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Australia Telecommunications Report Q1 2013

Australia Telecommunications Report Q1 2013

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Additional Information

Price	$1,175.00
Publisher	Business Monitor International
Date of Report	Jan 16, 2013

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Quick Overview

BMI View: The Australian telecommunications industry is one of the highest value markets in Asia
Pacific and even the world, underpinned by high incomes and strong uptake of higher value services such
as broadband and smartphone handsets. However, subscription growth opportunities are severely limited
in the years ahead due to the highly saturated nature of the market. Operators are increasingly focused
on value generation strategies, although the drop in ARPUs in Q312 demonstrates this has yet to pay off
dramatically. However, the market is currently seeing high levels of investment in next generation
broadband technologies which we believe will buoy ARPUs through 2013.
Key Data:
?? While full data was not available for all the main operators, Optus and Vodafone have released
Q312 data. Optus finished Q312 with 9.5mn mobile subscribers, and Vodafone with 3.2mn.
?? Optus ARPU remained unchanged on Q212, at AUD43, down 8.5% y-o-y.
?? The number of internet subscribers in Australia grew to 12mn. Of these, 11.6mn were broadband
connections, of which 4.6mn were DSL, 5.9mn mobile, and 917,000 cable.
.
Key Trends And Developments
Telstra and Vodafone Hutchison Australia had yet to release data for Q312 at time of writing.
However, results from second-largest operator Optus were disappointing. Optus has reported that its
operating revenue for the quarter ended September 2012 fell by 4.2% y-o-y to AUD2.239bn while net
profit decreased by 10.0% to AUD164mn. The negative headline growth was attributed to the mandated
reduction in mobile termination rates, lower equipment sales and introduction of service credits
associated with device repayment plans. Given the mature Australian competitive landscape, we expect
Optus' recovery to be a gradual process.
It is difficuslt to strive for mobile subscriber growth in the mature market, and Optus has rightly decided
to focus on maximising revenue from its existing subscriber base. This is done through the deployment of
LTE services across the country (4G is online in Sydney, Melbourne, Perth and the Hunter Valley
region), upgrading the 3G network and bolstering of value-added services (VAS) portfolio such as the
acquisition of restaurant review website Eatability. Additionally, Optus has reduced the number of
employees from 9,726 in end-December 2011 to 9,069 in end-September 2012, and the operator will
continue to streamline its business.
Consolidation within Australia's fixed broadband industry has been a running theme in the last two years
due to the changing competitive landscape in light of the National Broadband Network (NBN). iiNet has
been one of the most aggressive operators in acquiring rivals butTelstra has finally responded after
reaching an agreement to purchase Adam Internet. By retaining the Adam Internet brand and expanding
the South Australian broadband business nationally, we expect Telstra to target the lower-end market,
which will be complementary to Telstra's traditional business.
In October 2012, AAPT emerged as a potential bidder for Australian fibre-optic backbone
operator NextGen Networks. The business, which is currently owned by the diversified Leighton
Holdingsgroup, is widely expected to be put up for sale as the parent seeks to streamline its investments
and improve its profitability. NextGen's 18,000km fibre-optic network and advanced regional data centres
are believed to appeal to AAPT as it strives to make itself more appealing to large enterprise customers in
Australia. However, there will be strong interest from other Australian broadband operators
and BMI believes AAPT will be reluctant to pay a premium for the business.

