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Australia - Mobile Broadband Market

Australia - Mobile Broadband Market

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Meta Description Mobile broadband offers unprecedented opportunitiesMobile broadband using the 3G networks has expanded rapidly over the past
Publisher BuddeComm
Date of Report Jun 20, 2011
Quick Overview
Mobile broadband offers unprecedented opportunitiesMobile broadband using the 3G networks has expanded rapidly over the past year as Australians continue to adopt new and alternative communication methods, media services and adapt their usage patterns to meet their specific lifestyle needs. In the last year growth in mobile broadband across Australia exceeded 70%, while the percentage of mobile broadband subscriptions versus total connections has continued to rise.
The expansion rate in Australia closely mimics the global uptake of mobile broadband, which will possibly exceed four billion subscriptions by 2015. In the longer term the increase in connected devices and the increased availability of mobile devices – tablets and smartphones – is likely to boost the amount of mobile data downloaded to more than 600 Petabytes by 2020 in Australia.
Not to be left out, the fixed-wireless market has expanded over the past year too. With company acquisitions and the rollout of more 4G access locations during 2010/11, BigAir and vividwireless are using niche markets for their network expansions. The use of LTE fixed-wireless in the NBN rollout across regional and rural Australia will also boost uptake of mobile broadband usage.
This report provides an overview of the mobile broadband market in Australia, including usage statistics, industry estimates and forecasts, and analysis of key market trends. The information is provided in text, tabular and easy-to-read chart formats.
As social networking booms, with consumers increasingly sharing content such as images and videos, the need for a broadband connection with fast upload speeds becomes crucial. According to Ericsson, global mobile broadband use in the next five years is expected to reach the same level of penetration as the second-generation mobile phones that have been providing voice and text messaging today.
In 2000, before Facebook, MySpace and Twitter, only 360 million people globally, were online. By the end of the decade a quarter of the world’s population, about 1.7 billion people, had internet access, and today there are already more than 2.1 billion internet users.
With the market for mobile broadband services critically poised in Australia operators are progressively rolling out increasingly fast networks to support these services. All the major operators are currently upgrading their networks based on the high-speed packet access (HSPA) standard. These companies are expected to provide even faster mobile broadband speeds from late 2011 based on another related standard, long-term evolution (LTE), which will support services featuring data rates of at least tens of Mb/s per user.
More importantly, HSPA and LTE also enable network operators to move towards an all-IP network (5G) environment that may reduce network complexity and lower operating costs. This market will begin to emerge towards 2015.
Mobile Media
With the advent of capped mobile services and new smartphones, such as the iPhone and Android, we now see users moving to the internet to access a far wider variety of apps-based mobile content and communication services.
The premium rate SMS market, on the other hand, is moving more into specific niche market applications, such as the ones mentioned above, as well as competitions and voting, where price points, volume and profile ensure that these services remain viable.
This section of the report also discusses the activities of the mobile operators and service providers. Companies and service providers include Telstra BigPond Mobile, Optus, Vodafone Hutchison Australia (Vodafone and 3), MessageNet, the Photon Group subsidiaries of Be.interactive (previously Legion Interactive and BlueSkyFrog), Red Oxygen, Oxygen8 Communications (previously Opera Telecom), Jester Digital (Jamba and Jamster), Jumbuck, MobileActive, Mnet, Sybase 365, Netsize Group, mBlox, iTouch, Mobile Messenger, 5th Finger, SMS Central, Communicator and Yahoo!7.
By late 2011 the PSMS portals and apps will have developed into a $450 million+ market.
There has been a great deal of hype surrounding mobile TV in Australia; however the concept developed by the mobile operators has well and truly failed. Operators have been given a wake-up call with the introduction of the iPhone, which began to separate content from carriage. Suddenly all kinds of applications, including video-based apps, became available independently of the mobile operators. From now on new developments will take place around the devices and their applications, rather than the mobile operators.
However, mobile web browsing grows exponentially, with a large share of that activity on the back of the rapid growth of smartphones, including the iPhone, Android and BlackBerry devices. The mobile operators need more and more data bandwidth as the new mobile apps are developed for the mobile market, allowing more users to watch mobile TV. Unfortunately for them many of the application providers make it possible for the small screen TV viewers to watch content off-net, further diminishing the ARPU returns of the portals.
