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Australia - Mobile Infrastructure

  • August 2015
  • -
  • Paul Budde Communication Pty Ltd
  • -
  • 137 pages

Australian MNOs aiming for near-national LTE coverage
Despite pressures on pricing, revenue is expected to show continued growth for fiscal 2015, though future revenue growth will be impacted by continuing activity from a number of the larger MVNOs Positive growth offsetting downward pressure on mobile voice revenue should be expected from mobile data services as the reach of LTE networks is extended into 2016. For the MNOs, the latest results are positive. Telstra reported a 9.8% increase in mobile revenue in the year to December 2014, while Optus recovered from revenue decline in FY2014, recording a 6.7% increase in FY2015. VHA, which has been dogged by steep revenue declines for a number of years on the back of customer disaffection with service offerings, reported a 2.9% increase in revenue for the first half of 2015, supported by a 2.1% increase in its subscriber base. The operator’s investments are clearly beginning to deliver rewards, resulting in a change in customer sentiments as it addresses popular concerns over poor network quality and stability.

Continuing dominance of the triopoly players
Australia’s mobile market continues to be dominated by the three major mobile network operators Telstra, Optus, and Vodafone (VHA). Voice services remain a staple for revenue for all three, though in terms of revenue share voice is steadily losing ground to various forms of mobile data, which has evolved from basic SMS messaging to encompass high-end applications including gaming and m-commerce.

To address poor mobile services in rural areas, the government in June 2015 announced the first of two Mobile Black Spot Programs, funded by the federal and state governments as well as by the two commissioned MNOs Telstra and Vodafone. The work to deploy some 500 new or upgraded base stations will start at the end of 2015 and be completed by 2018.

Infrastructure moving to 4G, with 5G on the horizon
From the mid-2000s consumers took to 3G in earnest as they migrated from 2G networks. In line with the migration of 3G, operators such as Telstra plan to discontinue 2G-based networks are repurpose spectrum, for 3G and 4G use. Nevertheless, 2G retains a use in specific areas such as M2M applications.

Just as 3G grew to dominate the mobile landscape, so is its dominance now fast fading as LTE networks gain headway and consumers migrate to the new technology. By mid-2015 Vodafone provided 90% metro population coverage with its LTE infrastructure, while both Optus and Telstra are each ramping up to 98% coverage by the end of 2016. Already, up to 80% of all new smartphones sold are LTE-capable.

Steady subscriber growth maintained
Growth in the number of mobile subscribers in Australia has slowed in recent years, reflecting the relatively high penetration rate, which my mid-2015 had reached about 137%. Although a significant proportion of subscribers make use of multiple phones or SIM cards, growth is stimulated by a steady increase in the population. Operators can also expect to benefit from further migration among consumers from fixed-line to mobile telecoms, supported by the practical benefits to consumers of improved quality of mobile data services resulting from network upgrades and the wide-scale reach of LTE infrastructure.

Spectrum policy changes to improve regional services
Following the auction of spectrum in the 700MHz band in early 2015, licensees have been able to makes use of their concessions since January 2015. This has led to a rapid extension of mobile broadband availability across most areas of the country, and involved each MNO investing more than a billion dollars annually in network upgrades. Competitive pressure among the MNOs is ensuring that more funding is being made available to upgrade these networks to 2017 at least. In addition, the government in mid-2015 released funds for its two-stage Mobile Black Spot program, while a pending licensing procedure affecting the 1800MHz band will see improved mobile services in rural regions.

Smartphone market hand-in-hand with network improvements
Smartphone use in Australia continues to grow among consumers, with the smartphone sector now accounting for about 80-90% of all new devices sold. Smartphones and tablets are becoming a dominant internet access channel among the younger demographic. In addition, these devices are beginning to dominate overall e-commerce, being used in about a third of all e-commerce transactions. This proportion will increase into 2016 in line with the availability of devices with larger screens, more mobile-friendly websites, easier payment systems and a widening availability of faster mobile networks.

Key developments:
Vodafone switches LTE data traffic to new core network, reports 2.9% growth in revenue for the first half of 2015;
Vodafone and Telstra prep for launch of VoLTE services;
Telstra commits to $5 billion mobile spend over three years;
4G subscriber base increasing;
Rapid growth in phablet sales impacts tablet market;
Smartphone penetration showing sustained growth;
Report update includes telcos’ financial and operating updates to June 2015; recent market developments.

