Telecommunications Services in Australia Subdivision Market Research Report Now Updated by IBISWorld

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Demand for and use of telecommunications services has increased over the past five years, but intense intra-industry and intra-subdivision competition have created a difficult trading environment. For this reason, industry research firm IBISWorld has updated its report on the Telecommunications Services subdivision in Australia.

IBISWorld Market Research

IBISWorld Market Research

Growth in demand for some telecommunications segments has been achieved at the expense of other, more traditionally profitable services

An explosion in connectivity has ingrained Telecommunications Services as a vital part of the day-to-day functioning of Australian businesses, and changed the way Australians interact. Demand for and use of telecommunications services has increased over the past five years, but intense intra-industry and intra-subdivision competition have created a difficult trading environment. According to IBISWorld industry analyst Nick Flores, “Growth in demand for some telecommunications segments has been achieved at the expense of other, more traditionally profitable services, such as wired telecommunications.” In particular, the Wireless Telecommunications Carriers industry has been booming due to wired-to-wireless substitution, which has been enhanced by the prevalence of smartphones and increasing mobile connectivity. The Wired Telecommunications Network Operation industry has suffered a collapse in access line usage over the past five years. Total revenue from the Telecommunications Services subdivision has been affected by the decline in wired revenue and is forecast to decline by an annualised 1.5% in the five years through 2014-15.

In 2014-15, subdivision revenue is forecast to decline by 1.7% to $41.5 billion. “In line with the growth of wireless services, telecommunications providers have focused on implementing price cuts to improve their market share and develop their customer base,” says Flores. Subdivision profit increased over the past five years, largely due to economies of scale and lower unit costs, combined with the rise in subscriptions. Revenue growth, where it does occur, will be the result of advances in technology, expanding network coverage and network infrastructure upgrades. In particular, the National Broadband Network is expected to be a game changer, as it upends the current competitive environment of the Wired Telecommunications Network Operation industry. Furthermore, investment in 4G networks is expected to fuel competition in the Wireless Telecommunications Carriers industry.

The Telecommunications Services subdivision has a high concentration level. The subdivision previously had four major players, but the third- and fourth-largest players, Vodafone and Hutchison, merged operations in 2009. There is a large gulf between the major players and the next level of second-tier telcos. The high subdivision concentration level can largely be attributed to Telstra, which has held onto a large share of the market over the past five years. The top challenger, Optus, has a market share that is less than half of Telstra's. Telstra's subdivision dominance ultimately lies in its incumbency and its vast economies of scope. While the subdivision as a whole is regarded as highly concentrated, levels do vary between various industries. For example, the Telecommunications Resellers industry has a low concentration level, especially as Optus is gradually exiting the industry. Alternatively, the Wireless Telecommunications Carriers industry has an extremely high concentration level.

For more information, visit IBISWorld’s Telecommunications Services subdivision in Australia report page.

Telecommunications companies are mainly engaged in operating, maintaining or providing access to facilities for the transmission of voice, data, text, sound and video over wire, cable, wireless and satellite networks. Not all subdivision participants own and operate telecommunications infrastructure. Telecommunications resellers purchase network capacity and then retail services to businesses and consumers. Internet service providers are not included in this subdivision.

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IBISWorld subdivision Report Key Topics

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.

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Gavin Smith
IBISWorld
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