Melbourne, Australia (PRWEB) October 07, 2012
Companies in the Internet Service Providers industry provide retail internet service, whether they own telecommunications infrastructure or not. Revenue is simply derived from the provision of an internet service to all consumers, business and government. In 2012-13, this industry will generate $7.0 billion in revenue. Internet service providers (ISPs) represent one of the fastest-growing industries in the telecommunications sector, recording annualised growth over the past five years of 1.9% through to 2012-13, with 6.1% growth in 2012-13. According to IBISWorld Industry analyst Craig Shulman, “this reflects the growing importance and influence the internet is having on the day-to-day lives of consumers and businesses”. Rapidly advancing broadband penetration is enabling faster service delivery to more businesses and consumers. This is boosting usage by facilitating access to various data-intensive applications such as online gaming, online commerce, video sharing and content downloads, and subsequently boosting growth.
The industry has undergone significant consolidation in the past five years, which resulted in the number of ISPs falling. The importance of scale and exposure has meant that operators have become much larger, which resulted in employment increasing. Part of the employment increase will represent the beginning of the massive National Broadband Network (NBN) project. This $38-billion project will ultimately usher Australian society into a new era of living and business. “As access providers, ISPs will benefit from another five years of phenomenally strong revenue growth”, says Shulman. Over the five years through 2017-18, industry revenue is anticipated to grow.
The Australian Internet Service Providers industry has a medium level of market share concentration. The industry is extremely capital intensive, and as such, there has historically been little threat of any company creating a network to rival Telstra's copper PSTN network. Telstra has been able to leverage its dominance of the wired telecommunications market by bundling services. The high-fixed cost nature of the industry has encouraged a spate of merger and acquisition (M&A) activity within the smaller ISPs, as they strive to attain economies of scale that will enable them to compete with Telstra. TPG Telecom and iiNet have experienced the largest growth in industry market share as a result of M&A activity. Further consolidation is expected in the next five years, which will push the industry towards a high level of concentration. However, the Australian Government's 2009 NBN announcement 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 who enjoy scale advantages in their operations will still dominate the industry. The top four players in the industry are Telstra, SingTel Optus, iiNet, 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 and fixed broadband connections. Internet service providers may also offer support services including web page hosting, web development, domain services, intranet development and administration, and e-commerce based services.
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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