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Optus needs a stronger NBN strategy: Analysts

Telco needs to establish a National Broadband Network (NBN) strategy in order to hold its number two position, according to analysts.
BuddeComm director, Paul Budde.

BuddeComm director, Paul Budde.

While Optus is fresh from celebrating 20 years in business, the next two decades will see changes in the telecommunications market that it will need to tackle in order to stay competitive, according to telco analysts.

BuddeComm director, Paul Budde, said that Optus has made an enormous contribution to legal and regulatory changes in the market, as well as providing competition in the corporate and government sectors to the incumbent Telstra. “The whole competitive industry has enormously profited from Optus’ passionate work and the resources it has put into the ongoing reforms,” he said.

However, Budde warned that the fixed-line market is not its strongest side and Optus still does not have a good National Broadband Network (NBN) strategy. “Others such as Telstra, iiNet and TPG are moving much faster here than Optus,” he said.

“Average revenue per users [ARPUs] are declining in the mobile market and the market power is shifting from the telcos to companies such as Apple and Google.”

Budde added that Optus has not yet come up with a convincing strategy on how to address this – and as a result it is forced more and more into the position of an infrastructure provider.

To stay profitable, Optus will need to tap new verticals. However, if the telco is to move forward it will need to have a clearer strategy. According to Budde, Telstra has “a much clearer strategy going forwards” and is “at least embracing the new environment in a more strategic way.”

Ovum analyst, David Kennedy, agreed with Budde that the telco plays an important role in providing competition and educating customers about choice in the telecommunications market. “The competitors who entered the market afterward benefited from Optus’ trail-blazing efforts,” he said.

However, its major challenge now is to manage the transition to the NBN environment, and retain its number two position in the process. Kennedy said that Optus will need to move to the NBN environment to stay competitive in the market, while being positive about its mobile and infrastructure strength.

“Like all of the Australian operators, Optus will need to move up the stack into managed and value-added services as the NBN absorbs the basic access market,” he said.

“Its strength in mobile, along with its infrastructure investment program, will differentiate Optus from Telstra’s other competitors.”

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More about: Apple, BuddeComm, etwork, Google, iiNet, Optus, Ovum, Telstra, TPG
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