Companies mentioned in this report:
SingTel, Vodafone, 3, VHA, Optus, Telstra, AUSTAR, unwired, Vividwireless, NBC, Optus, AAPT, Hutchinson, Walker Wireless, ActewAGL, NBN, Amaysim, Woolworths, Crazy Johns, JB HiFi, Virgin Mobile, Aldi Mobile; Huawei, Lebara, AAPT, Kogan Mobile, GRLmobile, Red Bull Mobile, Macquarie Telecom, Boost Tel, Pivotel, Globalstar.

Table Of Contents

Australia - Mobile Infrastructure
1. Industry overview
1.1 Background information
1.2 Subscriber statistics
1.3 Mobile coverage black spots
1.4 Rural Australia in favour of NBN mobile services
1.5 Mobile calling plan standardisation a start to a clearer choice
1.6 Roaming
1.7 NBN as backhaul
1.8 Mobile technology boost productivity
1.9 Cutting the fixed-line cord
1.10 Mobile consolidation is unavoidable
1.11 Data mining the next driver of mobile revenue
1.12 Mobile Network Operators (MNOs)
1.12.1 Telstra
1.12.2 SingTel Optus
1.12.3 Vodafone Hutchison Australia (VHA)
1.13 Network technologies
1.13.1 HSPA-based services
1.13.2 Long-term Evolution (LTE)
1.13.3 2G services (historic)
1.14 Mobile Virtual Network Operators (MVNOs)
1.14.1 Background on the MVNO sector
1.14.2 Market overview
1.14.3 Other developments in the MVNO market
1.14.4 Amaysim
1.14.5 Red Bull Mobile
1.14.6 Kogan Mobile
1.14.7 Aldi Mobile
1.14.8 Lebara Mobile
1.14.9 Macquarie Telecom
1.14.10 Virgin Mobile
1.14.11 Woolworths Mobile
1.15 Mobile resellers
1.15.1 Background information
1.15.2 Resellers on the Telstra network
1.15.3 Resellers on the Optus network
1.15.4 Resellers on the Vodafone network
1.16 Mobile Virtual Network Enablers (MVNEs)
1.16.1 Background information
1.16.2 Pivotel
1.16.3 M2 Telecommunications Group
2. Mobile retail market
2.1 An overview of the mobile retail market
2.1.1 Major retail categories
2.1.2 Retail margins
2.1.3 Retail revenues
2.1.4 Consolidation
2.1.5 The move from prepaid to postpaid
2.1.6 Mobile broadband (separate report)
2.1.7 Superior customer care to come from a new TCP Code
2.1.8 Mobile calling plan standardisation a start to a clearer choice
2.1.9 Replacement market
2.1.10 Wholesale aggregators
2.2 Major mobile retail companies
2.2.1 Background information
2.2.2 Vertically integrated operators
2.2.3 Independents retailing services exclusively for mobile operators
2.2.4 Independents retailing services for a variety of network operators
3. Statistical overview of the mobile market
3.1 Revenue overview and statistics
3.1.1 Statistical sources
3.1.2 Total mobile services revenue and forecasts
3.1.3 Operator revenue statistics overview
3.1.4 Average revenue per user (ARPU)
3.2 Subscriber statistics
3.2.1 Statistical sources
3.2.2 Mobile subscriber statistics
4. Mobile infrastructure
4.1 Spectrum overview
4.1.1 Overview
4.1.2 Spectrum regulations
4.1.3 ACMA five-year outlook 2012 - 2016
4.1.4 Spectrum-based services
4.1.5 Spectrum ownership and licences
4.2 Spectrum auctions
4.2.1 Introduction
4.2.2 Digital dividend auction 2013
4.2.3 500MHz frequency
4.2.4 800MHz and 1.8GHz frequencies
4.2.5 1880-1920MHz (1.9GHz) frequency
4.2.6 2010-2025MHz frequencies
4.2.7 2.3GHz band
4.2.8 Unused 2GHz spectrum
4.2.9 3.4GHz frequencies
4.2.10 3G Auctions
4.3 3G and 4G infrastructure
4.3.1 Background information
4.3.2 Network operators
4.3.3 Mobile sites infrastructure
4.3.4 Infrastructure analysis
5. Mobile satellite services
5.1 Introduction
5.2 Second generation satellites with Globalstar to benefit rural Australians
5.3 Twitter on satellite phones
5.4 Public subsidies and regulation
5.4.1 Overview
5.4.2 Mobile satellite service band plan
5.4.3 Mobile satellite phone subsidies
5.5 Overview of operators
5.5.1 Telstra
5.5.2 Optus
5.5.3 Pivotal Group
5.5.4 VIX QuikTrak
5.5.5 AST Australia
5.5.6 Addcom
5.5.7 Indigo Telecom
5.5.8 FedSat Australia's low earth orbit satellite (historic)
5.6 Usage and revenue estimates
5.6.1 Background information
5.6.2 Revenue
6. Smartphones, tablets and handset market
6.1 Market overview