Previously SMS revenues have contributed exponential returns to the mobile operators. If one calculates the cost of an SMS in megabytes, the price tag would be more than a thousand dollars per megabyte, whereas in reality the cost of a 160-character SMS is only a fraction of tenths of a cent.
Compared to telephone calls an (expensive) 20 cent SMS is cheaper than a $1 call, but with capped mobile plans including texts and voice, and prepaid plans with SMS from $0.01 – and even free during certain times, or free on-net – the returns from SMS revenues to the mobile operators have just about peaked.
The majority of SMS revenue is currently earned from messages sent between subscribers, but, as many of the mobile phone data plans now available in 2011 also include free access to social networking sites, users can update a single message to multiple friends at virtually no cost. BuddeComm estimates that SMS numbers will begin to fall over the next two years as users make use of the operator portals and mobile email to stay connected and communicate instead of using the previous non-connective method of SMS.
M-commerce includes segments such as m-banking, m-payment and transaction services, mobile content applications and mobile advertising.
The market began to develop in the late 1990s, but the mobile operators’ rather cumbersome business models resulted in a low uptake of m-commerce. Mobile banking has been the exception and, since the mid-2000s in particular, this market has seen enormous growth.
In the premium SMS market the mobile operators maintain an iron grip through their m-payment facilities. However, at the same time, this has prevented them from moving into new business opportunities. Google’s eWallet is going to revolutionise the mobile payment market.
Companies covered in this section of the report include mHITs, National Australia Bank, Visa, MasterCard, Near Field Communications, Commonwealth Bank, ANZ Bank, Westpac, CabCharge and Taxis.
The Handset Market
As the smartphone sector takes off the handset market in Australia has seen a shift towards other vendors such as Android and Apple. In the past this sector has been dominated by Nokia, with its total market share of around 40%; and that company still dominates in the low end of the market.
The initial release of iPhone started the trend, and with competition from the Android operating system the smartphone market will continue to build.
In mid-2010 the iPhone 4 was released in Australia. BuddeComm predicts that in 2010/11 iPhone sales will greatly increase compared with previous years, while sales volumes in the remainder of the handset market, which by mid-2010 were 17% lower than 2009 figures, will continue to fall.
In this report BuddeComm provides statistics, trends in handsets and an overview of the market. The report also supplies information on mobile recycling and developments in the industry, including the rise of smartphones.
Market highlights:

BuddeComm predicts that mobile broadband revenue in 2011/12 may exceed $7 billion.
In 2011 Facebook has more than 500 million members worldwide, with around 30% of Australians signing up and around 30% of those using it on their mobile.
The major mobile media providers are now becoming the digital media providers on the internet as they provide access to their services for mobile devices.
Premium rate SMS services remain stagnant in 2011.
Up to 75% of consumer banking transactions are now carried out electronically (e- and m-banking). A similar development has taken place in the travel market, particularly for airline bookings.
BuddeComm estimates that the revenues generated by the total mobile broadband market during 2011/2012 will be up 17% from 2010. The vast majority of this will be accounted for by 3G mobile broadband revenues.
The charge in mobile broadband usage is being led by smartphones as telcos drop data charges and more users access the internet using a mobile, many for the first time.Revenue from SMS still continues to be the largest component of mobile data revenue for all the major mobile operators in Australia in mid-2011.Data in this report is the latest available at the time of preparation and may not be for the current year.
