Victoria
  - 6.2.6 Five Growth Councils in Victoria
  - 6.2.7 Omniconnect's broadband network in regional Victoria
  - 6.2.8 Related reports
7. Demand Aggregation
- 7.1 The business case for anchor tenants
- 7.2 Broadband brokers
  - 7.2.1 Brokers get $2.9 million
- 7.3 Firstly - local social vision required
- 7.4 Council-led broadbanding Steering Committee
- 7.5 Working with telcos
- 7.6 Aggregation to be addressed within steering committee
- 7.7 Long-term contracts are killing the model
- 7.8 The key is passion, combined with an entrepreneurial spirit
8. Business Markets
- 8.1 Subscriber statistics
- 8.2 The business ISP market - mid-2006
- 8.3 Revenue statistics
- 8.4 Business market in 2006
- 8.5 Pacific Internet report
  - 8.5.1 Rapid broadband saturation in business market
  - 8.5.2 Impact of broadband
  - 8.5.3 Volume of data
  - 8.5.4 Broadband spending
  - 8.5.5 Statistical overviews
- 8.6 Business market statistics 2004
  - 8.6.1 The broadband barometer
  - 8.6.2 Broadband continues to penetrate the SME market
  - 8.6.3 SMEs embracing broadband
9. Broadband Tv
- 9.1 Are you ready for the IPTV explosion?
  - 9.1.1 IPTV regulations?
- 9.2 Movies downloading
  - 9.2.1 Starting with Video-on-Demand (VoD)
  - 9.2.2 Primary target markets - statistics
- 9.3 IPTV developments
  - 9.3.1 Introduction
  - 9.3.2 Demand forecasts
  - 9.3.3 Global perspective
- 9.4 Telstra's complex convergence strategy
  - 9.4.1 Introduction
  - 9.4.2 BigPond Media
  - 9.4.3 Sensis
  - 9.4.4 IPTV
  - 9.4.5 Conflicts of interest remain
  - 9.4.6 Telstra vs News - what about Optus?
- 9.5 Other players
  - 9.5.1 M2B World
  - 9.5.2 VOD Pty Ltd
  - 9.5.3 Reeltime
  - 9.5.4 Anytime
  - 9.5.5 Crank TV - IPTV music channel
  - 9.5.6 ROO Media
  - 9.5.7 IPTV from Video Ezy IPTV
  - 9.5.8 Foxtel to deliver broadband content
  - 9.5.9 Soul
- 9.6 Broadband HDTV
10. Home Networks
- 10.1 Statistics and forecasts
  - 10.1.1 Market set to accelerate in 2006
  - 10.1.2 Connected home technologies
  - 10.1.3 Home networking market forecast - IDC
- 10.2 Home networking
  - 10.2.1 Broadband-enabled connected homes
  - 10.2.2 Home automation market
  - 10.2.3 Smart Wired House - survey findings
  - 10.2.4 Home wireless market
- 10.3 W Home
  - 10.3.1 Overview
  - 10.3.2 Customer base
  - 10.3.3 Powerline broadband
  - 10.3.4 Examination W Home's of business model
- 10.4 Telstra gearing up to offer digital home gateway
- 10.5 HomePlug
  - 10.5.1 Introduction
  - 10.5.2 Orthogonal Frequency Division Multiplexing (OFDM)
  - 10.5.3 56 bit DES
  - 10.5.4 Interoperability
  - 10.5.5 Reach - with and beyond each home
11. Wholesale Access Network - Industry Cooperation
- 11.1 Analysis of the EOI
  - 11.1.1 The nebulous description of 'fair wholesale'
  - 11.1.2 Disclosure
- 11.2 Wholesale industry cooperation
  - 11.2.1 Regional wholesale access network
- 11.3 Wholesale industry group
  - 11.3.1 Blueprint
  - 11.3.2 Industry forum
- 11.4 Progress report June 2006
  - 11.4.1 Local neutral access points
  - 11.4.2 Planning: network capacity
  - 11.4.3 Planning: technologies
  - 11.4.4 Network neutrality
  - 11.4.5 Open access code
  - 11.4.6 State governments
  - 11.4.7 Mapping
- 11.5 Regional projects
- 11.6 Expressions of Interest (EOI)
- 11.7 Strategic infrastructure funding - backgrounder
- 11.8 Lessons learned from the past
- 11.9 Government direction is essential
  - 11.9.1 Broadband summit
  - 11.9.2 UtiliTel
  - 11.9.3 Broadbanding local communities
  - 11.9.4 Telstra
- 11.10 Conclusions
- 11.11 Recommendations: how to proceed from here
  - 11.11.1 The big picture
  - 11.11.2 Real infrastructure competition needs to be encouraged
  - 11.11.3 Strategic use of $ investments as well as in-kind contributions
- 11.12 Consortia
  - 11.12.1 AUSalliance
12. Glossary Of Abbreviations
List Of Exhibits
- Exhibit 1 - Advice for information highway contenders
- Exhibit 2 - From Kilobit to Yottabit
- Exhibit 3 - Some application bit rates
- Exhibit 4 - Access technologies
- Exhibit 5 - What does it mean? (DSL, 1Gb/s, DWDM transmission speeds)
- Exhibit 6 - xDSL services - 2004
- Exhibit 7 - xDSL services in CBD and metropolitan areas - 2004
