The rollout of the National Broadband Network will drive industry performance over the next five years.
Melbourne, Australia (PRWEB) June 12, 2014
Companies in the Internet Service Providers industry offer retail internet services and include firms that own or lease the telecommunications infrastructure. Revenue is derived from the provision of internet services to consumers, businesses and governments. Internet service providers (ISPs) have historically been one of the fastest growing industries in the technology sector. However, market saturation for fixed broadband has caused revenue growth to slow over the past five years. Growth is beginning to pick up pace again as technologies get upgraded. Revenue is forecast to grow by an annualised 6.2% in the five years through 2013-14, to reach $4.5 billion.
The industry is forecast to continue its recovery in 2013-14, with revenue growth of 8.4%. This reflects the growing influence that the internet is having on consumers and businesses. More people and businesses are using the internet daily, as entrenched services such as general browsing, email and social networking have made the internet a necessity. The industry has undergone consolidation over the past five years. The importance of scale and exposure means that operators have become much larger. Smaller players have been forced to either exit the industry or make acquisitions to keep pace with the top players as they slash prices to maintain market share.
The industry's performance will be underpinned by the development of the National Broadband Network (NBN) over the next five years. IBISWorld industry analyst Nick Flores states, “the NBN rollout is expected to drive growth opportunities for industry players, as it enhances the reliance of businesses and consumers on the internet.” As access providers, ISPs are expected to grow strongly as subscribers choose to upgrade their connections. According to Flores, “Steady subscriber growth and increased internet use will further support the industry.”
The Internet Service Providers industry is characterised as having a high level of market share concentration. The high fixed-cost nature of the industry has encouraged a spate of merger and acquisition activity, as companies strive to attain economies of scale that will enable them to compete with Telstra. TPG Telecom and iiNet have sustained the largest growth in industry market share as a result of merger and acquisitions. Further consolidation among the large industry players is expected in the next five years, which will push the industry's concentration higher. However, the Australian Government's NBN plan is designed to increase competition within the entire Australian communications sector. A new company, NBN Co., has been created to build and initially manage the next-generation network. The move will reduce Telstra's dominance of the Australian communications sector, but the larger participants with access to scale advantages will still dominate the industry. The industry’s largest players include Telstra, iiNet, SingTel Optus and TPG Telecom. For more information, visit IBISWorld’s Internet Service Providers report in Australia industry page.
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IBISWorld industry Report Key Topics
Companies in this industry provide internet access via fixed lines to businesses, households and government. Internet services are provided via dial-up, integrated services digital network (ISDN) and fixed broadband connections. This industry also provides internet reliant telecommunication services such as voice over internet protocol (VoIP).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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