BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Telecomunications sector Of Australia

BMI’s newly published Australia Telecommunications Report shows how Telstra continues to shape, and indeed dominate Australia’s telecoms industry. The operator’s strategy to transform its own business activity is having a dramatic impact on the sector. Through its investment in its 3G network, the operator is ensuring that there is still some growth in the mobile market despite a penetration of around 100%. Furthermore, Telstra is offsetting the decline in fixed telephony by enhancing its broadband infrastructure. This has caused migration away from dial-up usage towards high-speed broadband services with Telstra’s BigPond network largely responsible for this change. And broadband is not just available as a fixed-line technology, with Telstra’s NEXTG mobile network featuring mobile broadband services.

Partly as a result of this, we have amended our mobile, and especially 3G mobile forecasts considerably. All four of Australia’s 3G operators have invested heavily in upgrading their next generation networks. Although Hutchison remains dominant, this is now far less apparent, with Telstra now taking a 34% share of Australia’s 3G market, only just behind Hutchison on 41%. Telstra expects to take over as market leader by the end of H107. Such competition, allied with strong consumer demand for high-speed mobile data services, is pushing growth, so much so that BMI expects about 75% of all Australia’s mobile customers in 2011 to have access to 3G services. This will require an annual average growth rate of 93%. In terms of Australia’s 2G market, penetration is now just over 100%, and as such we see little potential for growth in new subscriber numbers. BMI forecasts a total of 22.7mn mobile customers by the end of 2011.

Aside from 3G mobile telephony, the real growth driver in Australia’s telecoms industry is broadband. Again it is the increased investment from the likes of Telstra and Optus that is pushing growth, so much so, that we project Australia will have 10mn broadband subscribers (up from 4.3mn currently) in 2010 and penetration should exceed 60% by the end of 2011.

Australia remains in second place in BMI’s Business Environment Rankings. Low risk, an open and competitive industry with a strong regulatory authority and all major operators looking to invest in their networks suggest a good business environment. Added to this, the future of Telstra seems clearer than it has for a long time following its successful privatisation. Perhaps, and despite the competitiveness of the market, Telstra has become a little too dominant, but it is up to Optus, Vodafone, Hutchison, AAPT and PowerTel to apply pressure on the lead operator. Growth in Australia’s next generation mobile and broadband industries depends on Telstra, but also on the presence of strong competition. Certainly, the consumer demand is there for Australia’s alternative operators to take some benefit.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - Business Environment

Asia

Australia

Table: Asia-Pacific Business Environment Ranking

Australia Business Environment Industry SWOT

Chapter 3 - Industry Forecast Scenario

Fixed-Line

Table: Australian Telecoms Sector – Fixed-Line – Historical Data & Forecasts

Mobile

Table: Australian Telecoms Sector – Mobiles – Historical Data & Forecasts

Internet

Table: Australian Telecoms Sector – Internet - Historical Data & Forecasts

Multimedia

Table: Australia Telecoms Sector – Historical Data & Forecasts

Chapter 4 - Macroeconomic Forecast Scenario

Economy To Accelerate As Exports Revive

Table: Australia – Economic Activity

Chapter 5 - Country Snapshot: Australia Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 6 - Competitive Landscape

Market Structure

Competitor Analysis

Table: Key Players – Australian Telecoms Sector

Table: Selected Operator Financial Parameters

Key Players

Fixed-Line Overview

Table: Regional Fixed-Line Penetration Overview

Mobile Overview

Table: Regional Mobile Penetration Overview

Internet Overview

Table: Regional Internet Penetration Overview

Market Data Analysis

Fixed-Line

Table: Revenue Composition of Telstra PSTN Products, June 2006

Table: Australian Broadband Market, June 2006

Mobile

Table: Australian Mobile Market, June 2006

3G

Table: Australia 3G Market, June 2006

Industry Developments

Chapter 7 - Company Profiles

Regional Case Study – Motorola

Table: Motorola Net Sales by Region (US$mn)

Table: Motorola Market Sales by Locality of End Customer

Table: Leading Mobile Phone Handset Sales (mn) – Q306

Telstra

SingTel Optus

Vodafone Australia

Chapter 8 - BMI Forecast Modelling

How we generate our industry forecasts

Telecommunications Industry

Sources

Chapter 9 - Appendix: Regional Demographic Data

Table- Manufacturing Wages (ave per annum), US$

Table - Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Asia Telecommunications Reports: Sample of Companies Ranked

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Commentary on key operators highlighting ownership structures, latest available revenue figures, market share analysis and ARPU counts. BMI forecasts for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt. Company SWOTS Covering all leading telecommunications operators and manufacturers operating in each market, including competitive intelligence on geographic presence and competitive positioning against local companies; local market share; leading products, services and technologies; foreign direct investments, projects, merger and acquisition strategies.

Network of Asian Telecommunications Sources

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BMI's Asian Telecommunications Reports are based on an extensive network of multilateral organisations, government departments, telecommunications industry associations, chambers of commerce and company reports. Information sources include: