Australia Telecoms Industry Report 2021-2026: Capex Investments, Mobile Subscribers and Revenue, Broadband Subscribers & the NBN, NBN Enterprise Products, Thematics - 5G/Open-RAN/6G/M&A

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Dec 24, 2021, 09:00 ET

DUBLIN, Dec. 24, 2021 /PRNewswire/ -- The "Australia Telecoms Industry Report - 2021-2026" report has been added to ResearchAndMarkets.com's offering.

Australia has one of the most competitive and mature telecommunications markets in the world. Forecasts suggest that mobile subscriptions will continue to grow in the 2021-26 period while fixed broadband subscribers also expected to grow at a slightly lower average rate over the same period. The ratio of the telecommunications sector revenue to GDP is declining from a peak in 2000 to an all-time low in 2020.

The author forecasts the overall telecoms market is expected to decline until 2021 as NBN subscriber payments to Telstra will decrease gradually as all Telstra's copper and HFC services are migrated onto the NBN and market growth will resume from 2022 onwards.

Telstra's share of the telecommunications revenue pie has been declining over the last 5 years and its EBITDA share is declining even faster as Telstra's dominance in the fixed-line market is challenged with the migration onto the NBN.

Capex Investments

The capital expenditure (Capex) from telecommunications operators is coming off from an all-time peak between 2017 to 2018 due to the NBN investments in upgrading Australia's fixed broadband infrastructure. The author expects Capex investments to remain sustained to accommodate for data usage growth, mobile coverage expansion and capacity improvements. NBN expects an increasing Capex spend from 2021 to bring 75% of its fixed line footprint to 100Mbps speeds and above but excludes a clear plan to a gigabit speeds network upgrade to full-fibre. Instead, NBN will be required to continually invest in HFC and fixed wireless to increase capacity and accommodate more customers and higher data usage.

Mobile Subscribers and Revenue

The mobile subscriber market increased between 2014 and mid-2020 with Telstra and Optus growing their postpaid subscriber base and Telstra also increasing its MVNO and IoT subscribers significantly over the same period 2014-2020 period. The publisher estimates the Australian mobile subscribers will increase on the back of population growth and Internet of Things subscribers take-up.

Mobile network operators are facing competitive pressure with the market shifting to unlimited voice and text and data allowance as the sole offering differentiator. Operators are also bundling mobile plans with content offerings such as sport, music and video streaming.

Australia is now in the unfortunate position of being the only country in the developed world with a higher average mobile speed compared than fixed broadband as per Ookla speed tests.

The author expects 5G subscribers to represent 80% of all mobile subscribers by 2026.

Broadband Subscribers & the NBN

The publisher estimates the broadband subscribers 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 remains a politically contentious issue for the country. The NBN has failed to address a flawed pricing structure, including a contentious usage charge, resulting in high pricing and is a wholesale failure to deliver affordable gigabit speed in comparison to countries such as New Zealand or Singapore who launched national broadband plans at a similar time. For the third year in a row, NBN also shifted its forecasted positive cash flow position to 2023 after increasing its forecast Capex spend.

By 2023, forecasts suggests most subscribers migrated to NBN broadband services with a few remaining ADSL services in fixed wireless and satellites services and a number of fibre premises provided by greenfield operators and in-fill operators supplying wholesale services on the same terms as NBN. Opticomm, Uniti, Telstra with its legacy fibre Velocity estates and TPG are sharing the non-NBN market.

NBN Enterprise Products

The NBN enterprise product rollout strategy is creating a lot of industry debates. On one hand, the NBN embarked on a strategy targeting high ARPU enterprise customers while the industry is arguing that NBN's push in overbuilding existing fibre infrastructure - in some instances joining 6 other fibre providers competing to offer services in the same Melbourne CDB building - is not in its remit and capital investments should be directed to upgrade underserved areas or residential services in FTTN or HFC areas with poor speeds.

On the other hand, the NBN product service is also opening up new opportunities in areas where enterprise fibre services were not present prior to the NBN investment. This, in turn, is creating opportunities for smaller specialist business ISPs to broaden their footprint and offerings and address the small and medium market segment that is largely overlooked by the large operators such as Telstra, Optus, TPG and Vocus.

Thematics - 5G/Open-RAN/6G/M&A

The arrival of 4G moved the Internet off our desktops into our palms and pockets, 5G could transform the network from something we carry around to something taking us around either virtually (augmented reality or virtual reality) or in reality (autonomous vehicles), the 5G outcome and benefits beyond fast connectivity remain largely unknown in terms of business models, investments required and timeline.

With 5G a reality now in Australia, telco operators can now do an arbitrage of NBN speeds in areas where the copper lines are very long or in poor health and thus offer a faster service over 5G than NBN at an equivalent price for some segments of the market and some geographies.

This report shows subdued growth due to ARPU pressure compounded by margin pressure in the fixed broadband market is pushing telcos to look for outside opportunities to increase scale. The author expects another wave of consolidation in Australia, similar to the 2010-2015 period, post-NBN rollout as margins get squeezed further.

Smaller NBN resellers will struggle to compete and sell-out to larger operators. Some market players outside the telco market are seeking growth by exploring ways to increase their scope of products and services offerings. The report outlines examples of some newcomers branching out by reselling broadband access services as a churn reduction strategy and increase consumers' share of wallet.

Investment funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure. This report outlines some real market examples of how investors view and value these investments with real industry examples and EV/EBITDA comparatives and benchmarks.

This report provides analyses of revenue and market forecasts as well as statistics of the Australian telecoms industry including market sizing, 5-year forecasts, market insights, key telecom trends, 5G, digital infrastructure and also features the following:

Overall Telecommunications Market by Major Operators
Telco Operators Profile, Revenue and EBITDA Mix
Mobile Subscribers & Revenue Market Overview and Forecasts
Spectrum Holdings
IoT Market Overview
Broadband Subscribers & Revenue Market Overview and Forecasts
Digital Infrastructure (Fibre, Telecom Towers, Data Centres, Submarine Cables)
Telecom Tower Market Analysis and Forecast
Thematics/Opportunities relating to 5G, M&A and e-Commerce
Telco M&A Transaction Database

Companies Mentioned

AGL
Aussie Broadband
Exetel
Foxtel
NBN
Optus
Superloop
Telstra
TPG
Uniti Group
Vodafone
Vocus

For more information about this report visit https://www.researchandmarkets.com/r/1oyu4m

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