Table of Contents
1. Statistical Overview of the Market
1.1 Market overview and analysis
1.1.1 Analysis of the market as average revenue per user (ARPU) drops in 2011
1.1.2 Infrastructure to drive further expansion
1.1.3 Applications drive the market
1.1.4 Spectrum shortage
1.1.5 Mobile broadband revolution set to change the industry
1.1.6 Hardware drives applications
1.1.7 User prices still too high
1.2 Wireless broadband market statistics
1.2.1 Mobile broadband subscribers
1.2.2 Mobile broadband revenues
1.2.3 Mobile broadband market
1.2.4 Fixed wireless broadband market
1.3 Forecasts and other developments
1.3.1 4G Wireless National Broadband Network (NBN) for regional Australia
1.3.2 Fixed/mobile call market
1.3.3 Predicted value between $10-$15 billion
1.3.4 Revenue forecasts
2. Moving Toward 4G: HSPA and LTE
2.1 High-speed mobile networks
2.1.1 High-speed packet access (HSPA)
2.1.2 Long-term evolution (LTE)
2.2 Australian mobile broadband operators
2.2.1 Optus
2.2.2 Telstra
2.2.3 Unwired and vividwireless
2.2.4 Vodafone Hutchison Australia (VHA)
2.3 Mobile broadband market
2.3.1 Overview and analysis
2.3.2 Data growth
2.3.3 Mobile industry calls for spectrum certainty
2.3.4 Neutral broadband connections for HSDPA
2.4 Mobile broadband applications
2.4.1 Overview
3. Mobile Media
3.1 Introduction
3.2 Telstra surveys
3.2.1 The Grey Nomads and downagers are technology troopers
3.2.2 Increased demand for mobile working
3.3 Australian Interactive Media Industry Association (AIMIA) - Australian Mobile Phone Lifestyle Index
3.3.1 6th survey – 2010
3.3.2 Mobile phones
3.3.3 Mobile phone use
3.3.4 Mobile users flocking to email, data
3.3.5 Content and services accessed – 2009 - 2010
3.3.6 Information services
3.3.7 Advertising on the mobile phone
3.3.8 M-commerce
3.4 International Data Corporation (IDC) – mobile broadband competitive analysis
3.5 Mobile internet bigger than desktop internet
3.6 Revenue statistics
3.6.1 Average revenue per user (ARPU)
3.6.2 Mobile data revenue
3.7 Mobile media providers
3.7.1 Mobile operators
3.7.2 Service providers
4. PSMS Portals and Apps
4.1 The market in 2011
4.2 Previous analyses (updated in 2011)
4.2.1 The demise of the carrier’s portal market
4.2.2 M-payments last straw for portal market
4.2.3 Portal-based content models were flawed
4.3 Smartphone apps market
4.3.1 Background overview
4.3.2 Usage and statistics
4.4 Subscription-based content services
4.5 Consumer protection
4.6 Key players in the premium rate SMS (PSMS) market
4.6.1 International players
4.6.2 National players
4.7 PSMS revenues
4.7.1 Market projections – 2011
5. Mobile TV
5.1 What is mobile TV?
5.1.1 On-demand mobile TV
5.1.2 Broadcast mobile TV
5.2 Market overview and analysis
5.2.1 Smartphone market analysis
5.2.2 Pursuing wrong business models
5.2.3 Device and content-driven developments
5.2.4 Key market – the youth segments
5.2.5 Mobile TV is dead – long live mobile video
5.3 Major players
5.3.1 Overview
5.3.2 VHA – Hutchison’s Planet 3 and Vodafone Central
5.3.3 Telstra’s BigPond mobile TV
5.3.4 Optus
5.3.5 myTVR
5.4 Regulation
5.4.1 Spectrum for mobile broadcasting
5.5 Technology platforms
5.5.1 Multimedia Broadcast/Multicast Service (MBMS)
5.5.2 Digital Video Broadcasting-Handheld (DVB-H)
6. SMS – Overview and Statistics
6.1 Introduction
6.2 SMS market overview
6.2.1 Operators
6.2.2 Forecasts and analysis
6.2.3 Is mobile voice over internet protocol (MoIP) a threat to SMS and voice revenues?
6.2.4 SMS regulation
6.3 Overview of SMS services in Australia
6.3.1 Background information
6.3.2 SMS lotteries
6.3.3 SMS betting
6.3.4 SMS service for people with disabilities
6.3.5 SMS advertising
6.3.6 Business SMS
6.4 Usage statistics
6.4.1 Analysis of market trends into 2012