6.1.1 Trends in mobile handset market
6.1.2 4G market continues to grow
6.1.3 Telstra's T-Hub 2 moving fixed-line customers to the future NBN
6.2 Predictions into 2015 and beyond
6.2.1 Smartphone data usage increasing
6.2.2 Tablets and e-readers
6.3 Smartphone, tablet and handset statistics
6.3.1 Shipments
6.3.2 Handset recycling
6.3.3 Handset supplier market shares
6.3.4 Smartphones and internet usage
6.3.5 Tablet sales reaching a plateau
6.3.6 Smartwatch market
6.4 Analysis
6.4.1 Mobile vendors set to lose the proprietary battle
6.4.2 Mid-tier mobile phones to decline
6.5 Market surveys
6.5.1 Overview
6.5.2 Smartphones lead to higher data spend
6.5.3 Smartphone users are action buyers
6.5.4 Tablet usage strong but sales decline
6.5.5 Android remains the favoured operating system
6.5.6 Enterprise mobility market increasing in value
6.6 The future of the smartphone market
6.6.1 Hardware becomes a utility platform
6.6.2 Platform for innovation and industry transformation
6.6.3 Breaking into new markets
6.6.4 Who will dominate the Wi-Fi market?
6.6.5 Conclusion
6.7 Wearable technology
Table 1 Mobile market subscribers, penetration rate and annual change 2010 2015
Table 2 Total mobile services market revenue and annual change 2010 2015
Table 3 Mobile subscriber gains and losses by MNO 2009 2014
Table 4 Mobile-only phone users 2010 - 2014
Table 5 Telstra - overview of mobile subscribers 2008 - 2014
Table 6 Optus revenue 2012 - 2015
Table 7 Optus mobile pre/postpaid customers 2008 - 2015
Table 8 VHA subscribers by type 2009 2015
Table 9 VHA MVNO customers 2014 2015
Table 10 Mobile subscribers share by MNO and MVNO 2014 2015
Table 11 Pivotel Globalstar satellite data costs July 2015
Table 12 Selected retailers number of outlets by state
Table 13 The wholesale market in Australia - key players - 2014
Table 14 Historic - Total mobile services market revenue and annual change 1993 - 2004
Table 15 Total mobile services market revenue and annual change 2005 - 2015
Table 16 Telstra mobile services revenue 2009 - 2015
Table 17 Vodafone Australia revenue 2009 - 2015
Table 18 Optus key financial indicators 2009 - 2015
Table 19 Optus mobile revenue 2013 2015
Table 20 Historic - Mobile market revenue per major operator 1993 - 2004
Table 21 Historic - Annual change of mobile market revenue per major operator 1994; 1997; 2000 - 2004
Table 22 Annual change of mobile market revenue per major operator 2005 - 2015
Table 23 Mobile market share in revenue per major operator 2000 - 2015
Table 24 Estimated mobile service revenue by service, proportion of total 2007 - 2015
Table 25 Telstra mobile and broadband revenue 2009 - 2015
Table 26 Blended monthly ARPU by MNO 2000 - 2015
Table 27 Annual change in blended monthly ARPU by MNO 2004 - 2015
Table 28 Telstra postpaid ARPU per month 2004 - 2015
Table 29 Optus postpaid ARPU per month 2004 - 2015
Table 30 Mobile market subscribers, penetration rate and annual change 2000 - 2015
Table 31 Historic - Mobile subscribers by carrier 1993; 1997; 2000 - 2004
Table 32 Vodafone subscribers by type 2009 2015
Table 33 Telstra mobile subscribers 2008 - 2014
Table 34 Optus mobile subscribers 2008 - 2015
Table 35 Historic - Annual change of mobile subscribers by carrier 1995; 1997; 2000 - 2004
Table 36 Annual change of mobile subscribers by carrier 2005 - 2015
Table 37 Historic - Mobile subscriber market share by carrier 1993; 1997; 2000 - 2004
Table 38 Mobile subscriber market share by carrier 2010 - 2014
Table 39 Historic - 3G mobile subscribers by carrier 2003 - 2011
Table 40 Historic - Annual change of 3G mobile subscribers by carrier 2007 - 2011
Table 41 Proportion of 3G mobile subscribers versus total subscribers by carrier 2006 - 2014
Table 42 Historic - 2G mobile subscribers by carrier 2006 - 2011
Table 43 Historic - Annual change of 2G mobile subscribers by carrier 2006 - 2011
Table 44 Average LTE speed by MNO 2012 - 2015
Table 45 Vodafone prepaid and contract subscribers 2009 2015
