Research Findings: End of the Boom for Mobiles?
Sydney, AUSTRALIA — Wednesday, 15 March 2006 — As the number of mobiles in the Australian market approaches parity with Australia’s population, growth in the market is set to slow, according to new research published this week by Market Clarity.
Key findings of the report include:
- Growth in mobiles market predicted to decline
- Shift towards low-value pre-paid offerings expected to continue
- Take-up of 3G services to date has been slow
According to Market Clarity’s Australian Mobile Voice and Data Services Market report, the mobile market, which has grown by 120.6% since 2000, will only show a further 17.1% growth from 2005 to 2010.
This is bad news for Australia’s 3G sector, which has to compete with established 2G technologies in an already-saturated consumer market. Moreover, Australia’s mobiles market has shown a growing shift to low-value pre-paid offerings which now make up nearly half the total mobile services in operation and are set to grow faster than the market as a whole, rising more than 19.2% between 2005 and 2010.
“The mobiles market has been the growth driver in Australian telecommunications for much of this decade,” said Shara Evans, CEO, Market Clarity. “However, with very low potential for future growth in services, carriers will have to look to added value to grow their mobile revenues.”
Evans said this is already proving a difficult task, with consumers slow to adopt high-return services such as mobile data and 3G offerings. “3G services show by far the highest average revenue per user in the mobile market,” Evans said. “But so far, with about 750,000 3G services in operation at December 2005, the 3G space has yet to experience serious competition.”
Evans expects that as Telstra, Optus and Vodafone ramp up their 3G offerings over the next 12 to 18 months, with increasing 3G competition placing the high average revenue per user of 3G services under pressure.
“As carriers try to convince users to convert from 2G to 3G services, we expect bundle competition in the 3G market to follow similar patterns to those already seen in the 2G market,” she said. “That will mean more calls included in the bundles, more attractive on-network offers, and more inducements to use advanced services such as multimedia messaging and mobile data.”
Today, Evans said, 3G services enjoy average revenue per user of over $80 per month, but in a more competitive market this is likely to decline towards the industry-wide average of just over $57 per month.
“In the years 2000-2005, the Australian mobile services industry underwent a huge boom, with services, revenues and call minutes all growing strongly,” Evans commented. “The challenge for the coming years is to find new services to drive revenue growth in the face of a clear consumer trend towards commodity mobiles.”
“In The Australian Mobile Voice and Data Services Market, Market Clarity quantified the trend towards fixed-to-mobile replacement in Australia. This, along with attractive on-network call bundling, is driving a huge growth in mobile usage,” Evans said. “These changing consumer usage patterns, if exploited properly by carriers, provide the best opportunity for future growth in the market.”
About The Australian Mobile Voice and Data Services Market
The Australian Mobile Voice and Data Services Market was released today and is now available from Market Clarity. It is part of Market Clarity’s Market Demographics and Forecast Series publications and provides a comprehensive analysis of the mobile telecommunications sector, covering mobile subscriber numbers, revenue, and profit from 2000-2006 and as well as Market Clarity’s market forecasts from 2007-2011.
This publication comes in the form of a presentation and/or spreadsheet-style report. These reports provide up-to-date service take-up and forecasting information on Australia’s mobile market.
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.