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October 16, 2007

Australian Telecoms Market to Slow Over Next Two Years


By Anshu Shrivastava
TMCnet Contributing Writer

The latest comprehensive report from Research and Market, “Australia – Telecom Industry – Overview and Statistics,” has estimated that overall the Australian telecoms market grew by 5.2 percent to $36.6 billion in the 12 months to June 2007. However, the rate of growth is predicted to slow down over the next two years.




According to the author, “Growth is expected to subside over the next two years as Telstra is forced to begin a period of transformation and rationalization that has already been evident in many European countries. Overall telecoms market growth is expected to drop to 4.1 percent by 2008 and 3.4 percent by 2009.”

This year, the Australian telecommunications and media giant Telstra has maintained its strong position in the wholesale market. It earned revenue just under $3 billion in 2007—which constituted just over 70 percent of the $4.2 billion wholesale market.

Telstra saw a 60 percent increase in its retail broadband subscribers—to 2.4 million. The overall market share increased from 45 percent to 47 percent. For the first time, broadband revenue exceeded PSTN revenue. The report also has projected that Telstra will increase it overall market share of Internet access revenues moving into 2008, extending its market share from 36 percent in 2007 to 39 percent in 2008.

Internet access revenues—dial-up and broadband—showed strong growth in 2006 and 2007 driven by strong uptake of broadband. The revenue growth rate for 2006 was 27 percent compared with 33 percent in 2007. The growth rate is expected to continue moving into 2008, when broadband penetration is expected to cross the 5 million mark.”

The total second tier market—including wholesale revenues—grew at around 7.9 percent in 2007 to $9.2 billion. It is expected that the growth rate will drop slightly to around 6 percent in 2008 and then maintain this level moving into 2009. Newly passed regulations are reportedly providing the market with an economic viable wholesale platform.

The report has predicted a grim picture for the Australian mobile market, where the subscriber rate is slowing down along with ARPUs. The report is not hopeful about a turnaround. “Growth was around 8.5 percent for 2006 and 10.3 percent in 2007 and we expect this to gradually taper off further to around 7.2 percent in 2008 and 5.0 percent in 2010,” the report states

In addition, the market has almost approached saturation. It is predicted that operators' revenue growth will be modest from 2008 onwards. In 2007, the subscriber growth rate reached 7 percent. However, it is down hill from here: it is projected that the growth will drop to 4 percent in 2008 and shrink further to only 2 percent in 2010.”

Even the growth in fixed line voice market—voice calls and local access—has subsided. The fixed line market is expected to drop to 28 percent of the overall market. Though, the data market continues to outpace other segment in terms of growth and market share.

On WiMAX, the report has projected that in the long term, wireless broadband developments in regional markets and in niche metropolitan markets will allow for innovations and expansion. In the near future, WiMAX does not have a major impact on the overall market.

Broadband will gain most in the coming years. It is going to become almost universal—either through fixed and wireless connections—and will lead to further commoditization, resulting in market consolidation.

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Anshu Shrivastava is a contributing writer for TMCnet.





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