2008 Australia - Telecoms Analyses and Forecasts

Infrastructure

Globally the focus of telecommunications infrastructure has shifted towards FttH. In Australia, the absence of decision-making and the ongoing delays in the broadband market are impeding the government from the rolling out of next generation telecoms infrastructure before the end of 2009.

Recent regulatory changes have also seen the ACCC putting its emphasis on facilities-based competition (ULL and DSLAMs) rather than on resale. This further undermines the position of not just the smaller ISPs, but also of the larger ISPs, like Primus and AAPT, which have significant numbers of resale customers. Further consolidation will be needed, especially in relation to those players with large resale customer bases. The acquisition of Westnet by iiNet and TPG by Soul should also be looked at in this context.

Without a genuine participation from Telstra in the execution of the National Broadband Plan, any government investment would be wasted as Telstra refuses to participate in the process. Instead it has opted for a highly focused and successful campaign to delay any new form of competition. Without firm government action the currently announced delays in the NBN process will become enduring.

E-government

The Australian Government is well aware of the importance of e-government and has shown leadership in developing online services. The benefits of e-government applications can include cutting costs and improving processes and information flow, but one of its primary aims is to improve customer service for citizens.

Rapid growth for mobile data

There is a great deal of discussion going on about mobile data, wireless broadband and mobile media, but the reality is that mobile voice and SMS still generate 90% of mobile revenues. Full-blown, end-to-end IP-based wireless broadband infrastructure will not be in place until 2012-2015. So the changeover, especially over the next few years, will remain rather slow, with an initial change starting perhaps later in 2009 when Optus has its nationwide 3G HSDPA network in place.

Nevertheless we are seeing a real explosion in mobile wireless broadband. People are starting to take up an extra subscription one for voice one for data. This will continue for a while before we see more combined offerings.

VoIP

In a 'voice' sense, the additional value of VoIP could lie in developing further innovations linked to the social, value-added experience of certain voice calls - in cases where delayed communication is problematic because the quality of the event/experience outweighs the actual cost of the call. Broadband is now dominating the fixed-line market, and voice (VoIP) will play a key role in broadband, where it will also be linked with video communication.

The Digital Economy

In Australia, the emphasis of the discussion is slowly shifting from access to applications and that is where the digital economy kicks in. It has been estimated that this economy can add one to two points to national GDP. The Digital Economy affects everybody. Existing players such as telcos, banks and players from the media and retail sector, will need to adapt to the new environment, while new players will enter these markets from different angles.

Wireless broadband

It appears that WiMAX has now well and truly lost the battle to the 3G operators. The mobile wireless broadband market is now booming. This will leave any future WiMAX operators to develop in niche markets only. By 2018 only 10% of mobile revenues will come from mobile voice; furthermore, that will be based on VoIP.

Key highlights:

Telstra's infrastructure strategy

• Telstra's long term infrastructure strategy will move towards FttH, at least for metropolitan areas. New fibre is rolled out day by day deeper into the network and thus closer to end user premises.
• At the same time the incumbent has its NGN well and truly underway. While the transformation may not be achieved within the projected three to five years it is absolutely critical to Telstra.

Mobile data and media markets

• Music services remains a key growth market, with the music industry rapidly developing a whole range of new music services - both real tones and full track.
• Video-based services are the largest new addition to the mobile content industry - both downloads (Girls and Goals) and uploads - (blogging apps). This market is set for rapid growth over this period - both via MMS and direct video call type services.
• Increased competition in the mobile market will see stronger competition in mobile data packages which will result in more consumers using their mobile devices to download their emails and to surf the Internet. This will see an explosion in the number of mobile Internet services that will be made available tailor-made to mobile users (small screens).

E-education, E-health, and smart meters

• The Internet and associated Web 2.0 technologies has also further broadened the quality and possibilities for remote education and the 'virtual classroom.'
• E-health is rapidly shaping up as one of the key killer apps on the truly high-speed broadband networks. The cost of this, however, is enormous and we simply can no longer afford to finance these huge advances through the public health systems.
• The government's smart meter project has been delayed. This needs to be changed so that utilities will be encouraged to invest in smart grids rather than smart meters.

Internet media companies

• Internet media companies such as Google, News Corp, Fairfax Digital and Yahoo! are just some of the leaders taking advantage of this with the introduction of new services and applications. This revival of the Internet has also led in part to the re-emergence of the Internet economy, and more specifically, e-commerce.