Table of Contents

Executive Summary ......................................................................................................................................... 5
SWOT Analysis ................................................................................................................................................. 7
Australia Mobile SWOT ......................................................................................................................................................................................... 7
Australia Wireline SWOT ...................................................................................................................................................................................... 8
Australia Political SWOT ...................................................................................................................................................................................... 9
Australia Economic SWOT .................................................................................................................................................................................... 9
Australia Business Environment SWOT ............................................................................................................................................................... 10
Risk/Reward Ratings ...................................................................................................................................... 11
Table: Asia Pacific Telecoms Risk/Reward Ratings Q113 ................................................................................................................................... 15
Australia ................................................................................................................................................................................................................... 15
Industry Forecast Scenario ........................................................................................................................... 17
Mobile ....................................................................................................................................................................................................................... 17
Table: Telecoms Sector - Mobile - Historical Data & Forecasts ........................................................................................................................ 17
ARPU ........................................................................................................................................................................................................................ 19
Table: Telecoms Sector - Mobile ARPU - Historical Data & Forecasts (AUD) ................................................................................................. 19
Fixed Line ................................................................................................................................................................................................................. 21
Table: Telecoms Sector - Fixed Line - Historical Data & Forecasts .................................................................................................................. 21
Internet ..................................................................................................................................................................................................................... 23
Table: Telecoms Sector - Internet - Historical Data & Forecasts ...................................................................................................................... 23
Market Overview ............................................................................................................................................. 25
Mobile ....................................................................................................................................................................................................................... 25
Regional Perspective ................................................................................................................................................................................................ 25
Table: Australia Mobile Market Regional Comparisons, 2011 ............................................................................................................................ 25
Key Developments: .............................................................................................................................................................................................. 26
Mobile Growth ..................................................................................................................................................................................................... 26
Market Shares ...................................................................................................................................................................................................... 27
Usage ................................................................................................................................................................................................................... 29
Networks .............................................................................................................................................................................................................. 30
Mobile Content/Value-Added Services ................................................................................................................................................................. 34
Mobile Contract Wins .......................................................................................................................................................................................... 39
Mobile Operator Data ......................................................................................................................................................................................... 40
Table: Australia Market Overview ....................................................................................................................................................................... 40
Table: Telstra ...................................................................................................................................................................................................... 40
Table: Optus ........................................................................................................................................................................................................ 41
Table: Vodafone Hutchison Australia .................................................................................................................................................................. 43
Mobile Content .................................................................................................................................................................................................... 44
Regional Outlook ................................................................................................................................................................................................. 44
Table: Selected NFC Developments, 2011 ........................................................................................................................................................... 45
Fixed Line ................................................................................................................................................................................................................. 50
Table: Telstra Fixed-Line Call Traffic ................................................................................................................................................................. 51
Internet ..................................................................................................................................................................................................................... 53
Table: Dial-up and Broadband Internet Subscriptions by Technology, December 2011 ..................................................................................... 53
Table: Australian Broadband Market June 2010-Dec 2011 ................................................................................................................................ 55
Wireline Contract Wins........................................................................................................................................................................................ 62
Industry Trends & Developments ................................................................................................................. 64
Regulatory Environment................................................................................................................................ 68
Australia: Regulatory Bodies And Their Responsibilities .................................................................................................................................... 68
Legislation And Market Liberalisation ................................................................................................................................................................ 70
Licensing And Spectrum ...................................................................................................................................................................................... 72
Regulatory Developments ......................................................................................................................................................................................... 72
Competitive Landscape ................................................................................................................................. 76
Key Players ............................................................................................................................................................................................................... 76
Table: Key Players - Australian Telecoms Sector ............................................................................................................................................... 76
Table: Selected Operator Financial Parameters ................................................................................................................................................. 76
Operator Profiles ............................................................................................................................................ 77
Telstra .................................................................................................................................................................................................................. 77
SingTel Optus ...................................................................................................................................................................................................... 82
Vodafone Hutchison Australia (VHA) .................................................................................................................................................................. 87
Company Monitor ........................................................................................................................................... 92
Table: Vendor Revenues (US$mn) ....................................................................................................................................................................... 92
Table: Net Sales By Geography (EURmn) ........................................................................................................................................................... 93
NSN Selected Asia Activities ................................................................................................................................................................................ 95
Table: Australia's Population By Age Group, 1990-2020 ('000) ......................................................................................................................... 98
Table: Australia's Population By Age Group, 1990-2020 (% of total) ................................................................................................................. 99
Table: Australia's Key Population Ratios, 1990-2020 ........................................................................................................................................100
Table: Australia's Rural And Urban Population, 1990-2020 ..............................................................................................................................100
Glossary Of Terms ....................................................................................................................................... 101
Table: Glossary Of Terms ...................................................................................................................................................................................101
BMI Methodology ......................................................................................................................................... 103
How We Generate Our Industry Forecasts ..............................................................................................................................................................103
Table: Key Indicators For Telecommunications Industry Forecasts ...................................................................................................................103
Telecoms Business Environment Ratings .................................................................................................................................................................105
Risk/Reward Ratings Methodology .....................................................................................................................................................................105
Table: Ratings Indicators ...................................................................................................................................................................................106
Weighting ............................................................................................................................................................................................................107
Table: Weighting Of Indicators ..........................................................................................................................................................................107
Sources ...............................................................................................................................................................................................................107