New study forecasts increasing revenue squeeze for Australian telco industry
Sydney, AUSTRALIA — Thursday, 23 February 2006 — A major new study released today by Market Clarity found three main trends in Australia’s fixed voice services market:
- Fixed-to-mobile minutes growing at expense of local and long distance
- International minutes grew during the 2000-2005 period, while revenues declined
- Increasing broadband take-up driving access lines correction
Market Clarity’s Australian Fixed Voice Services Market report comes in the form of a presentation and/or spreadsheet-style report providing up-to-date service take-up and forecasting information on Australia’s fixed voice market. This publication covers PSTN and ISDN technologies, giving insight into the development of the market over the last six years and annual growth forecasts to 2011. A key finding was that fixed-to-mobile calls, one of the most expensive call categories in the telecommunications market, are skyrocketing while local call volumes and revenues are in decline.
The report also found that the decline in basic access services is set to continue as broadband adoption corrects an inflated market for second line services. As a result, while Australia appears set to lose over 900,000 basic access lines between the end of 2005 and 2010, the decline will fall disproportionally on the residential second line market, which is set to shrink by around 71% over this period while primary line residential services will only shrink by around 9%.
“While the decline in second line services will continue through 2010, the number of residential services is slowly converging with population growth,” said Shara Evans, Market Clarity CEO. “Even once that happens, we believe the residential basic access line market will continue to decline as consumers abandon fixed line services in favour of mobile and/or VoIP services.”
Of even greater concern to telcos, Evans said, is the continuing decline in revenues from most segments of the fixed line call market. “Since 2000, volumes of local calls have fallen by 3%, and long distance calls have fallen by 4.3%,” Evans said. “Fixed-to-mobile calls are making inroads into both of these segments, however. By the end of the decade, we believe local call volumes will be down more than 22% from their 2000 levels, while long distance calls will fall by close to 26%.”
This trend is already driving up fixed-to-mobile call minutes, but strong competition in the fixed voice market means fixed-to-mobile revenues are growing more slowly than local and long distance revenues are falling.
“Between 2005 and 2010, we believe fixed-to-mobile call minutes will rise by more than 24%, or 1.59 billion minutes annually,” Evans said. “However, competitive pressure will limit revenue growth in this segment to less than $80 million in the same period.”
The impact of competition can also be seen in the international call market. In aggregate, between 2000 and 2005 call volumes rose by 7.6% while total revenue fell by 35%. International call volumes reached a peak in 2002, but have trended downwards ever since and the report predicts that increased competitive pressure from mobile and VoIP services will lead to a 17% decline in international minutes between 2005-2010, putting international revenue under further pressure.
The Australian Fixed Voice Services Market report is part of Market Clarity’s comprehensive series of telecommunications service demographics, a unique venture which offers the most detailed public analysis of telecommunications services available in Australia.
“Most analysts make forecasts about Australia based on international methodologies which aren’t appropriate to this market,” Evans said. “Our Demographics and Forecasts series is locally researched, and presents all of the information customers need.”
About Market Clarity
Market Clarity is an award-winning telecommunications analyst firm founded in January 2006 by leading Australian telecommunications researcher and strategic consultant, Shara Evans. The firm covers all aspects of telecommunications, including traditional and converged services and technologies. Market Clarity’s extensive databases of technical and market information cover a wide range of facts and figures on the technologies and services that are shaping the Australian telecommunications market. Market Clarity’s GIS tools and research databases enable the correlation and presentation of highly complex information in an intuitive geographic (map) format.
Market Clarity’s insights are derived from a deep understanding of technology, coupled with comprehensive research, which examines each segment of a service’s value chain as well as underlying population demographics. By leveraging its engineering knowledge with an ongoing primary research program, Market Clarity provides insight, intelligence and advice on all aspects of the Australian telecommunications market including traditional, converged and future technologies. Market Clarity’s unparalleled market knowledge and research databases are brought to all consulting engagements.
Market Clarity’s contribution to telecommunications in Australia was recognised by the telecommunications industry’s peak body, the Communications Alliance, which awarded the company its 2007 ACOMMS award for Services to the Industry – Professional Services.
Market Clarity is headquartered in Sydney, Australia.