In this report we provide an overview and analysis of the fixed and mobile broadband market including infrastructure statistics, major internet service provider statistics and information on the key providers. BuddeComm’s 2012 Australia Broadband Market – Overview and Statistics annual publication profiles key sectors in Australia’s broadband market.

This report also provides a statistical overview of the broadband market in Australia and includes an overview of the major network operators, wholesalers and retail service providers. The report also examines the developments in HFC networks, while the statistical sections of the report provide historical data as well as forecasts relating to fixed and mobile broadband usage, internet service providers and the business broadband market/sector.

Executive Summary

Fixed broadband market ready to move to high-speed

Australia is in a unique situation, where the government’s vision for the national broadband network (NBN) has received widespread support. The current stage of development is in progress and that includes fibre, satellite and wireless. These developments will bring faster broadband within the reach of all Australians by the end of the decade. The economic and social changes will be profound in areas such as e-health, smart grids and internet of things (IoT), as well as the businesses and individuals involved. The NBN developments are discussed in a separate publication.

In this publication BuddeComm profiles the existing fixed and mobile broadband by sectors – including business, residential, ADSL and HFC, as well as a whole sector overview.

In the businesses sector we see that by 2012 many businesses are now interested in IT applications, including video media and cloud computing.

Business broadband expansion continues, with many individual employees now also being connected to mobile broadband. These fixed and mobile developments are happening in parallel and are certainly mutually exclusive. Once faster speeds become more widely available we will see business use explode with the uptake of services such as software as a service, along with cloud computing, online interactions and media conferencing, all services that need high-speed broadband to succeed.

In the overview of the sector we provide key statistics and trends in relation to the Australian broadband market, and these are segmented by geographical area and the type of access technology. We also provide market share and access revenue statistics. In addition, segmentation by dial-up, fixed broadband and some wireless broadband is given in the publication. Statistical information is provided, including surveys by government departments such as the Australian Bureau of Statistics.

The internet service provider (ISP) market is profiled, including information on the recent ISP takeovers that continue to dominate the industry. While the aim of the government is for more Australians to have access to more affordable broadband than is currently provided the telecommunications services to retail customers through retail service providers (RSPs) will open up to some and even additional players. During this process we are likely to see more consolidation in the ISP market, such as that which took place when subscribers moved from dial-up services to broadband.

In this publication BuddeComm also presents overall statistics of the residential broadband market. We provide an analysis of the drivers behind internet adoption among Australian households, with data from a number of market surveys covering consumer usage and behavioural patterns, as well as internet and broadband usage statistics. The figures used here are the latest available, with some historic statistics for a comparison over time.

We also overview the retail fixed broadband market that is now dominated by a small number of companies, Telstra being the majority provider of services, with more than four times as many retail subscribers as the second-largest ISP, iiNet. The other top ISPs include TPG, Optus and with M2 (Primus) holding less than half the number of subscribers. ISP numbers are estimated to rise as the NBN rollout encourages even more service providers to enter the marketplace by providing the future services that the fibre-enabled NBN market will allow.

The rollout of the NBN is set to alter the hybrid fibre coax (HFC) landscape with the dismantling of most of the overbuilt areas and customers being shifted onto the fibre network. Most of the HFC networks currently operating are by the two major operators in Australia, Telstra and Optus. Parts of these networks were recently upgraded to DOCSIS 3 as a way of remaining competitive in the current broadband market. That strategy has seen numbers remain fairly steady over the past year.

But, while the NBN rollout may take more than five years to cover all the HFC network areas, BuddeComm believes that the probability of more subscribers taking up IPTV services, and of additional suppliers entering the IPTV market, is likely to result in HFC network use of cable TV diminishing as broadband usage increases.

Market highlights:

• The internet-connected home is nearly ubiquitous across Australia, with over 80% penetration rate predicted by end-2012;
• Total value of the broadband markets is now more than $4 billion;
• Cloud-based usage by business increasing as backups and shared data come from faster connections;
• Online businesses are sustaining higher financial returns into 2012;
• Data usage by users increases by 80% year-on-year in 2011 and is set to double as more broadband-enabled devices are used;
• Connected or smartTVs will see a very rapid uptake over the 2013-2015 period;
• An overview of new trends and existing technologies is provided;
• Penetration rate of HFC broadband subscribers is under 10% of the total broadband market in Australia;
• Key usage trends for the fixed broadband market

Australian Broadband Market Report

Published: June 2012                        No. of Pages: 109                               Price:  US $ 995                                             

