Despite global uncertainty and an unpredictable economic crisis due to the coronavirus pandemic, the Australian telecommunications industry remains fairly stable. Australia’s telecommunications sector is amongst the most dynamic and developed industries in the world. With telecom and data infrastructure being vital in a connected world, it is proving to be a central infrastructure service to national economies around the world. The data infrastructure is likely to attract a new class of investors such as large infrastructure funds. Further, experts forecast that mobile subscriptions will continue to grow in the 2020–25 period while fixed broadband subscribers will grow at a slightly lower rate over the same period.
Major Trends
- Mobile Subscribers and Revenue
Between 2014 and mid-2020, the mobile subscriber base market expanded with Telstra and Optus dramatically growing their postpaid subscriber bases. The number of Australian mobile subscribers will further rise as a result of population growth and the adoption of the Internet of Things. Vodafone is also providing some amazing Vodafone postpaid offers.
Mobile network operators are facing serious competition with the market shifting to unlimited voice and text and data allowance as the differentiator. Operators such as Vodafone are bundling mobile plans with content offerings such as sport, music, and video streaming. Unfortunately, Australia is in a vulnerable position as the only country in the developed world with a higher average mobile speed compared to fixed broadband.
- Broadband Subscribers & the NBN
Experts estimate that the broadband subscriber growth will be sustained by household growth and a reduction of the number of underserved premises previously not able to connect now served by the Internet but now served by the NBN.
The NBN project is still a political hot potato in the region. The NBN has been unable to fix a faulty pricing system, which includes a controversial consumption fee, resulting in high pricing and a wholesale inability to offer competitive gigabit speeds.
- NBN Enterprise Products
The NBN product rollout plan has sparked a lot of discussion in the industry. On one hand, the NBN launched a strategy aimed at high ARPU enterprise customers, investing in a dedicated team reporting to the CEO, whilst the industry claims that the NBN’s push to overbuild existing fibre infrastructure — is beyond its remit and that capital investments should be made elsewhere.
On the other hand, the NBN product service is generating new markets in areas where enterprise fibre networks were not previously available. As a result, smaller specialist business ISPs have more resources to extend their reach and services, targeting the small and medium market segment that is largely ignored by large operators.
- Thematics — 5G/NBN/M&A
The arrival of 4G moved the Internet from our desktops to our palms, 5G could turn the network from something we bring around to something that takes us around either digitally (virtual reality) or physically (autonomous vehicles). However, the 5G outcome and benefits except fast communication remain largely uncertain in terms of business models, investments, and timelines.
With 5G now a reality in Australia, telecoms can now arbitrage NBN speeds in places where copper lines are very long or in bad health, allowing them to deliver a better service over 5G than NBN at an equal price for certain consumer segments and geographies.
Where does Vodafone stand? Future Plans of the Telecom Industry!
As data usage and speeds continue to increase, Vodafone sees infinite unlimited data as the way of the future. Though the TPG and Vodafone merger was contented and opposed amid fears for worse outcomes for consumers, Vodafone argued that they needed to combine their resources to better compete with other operators, foster competition, and provide better outcomes for consumers, and that’s what is actually happening. The newly merged entity will be one of the biggest telecommunications companies in Australia.
Further, Vodafone offers and schemes are aiming to compete with the two larger telcos with an NBN-home internet product. Optus was the first to launch the 5G Home Broadband, which would use Australia’s latest 5G mobile networks to offer limitless data at speeds higher than the most common NBN plans at around the same price. Telstra announced plans to offer a 5G home wireless solution of its own and would begin offering 5G fixed wireless products soon.
With a strong and sustainable third mobile network operator such as Vodafone, Vodafone’s data plans and offers will have the opportunity and incentive to compete for customers in the coming future.