- Exhibit 8 - xDSL services in provincial areas - 2004
- Exhibit 9 - xDSL services in rural and remote areas - 2004
- Exhibit 10 - Method of supply of xDSL services by access type - 2004
- Exhibit 11 - Overview of physical distribution networks for high-speed services
- Exhibit 12 - Infrastructure - people power
- Exhibit 13 - Structural or operational separation
- Exhibit 14 - The national interest
- Exhibit 15 - Fibre-to-the-Node (FttN)
- Exhibit 16 - Cooperation scenarios
- Exhibit 17 - Residential Broadband (BB) - growth predictions - next ten years
- Exhibit 18 - Infrastructure blueprint
- Exhibit 19 - FttH Prerequisites
- Exhibit 20 - Optical access costs and performance - mid-2005
- Exhibit 21 - Benefits of FttH in new development projects
- Exhibit 22 - Alcatel's BPON platform
- Exhibit 23 - Key role National Broadband Strategy Implementation Group
- Exhibit 24 - Key ingredients for local broadband success
- Exhibit 25 - Key starting-points for local broadbanding
- Exhibit 26 - Key broadbanding steps
- Exhibit 27 - Some application bit rates
- Exhibit 28 - Callpoint services
- Exhibit 29 - Armidale demographics
- Exhibit 30 - IPTV Applications
- Exhibit 31 - Proposed retail pricing strategy
- Exhibit 32 - Multi-dwelling units
- Exhibit 33 - Key strategies
- Exhibit 34 - Residential Broadband (BB) - growth predictions - next ten years
- Exhibit 35 - Infrastructure blueprint
List Of Tables
- Table 1 - Number of Australian households and technology penetration - mid-2006
- Table 2 - Broadband component of Internet households - 2005 - 2010, 2015
- Table 3 - Broadband access amongst Internet households - 2001 - 2006
- Table 4 - Broadband subscribers by technology - 2001 - 2005
- Table 5 - Broadband subscribers total market (wholesale) - 1996 - 2006
- Table 6 - Broadband subscribers total market (retail) - 2002 - 2007
- Table 7 - Broadband subscribers annual growth - 2001 - 2007
- Table 8 - Broadband DSL retail subscribers - 2002 - 2006
- Table 9 - Competitor Infrastructure Coverage in Metro Areas - 2005
- Table 10 - Competitor Infrastructure Regional Coverage per state - 2005
- Table 11 - Competitor Infrastructure Coverage Total Market per state - 2005
- Table 12 - Market share subscribers (wholesale) - 2002 - 2006
- Table 13 - Market share subscribers (retail) - 2002 - 2006
- Table 14 - Total broadband subscribers - 1996 - 2009
- Table 15 - Broadband revenues per Telstra/Optus and 'others' - 2000 - 2007
- Table 16 - Revenue make up scenario forecasting - 2010
- Table 17 - Residential spend per household per annum - 2003; 2010; 2015
- Table 18 - Overview total Telecoms/Internet market - 2015
- Table 19 - Residential Broadband (BB) growth predictions - next ten years
- Table 20 - Broadband revenues - 2005; 2010; 2015
- Table 21 - Broadband market share by technology - 2005; 2010; 2015
- Table 22 - Method of supply of xDSL services by percentage usage - 2004
- Table 23 - Method of supply of xDSL services by carriers other than Telstra - 2004
- Table 24 - Broadband penetration regional vs. metro households - 2003 - 2005
- Table 25 - Broadband DSL retail subscribers - 2002 - 2006
- Table 26 - Commercial cable modem subscribers - 1996 - 2006
- Table 27 - Cable subscribers per operator- 1996 - 2006
- Table 28 - Optus cable telephony subscribers - 1997 - 2005
- Table 29 - Residential Broadband ARPU and change - 2004 - 2006
- Table 30 - Residential Dial UP Internet ARPU and change - 2004 - 2006
- Table 31 - Subscriber overview dial-up & broadband - mid-2006
- Table 32 - Business Broadband subscribers - 2002 - 2008; 2010
- Table 33 - Business Broadband ARPU and annual change - 2004 - 2006
- Table 34 - Business market Internet revenue - 1997 - 2007
- Table 35 - Small business Internet access technology by metropolitan region - 2005
- Table 36 - SME broadband/Internet access technology - 2002 - 2005
- Table 37 - SMBs Internet access technology - 2005
- Table 38 - SMB Internet access technology (vertical segmentation) - 2005
- Table 39 - Home network penetration of households - 2005; 2010; 2015
- Table 40 - Australian multi dwelling units (100+) - 2003 - 2008
- Table 41 - Revenue forecasts - Australian home automation market - 2003 - 2008