Table of Contents

1. Statistical Overview
1.1 Overall size of the market
1.1.1 Total broadband subscribers
1.1.2 Subscribers by major providers/technology
1.1.3 Market shares
1.2 Access revenues
1.2.1 Statistical overview
1.2.2 Average Revenue per User (ARPU)
1.3 The internet market into 2012
1.3.1 Australian Bureau of Statistics (ABS) Survey – 2011
1.3.2 Statistical information by technology
1.3.3 Broadband speeds
1.4 ISP market overview
1.4.1 The market in 2012
1.4.2 Data limiting
1.4.3 ISP market statistics
1.4.4 ISPs contracting but some sectors may expand
1.4.5 Voice over Internet Protocol (VoIP) added to naked DSL
1.4.6 Industry forecast – 2015
1.5 Market segment forecasts – 2005; 2010; 2015
1.6 Benchmarking with other countries
1.6.1 Fixed broadband
1.6.2 Wireless broadband

2. The National Broadband Network (brief overview)

3. Business Market Statistics
3.1 Market trends
3.1.1 Business market overview
3.1.2 ISPs targeting business
3.1.3 Broadbanded companies moving forward
3.1.4 The NBN and the business market
3.1.5 Business need faster speeds to communicate
3.2 Business market surveys
3.2.1 Survey reveals moving online benefits businesses – 2012
3.2.2 Telstra Productivity Indicator 2012
3.2.3 Assessment SME market in Australia – 2011
3.2.4 Sensis – 2011 e-business report
3.2.5 High speed broadband survey Northern Rivers
3.3 Business customer expenditure on telecoms
3.3.1 Overview
3.3.2 Spending information
3.3.3 Optus IP Index – 2009

4. Residential Market Statistics
4.1 Residential market total telecoms
4.1.1 Total customer expenditure telecoms
4.1.2 Residential telecommunications market
4.2 Internet household statistics
4.2.1 Australian Bureau of Statistics (ABS) surveys and internet connectivity
4.2.2 Australian Communications and Media Authority (ACMA) surveys
4.3 Trends in the residential market
4.3.1 Problems with broadband technology
4.3.2 Data increases in volume
4.3.3 Mobile broadband – an alternative to fixed line services?
4.3.4 Dial-up internet just hanging on
4.4 Household use of technology
4.4.1 Computer technologies
4.4.2 Broadband technologies
4.5 Other residential market surveys
4.5.1 Internet hours – usage increasing in 2012
4.5.2 New generations survey
4.5.3 Customer service issues and the Telecommunications Industry Ombudsman (TIO)

5. DSL Market, Overview, Statistics and Providers
5.1 Background
5.2 Regulatory environment – analysis
5.2.1 Background
5.2.2 The impact of fibre optic networks on digital subscriber line (DSL) regulation
5.2.3 Unbundling of the local loop (ULL) and line sharing
5.2.4 Internet filtering funding cut
5.3 DSL infrastructure
5.3.1 Overview
5.3.2 Tool for competitors
5.3.3 DSLAM infrastructure
5.3.4 Street cabinet IP DSLAM2 upgrades
5.4 Brief overview of broadband providers market
5.4.1 Market consolidation
5.4.2 The shrinking of ISPs
5.4.3 ISP customer satisfaction
5.4.4 Market share statistics

6. HFC Cable Networks
6.1 Technology
6.1.1 Hybrid fibre coax (HFC)
6.1.2 The DOCSIS standard
6.1.3 The next development for DOCSIS
6.2 Market statistics and estimates
6.3 Austar United Communications Ltd (AUSTAR)
6.3.1 Overview
6.4 BES/e-wire
6.4.1 Overview
6.5 Transact
6.5.1 Overview
6.6 Telstra
6.6.1 Background information
6.6.2 DOCSIS 3.0 upgraded
6.7 Optus
6.7.1 Overview
6.7.2 Network DOCSIS 3.0 upgraded
6.8 Industry analysis
6.8.1 Do we need infrastructure-based competition?
6.8.2 Moving on from the HFC of the past
6.8.3 No long-term future in HFC cable broadband
6.8.4 HFC to be decommissioned as NBN rolls out
6.8.5 From HFC to fibre-to-the-home (FttH)

7. Mobile Broadband – Statistical Overview and Forecasts
7.1 Market overview and analysis
7.1.1 Growth slowly tapering off
7.1.2 Infrastructure to drive further expansion
7.1.3 Applications drive the market
7.1.4 Spectrum shortage
7.1.5 Mobile broadband revolution set to change the industry
7.1.6 Hardware drives applications
7.1.7 Mobile broadband to drive structural change
7.1.8 User prices remain high
7.1.9 Use of Unified Communications increasing
7.1.10 Smartphones driving data usage
7.2 Wireless broadband market statistics
7.2.1 Mobile broadband subscribers
7.2.2 Mobile broadband revenues
7.2.3 Mobile broadband market
7.2.4 Fixed wireless broadband market
7.3 Forecasts and other developments
7.3.1 Watch out for the next WiFi wave
7.3.2 Mobile broadband boom the killer app FttH
7.3.3 4G Wireless National Broadband Network (NBN) for regional Australia
7.3.4 Fixed/mobile call market
7.3.5 Revenue forecasts
7.4 Australia – mobile media – premium rate SMS (PSMS) portals and apps