Table 46 Optus mobile pre/postpaid customers 2008 - 2015
Table 47 Telstra mobile subscribers 2009 - 2014
Table 48 Telstra wholesale subscribers 2009 - 2014
Exhibit 15 Expiring spectrum allocation timetable 2015 - 2028
Table 49 The 500MHz spectrum licences 1997
Table 50 Spectrum charges for spectrum bandwidth licenses expiring in 2013
Table 51 Mobile base stations 2009; 2011 - 2015
Table 52 Crown Castle mobile tower acquisitions
Table 53 Pivotel Globalstar satellite data costs July 2015
Table 54 Telstra mobile satellite users 2009 - 2014
Table 55 Optus satellite revenue 2007 - 2015
Table 56 Smartphone market share by carrier 2013 - 2014
Table 57 Smartphone ownership by age group 2013
Table 58 Internet connections via mobile handsets 2011 - 2014
Table 59 Australian handset shipments (historic) 2004 - 2008
Table 60 Australian handset shipments 2009 - 2015
Table 61 Key recycling indicators Mobile Muster 2006 - 2013
Table 62 Australian handset brand market share major suppliers 2008 - 2013
Table 63 Use of advanced phone features % of mobile user accesses of rich media/smartphone features - 2013
Table 64 Top 5 uses of mobile internet 2009 - 2014
Table 65 Estimated tablet users 2010 - 2012; 2015 - 2016
Table 66 Low-end, mid-tier and high-end mobile device markets percentage of units sold 2007; 2013.
Table 67 Apps info and payment plan data 2009 - 2013
Table 68 Monthly phone spend on services 2010 - 2013
Table 69 Types of use on smartphones 2012 - 2013
Table 70 Smartphone app use by age group 2013
Table 71 Smartphone and tablet use of services 2014
Table 72 Typical selected usage pattern of a tablet user 2012 - 2013
Table 73 Estimated Australian platform market share 2008 - 2014
Chart 1 Mobile market subscribers, penetration rate and annual change 2005 - 2015
Chart 2 Mobile subscriber gains and losses by MNO 2010 2014
Chart 3 Optus mobile pre/postpaid customers 2008 2015
Chart 4 Telstra mobile services revenue 2009 2015
Chart 5 Overview of Vodafone Australia revenue 2009 - 2015
Chart 6 Optus key financial indicators 2009 2015
Chart 7 Overview of mobile revenue share per major operator 2000 - 2015
Chart 8 Telstra mobile and broadband revenue 2010 2015
Chart 9 Overview of blended monthly ARPU by MNO 2005 - 2015
Chart 10 Overview of mobile market subscribers versus population 2005 2015
Chart 11 Overview of annual change of mobile subscribers by carrier 2005 - 2014
Exhibit 1 The initial analogue operators brief historic background
Exhibit 2 MVNO models
Exhibit 3 MVNO opportunities
Exhibit 4 Mobile carriers and selected MVNOs 2014
Exhibit 5 Examples of key MVNO customer segments
Exhibit 6 Amaysim at a glance
Exhibit 7 Mobile carriers and selected resellers and MVNEs
Exhibit 8 An overview of Boost Tel
Exhibit 9 Pivotel Communications at a glance
Exhibit 10 Strathfield Group a brief background look at its services
Exhibit 11 Background information on the 3G race by the MNOs
Exhibit 12 700MHz reallocation 2011 - 2014
Exhibit 13 Digital dividend spectrum
Exhibit 14 Proposed 2.5GHz reallocation 2011 - 2016
Exhibit 16 Allocations for wireless access services (WAS) 2009
Exhibit 17 Mobile spectrum by operator in capital city and regional area
Exhibit 18 GSM services by operator
Exhibit 19 WCDMA services by operator
Exhibit 20 Ownership of selected frequencies for 2.3GHz and 3.4GHz services 2015
Exhibit 21 An overview of the digital dividend auction timeline 2010 - 2015
Exhibit 22 700MHz and 2.5GHz auction results 2013
Exhibit 23 Companies initially showing interest in the 800/1800MHz auctions
Exhibit 24 Catapult
Exhibit 25 Auction results
Exhibit 26 Final 1.8GHz spectrum auction results
Exhibit 27 The 1900-1920MHzGHz spectrum auction results
Exhibit 28 The 2.3GHz spectrum auction results 2011
Exhibit 29 3.4GHz initial bidders August 2000
Exhibit 30 Final 3.4GHz October 2000
Exhibit 31 3G auction results per bidder 2001
Exhibit 32 Pivotel Communications at a glance

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