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Australia Telecommunications Report Q1 2011
Business Monitor International, Jan 2011, Pages: 103
Australia Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Australia's telecommunications industry.
Although the latest data on Australia’s mobile industry suggests that it is close to saturation, we believe that there are still growth opportunities in the country due to increasing demand for 3G services and efforts from operators to reach out to the rural population. We expect the number of 3G subscribers to increase by 88.8% to 33.048mn in 2015 from an estimated 17.506mn in 2009. BMI envisages the 3G subscriber base in Australia in 2015 to account for 97.9% of the total mobile subscriber base in Australia. Meanwhile, Australia’s National Broadband Network (NBN) took a step forward after the country’s senate passed a competition legislation designed to structurally separate fixed-line incumbent Telstra. In return for decommissioning its ageing copper networks and becoming a pure retail operator, the company will receive AUD11bn over the next 30 years. However, the actual separation is still subject to the approval of Telstra’s shareholders. That said, the drawn-out AUD35.7bn NBN is by no means concluded and ready to be rolled out. Independent senator Nick Xenophon said he will block key NBN legislations in 2011 as it would give Telstra special treatment, unless changes are made to the provisions.
Vodafone Hutchison Australia (VHA) and Telstra announced that their 2004 radio access network sharing joint venture (called 3GIS) for the shared 2.1GHz 3G network will conclude in 2012. The 3G network will be functional until 2012 and there will be no immediate impact on existing consumers. At the end of the agreement, network assets and spectrum from the network will be incorporated into other networks of Telstra and VHA to enable both companies focus on their individual strategies. Meanwhile, VHA announced major network investments to boost Vodafone’s 3G network in Australia. Investments include increasing the number of 3G sites across Australia and conducting LTE trials with Chinese vendor Huawei to increase its network capacity. The operator plans to introduce more initiatives in 2011 and aims to tap into the NBN for further expansion plans.
In BMI’s latest Business Environment Ratings for the Asia Pacific region, Australia remained in fourth position behind regional peers Japan, Singapore and South Korea. Australia’s high market average ARPU and GDP per capita means the country presents significant opportunities for investors interested in the country’s telecoms market. Australia’s telecoms regulator could receive a higher score if we see more initiatives – such as pushing for more mobile virtual network operator (MVNOs) – to improve the country’s competitive landscape.
Although Australia saw a firm GDP growth in Q210, we reaffirm that an economic slowdown is possible going into 2011. Chinese demand now makes up around 25% of total Australian exports, with iron ore and coking coals forming the majority of outbound shipments. This has helped Australia register trade surpluses for five consecutive months from April to August 2010, after being chronically in deficit since the 1990s. However, we highlight that the mining sector is just a small part of the broader economy, comprising only 6.9% of GDP.
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