8. Market Forecasts
8.1 Industry transformation
8.2 Fixed infrastructure market
8.3 Wholesale market
8.4 The retail market
8.5 Penetration forecasts
8.5.1 Roll out penetration
8.5.2 Broadband access penetration
8.5.3 Fibre to connect 4.2 million in 2015
8.6 The mobile market
8.7 The digital economy – trans-sector market
8.7.1 Forecasts – 2015; 2020
8.7.2 The digital media market
8.7.3 Business market survey
8.8 Business models and mergers and acquisitions (M&A)
8.8.1 Fixed market scenarios
8.8.2 Mobile market scenarios

9. Glossary of Abbreviations

List Of Tables

Table 1 – Total broadband subscribers and annual change – 2000 – 2013
Table 2 – Broadband subscribers – total market by technology – 2008 – 2012
Table 3 – Broadband market – overall market share by technology – 2003 – 2012
Table 4 – Broadband access revenues by major provider – 2005 – 2012
Table 5 – Annual change in broadband access revenues by major provider – 2006 – 2012
Table 6 – Market share of broadband access revenues by major provider – 2005 – 2012
Table 7 – Estimated fixed broadband ARPUs – 2006 – 2012
Table 8 – Internet subscribers by access technology – 2008 – 2011
Table 9 – Broadband market share by technology and annual change – 2008 – 2011
Table 10 – Data downloaded by access technology – 2010 – 2011
Table 11 – Data downloaded by access technology (historic) – 2008 – 2009
Table 12 – Business, government and household internet subscribers (historic) – 2007 – 2009
Table 13 – Subscribers’ connected speed in Australia versus selected countries – 2010 – 2011
Table 14 – Internet subscribers by download speed – 2008 – 2011
Table 15 – Business, government and household internet subscribers by download speed – 2008- 2011
Table 16 – Proportion of ISPs by size in the Australian market – 2008 – 2011
Table 17 – Number of ISPs – 2001 – 2012
Table 18 – Overview total telecoms/internet market – 2015
Table 19 – Broadband revenues – 2005; 2010; 2015
Table 20 – Broadband market share by technology – 2005; 2010; 2015
Table 21 – Fixed broadband access among internet households – selected countries – 2006 – 2011
Table 22 – Market penetration of households with broadband access as a percentage of all households – Australia and selected countries – 2009 – 2010
Table 23 – Business takeup of broadband by access type – 2010 – 2011
Table 24 – SME online trends – 2011 – 2012
Table 25 – SME computer equipment ownership trends – 1999 – 2011
Table 26 – Computer software and hardware expenditure – SMEs versus medium businesses – 2006 – 2011
Table 27 – Business trends in internet connections – 1998 – 2011
Table 28 – SMEs internet access methods, by technology – 2009 – 2011
Table 29 – Top 10 current uses of the internet by SMEs – 2009 – 2011
Table 30 – Telco product mix of customer spend – 2010
Table 31 – Business and government market spending – 2010
Table 32 – Providers’ market share – 2010
Table 33 – Security methods utilised for remote access to networks – 2008 – 2009
Table 34 – Devices used to connect to networks – 2008 – 2009
Table 35 – Employees’ work locations – home, workplace or off-site – 2008 – 2010
Table 36 – Changes in usage of non-voice applications on 3G handsets – 2010
Table 37 – Plans for convergence of data and voice networks – 2005; 2008 – 2009
Table 38 – Telco product mix of customer spend – 2010
Table 39 – Revenue mix – residential market – 2010 – 2011
Table 40 – Service providers’ market share – 2010
Table 41 – Total households versus internet households – 1999 – 2011
Table 42 – Broadband component of internet enabled households – 2005 – 2011; 2015
Table 43 – Internet access households with children – 2005 – 2009; 2010 – 2011
Table 44 – Top 5 social networking age groups – 2011
Table 45 – Internet usage by age group – 2010
Table 46 – Data usage by users – 2008 – 2011
Table 47 – Dial-up and non-dial-up internet subscribers – 2003 – 2011
Table 48 – Computerisation in the home – 2011
Table 49 – Weekly internet usage by age group – 2012
Table 50 – Total new complaints to the TIO – 2006 – 2012
Table 51 – Number of infrastructure providers by number of ADSL-enabled exchanges – 2007 – 2008; 2010 – 2011
Table 52 – Number of DSLAMs by major providers – 2009 – 2012
Table 53 – Total number of DSLAMs – 2006 – 2012
Table 54 – Number of ADSL and ADSL2+-enabled exchanges – 2012
Table 55 – Top Hat proposed and enabled ADSL2 exchanges – 2011 – 2012
Table 56 – ISP customer satisfaction ratings of selected ISPs – 2010 – 2011
Table 57 – Total business and residential broadband subscribers – 2006 – 2013
Table 58 – Broadband DSL retail subscribers by major provider – 2008 – 2012
Table 59 – Cable broadband subscribers by major operator and annual change – 2002 – 2013
Table 60 – Cable subscribers versus other broadband technologies – 2009 – 2011
Table 61 – Wireless broadband subscribers by access type and annual change – 2007 – 2012
Table 62 – 3G mobile broadband subscribers by mobile network operator – 2007 – 2012
Table 63 – Estimated mobile broadband data downloaded in Petabytes – 2007 – 2012; 2015
Table 64 – Estimated mobile broadband revenues and annual change – 2007 – 2012
Table 65 – Mobile broadband monthly ARPU – 2007 – 2012
Table 66 – Estimated mobile data revenue revenues by mobile network operator – 2008 – 2012
Table 67 – Fixed wireless broadband subscribers by major operator – 2008 – 2012
Table 68 – WiFi hotspots at its peak in the late 2000s
Table 69 – Forecast mobile broadband and voice revenues – 2008; 2013; 2018
Table 70 – NBN take up rates first release sites
Table 71 – Broadband uptake* scenario forecasts – 2015; 2020 (household penetration)
Table 72 – Impacts of the NBN on industry output at 2020 (% change)

