Whichever way the election dice rolls, 2008 will be a very interesting year for the Australian telecoms industry.
The stakes are high, with close to $5 billion in the government coffers allocated for telecoms. There is also a unanimous understanding within the industry that, unless the foundations are right, this money could be easily wasted.
The Labor Party has indicated its commitment to structural changes, and there is little doubt that the Coalition would also move in that direction if Telstra failed to adhere to the outcomes of the Expert Task Force. It is still possible that Sol Trujillo could pre-empt all of this and start his own structural separation. As his personal windfall from that could run into tens of millions of dollars, it must be a very tempting proposition for him.
In the meantime, the regulatory changes that were established in late 2006 are starting to come into effect. The margins of the 2nd tier players are improving slowly, and this is predicted to continue during 2008 and 2009.
Any effect of more structural changes won’t become noticeable before 2009 and it will be very interesting to see what those changes will mean for the industry.
Because such changes will have far reaching consequences, companies will need to make their own assessments and plan to be well prepared for what may happen.
These issues and scenarios will be discussed at the annual State of the Industry Roundtables.
‘State of the Industry’ Roundtables with Paul Budde
cost $425 pp excl GST
Sydney – Wednesday 26 September 2007
Melbourne – Thursday 27 September 2007
Theme: Australian Telco Market moving into 2008
Next year the Australian telecoms market will top the $37 billion mark, with another $1.5 billion being added to that figure by 2009. Although the percentage growth might not look all that spectacular, when it is expressed in dollars it shows the power of this industry.
Over the last decade Telstra’s market share has only dropped by 5%; they still control two thirds of the total market; Optus is hovering around 20% market share and the other 600 providers squabble over the remaining 13%.
The smaller telcos are slowly seeing an improvement in their margins. In 2000, 48% of their total revenue went to Telstra in wholesale charges. Now this percentage is 44% and we estimate that, due to a better wholesale regime, this will further improve to 42% in 2009. At the same time the wholesale market is growing at twice the growth rate of the retail market, so the overall value of the 2nd tier market is slowly increasing in relation to Telstra and Optus.
The biggest slice of the market goes to mobile. Since 2000 its share of the total telecoms market grew from 25% to 37%. Total value grew from $6.5 billion in 2000 to $13 billion in 2007. Another billion will be added to this already significant figure over the next few years.
In 2005 Telstra’s market share in the mobile market had dropped to 40%. However, the company launched a fierce campaign following the arrival of Sol Trujillo and by 2007 had achieved a 42% market share and this could grow to 44% in 2009. Telstra’s market share increase is hurting Optus most as it depends, to a large extent, on mobile revenues (mobile accounts for 56% of total Optus revenues).
The data market remains the fastest growing market in overall terms, with a growth percentage of around 13% per annum for the 2007 – 2009 period. With the broadband market rapidly approaching 5 million subscribers, more than 60% of the population has access to email and Internet at home and close to 80% of the population has access to these services at work or school.
Data revenues, which include broadband and dial-up Internet will grow from $6 billion in 2007 to $8 billion in 2009, representing the largest growth in the industry. Telstra also dominates this market with a 66% market share. Under the current industry structure, we don’t expect any change in that percentage over the next few years.
Presentations and discussions will mainly concentrate on the latest results of our new Australian reports that we will publish at the same time.
I will bring you up to date regarding the latest research data and, perhaps more importantly, analyse the market with you – highlighting the areas where opportunities exist.
09.30 – 10.00Arrival and coffee
10.00 – 10.15Welcome, introduction of delegates
10.15 – 11.15Analyses of the Australian Telecommunications Industry (Revenues, Market shares, Trends and Developments) Analyses of Telstra, Optus, AAPT, Vodafone and Hutchison.
11.15 – 11.45Morning coffee
11.45 – 12.15Second tier industry
12.15 – 12.45Statistics, Trends and developments in access, infrastructure fixed voice.
12.45 – 13.45Light lunch
13.45 – 14.15Statistics, Trends and developments in mobile, Internet, Broadband
14.15 – 14.45Forecasting triple play, digital media. Conclusions.
14.45 – 15.10Afternoon coffee
15.00 – 16.30 Roundtable discussion
$425 per person (excluding GST) – this includes morning/afternoon coffee and lunch
The Observatory Hotel
89-113 Kent Street, Sydney
Online registration: http://www.budde.com.au/consultancy/public-workshops-seminars.html
Telephone: 02 4998 8144
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