6.4.2 Statistical trends into 2012
7. M-Commerce Developments and Projects
7.1 Overview and analysis of m-commerce in Australia
7.1.1 Introduction
7.1.2 Development of m-commerce in Australia
7.1.3 Research indicates consumers wary of telcos for payment options
7.1.4 Apps need m-payments
7.1.5 Developments in Australia
7.1.6 Closed systems
7.2 M-payment projects and services
7.2.1 mHITs
7.2.2 Visa’s payWave service for the National Australia Bank (NAB)
7.2.3 MasterCard PayPass
7.2.4 Near Field Communications (NFC)
7.3 Mobile banking (m-banking)
7.3.1 M-banking overview
7.3.2 Commonwealth Bank of Australia (CBA)
7.3.3 Australia and New Zealand Bank (ANZ)
7.3.4 NAB
7.3.5 Westpac
7.3.6 Public transport payments
7.4 Other m-commerce developments
7.4.1 SMS m-commerce
8. Smartphone Market
8.1 Predictions for 2011
8.2 Rise of smartphones
8.2.1 Smartphone overview
8.2.2 The Apple iPhone
8.2.3 Skype
8.3 Smartphones lead to higher data spend
8.4 Australians are smartphone fanatics
8.5 iPhone takes out top spot globally
9. Glossary of Abbreviations
Table 1 – Wireless broadband subscribers by access type and annual change – 2007 - 2012
Table 2 – 3G mobile broadband subscribers by mobile operator – 2007 - 2011
Table 3 – Total fixed mobile broadband revenues and annual change – 2007 - 2011
Table 4 – Mobile broadband monthly ARPU – 2007 - 2012
Table 5 – Estimated mobile broadband revenue revenues by operator – 2008 - 2011
Table 6 – Fixed wireless broadband subscribers by major operator – 2008 - 2011
Table 7 – Forecast mobile broadband and voice revenues – 2008; 2013; 2018
Table 8 – Telstra average mobile broadband revenue per user per month – 2008 - 2012
Table 9 – Blended mobile data ARPU per customer by operator – 2011
Table 10 – Estimated mobile data revenue by operator – 2009 - 2011
Table 11 – Overall estimated total mobile data revenue – 2008 - 2012
Table 12 – Cost of a music download for Vodafone pre/postpaid versus 3 subscribers – 2011
Table 13 – Estimated revenues – PSMS market – 2004 - 2011
Table 14 – Estimated numbers of SMS sent – 2003 - 2012
Table 15 – Number of SMS sent using Telstra – 2005 - 2012
Table 16 – Payment plan data – 2009 - 2010
Table 17 – Percentage of paid-for applications
Table 18 – Customer loyalty with operating system – % likely to stay with their existing operating system for next phone purchase
Table 19 – Use of advanced phone features – % of mobile users who access rich media and other smartphone features
Chart 1 – Estimated mobile broadband data downloaded in petabytes – 2007 - 2011; 2015; 2020
Chart 2 – Estimated mobile broadband revenue by operator – 2008 - 2011
Chart 3 – Average 3G mobile broadband speeds – 2008 - 2011
Chart 4 – Average 4G mobile broadband speeds – 2010 - 2011
Chart 5 – Use of technology by seniors – 2011
Chart 6 – Information services used by mobile phone users – 2009 - 2010
Chart 7 – Australian apps market revenue estimates – 2009 - 2015
Chart 8 – Australian mobile user app usage – 2010
Chart 9 – Estimates of smartphone units in Australia – 2011; 2013; 2015
Chart 10 – Estimated revenues – PSMS market – 2004 - 2011
Chart 11 – PSMS revenue mix of downloads
Chart 12 – PSMS estimated market share by operator – 2011
Exhibit 1 – BigAir Group Limited at a glance – 2011
Exhibit 2 – vividwireless (Unwired Australia Pty Ltd) at a glance – 2010
Exhibit 3 – Key issues for mobility industry
Exhibit 4 – Be.interactive clients and partners
Exhibit 5 – Be.interactive mobile services
Exhibit 6 – Gemalto
Exhibit 7 – Key national and major smaller players in the PSMS market
Exhibit 8 – Examples of mobile TV technologies
Exhibit 9 – Broadcast Australia DVB-H trials – 2005 - 2009




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