List Of Charts

Chart 1 – Overview of total broadband subscribers and annual change – 2002 – 2013
Chart 2 – Overview of broadband access revenues by major provider – 2005 – 2012
Chart 3 – Overview of annual change in broadband access revenues by major provider – 2006 – 2012
Chart 4 – Overview of market share of broadband access revenues by major provider – 2005 – 2012
Chart 5 – Overview of fixed broadband ARPUs – 2006 – 2012
Chart 6 – Overview of number of ISPs – 1995 – 2012
Chart 7 – Overview of number of ISPs by major technology – 2009 – 2011
Chart 8 – Overview of broadband revenues – 2005; 2010; 2015
Chart 9 – Overview of broadband market share by technology – 2005; 2010; 2015
Chart 10 – Overview of ICT takeup issues by businesses – 2009 – 2012
Chart 11 – Overview of SME computer equipment ownership trends by type – 2001 – 2011
Chart 12 – Overview of SME versus medium-sized business computer expenditure – 2006 – 2011
Chart 13 – Overview of business trends in internet connections – 2001 – 2011
Chart 14 – Overview of estimated market share by provider – 2010
Chart 15 – Overview of security methods utilised for remote access to networks – 2008 – 2009
Chart 16 – Overview of employees’ internet work locations – 2008 – 2010
Chart 17 – Overview of changes in usage of non-voice applications on 3G handsets – 2010
Chart 18 – Telco product mix of customer spend – 2010
Chart 19 – Overview of households with internet access – 1999 – 2011
Chart 20 – Consumer internet usage hours by category – 2006; 2010
Chart 21 – Overview of the trend in increased data downloaded – 2007 – 2011
Chart 22– Overview of the decline in dial-up subscriptions – 2003 – 2011
Chart 23 – Overview of total new complaints to the TIO – 2006 – 2012
Chart 24 – Overview of consumer and SME complaints to the TIO by industry sector – 2011
Chart 25 – Overview of number of DSLAMs by top 5 providers – 2008 – 2012
Chart 26 – Overview of the rollout of TopHat DSLAM2 upgrades – 2012
Chart 27 – Overview of the top six ISPs with excellent customer service satisfaction ratings – 2009 – 2011
Chart 28 – Overview of total business and residential broadband subscribers – 2006 – 2013
Chart 29 – Overview of cable broadband subscribers by operator and annual change – 2002 – 2013
Chart 30 – Overview of cable subscribers versus other broadband technologies – 2009 – 2011
Chart 31 – Overview of 3G mobile broadband subscribers by mobile network operator – 2007 – 2012
Chart 32 – Overview of estimated mobile broadband data downloaded in petabytes – 2007 – 2012; 2015
Chart 33 – Overview of estimated mobile data revenue by mobile network operator – 2008 – 2012
Chart 34 – Market share size of NBN trans-sector market – 2020
Chart 35 – NBN services revenue share estimates by market share – 2015
Chart 36 – NBN services revenue share estimates by market share – 2020

List Of Exhibit

Exhibit 1 – Advice for digital economy builders
Exhibit 2 – Business web activity – a snapshot from the ABS
Exhibit 3 – HFC network status