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Australian telco revenues to decline by 2016: Analyst

Australian telco revenues to decline by 2016: Analyst

Annual growth of only 1 per cent predicted over the next five years

The Australian telecommunications industry is set to face declining revenue growth by 2016 due to falling mobile services profits, according to data from analyst firm, Frost & Sullivan.

Frost & Sullivan ICT research industry manager, Marc Einstein, said that Australian companies would soon have to face the fate of revenues decreasing in mobile services. NTT Docomo, for example, had revenues decreased by 15 per cent in the past five years because of an over-saturated mobile market.

“The reason this is relevant in Australia is that we’ve seen a very healthy uptake of smartphones and we have the National Broadband Network [NBN] coming so Australia will be in a similar situation to Japan,” he said.

The analyst firm is predicting a 1 per cent annual growth rate for mobile services over the next five years in Australia. According to Frost & Sullivan research, by the end of 2011 there were more than 30 million mobile subscribers in the Australian market, implying a penetration rate of almost 132.5 per cent and a user penetration of 99.9 per cent.

“The good old days of double digit growth for mobile services is over,” Einstein said. “This is a market that will be in decline and it’s very scary for the operators.”

He added that in the near term, competition between mobile operators is set to intensify further, resulting in lower mobile call charges for customers leading to average revenue per user (ARPU) decline.

With 3G uptake rising, data per cent of APRU has also been rising. Data contributed 40.8 per cent of ARPU in 2010, which means the market is already on par with other advanced markets such as Japan.

Frost & Sullivan is not the only analyst firm predicting dire times ahead for the telecommunications industry.

BuddeComm director, Paul Budde, recently told Computerworld Australia that as ARPUs are declining in the mobile market, power is shifting from the telcos to companies such as Apple and Google.

Follow Hamish Barwick on Twitter: @HamishBarwick

Follow Computerworld Australia on Twitter: @ComputerworldAU

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