Telco market in Australia won’t recover until 2027
Announcement posted by Venture Insights 25 May 2022
Melbourne, May 30th, 2022 – Venture Insights bi-annual telco market forecast predicts slow growth for the overall retail telecommunications market in Australia (F21-FY26 CAGR of 0.3%) over the next few years. Growth in mobile, broadband, and corporate Data & IP will be offset by decline in fixed voice. After falling in FY20-FY21 to a low of due to the pandemic, the total retail market will reach $32 billion in FY26.
“COVID-19 had a negative impact to the total revenues in FY20 and FY21, especially in the mobile market. Fixed voice continues its structural decline as subscribers shun the landline and migrate to mobile bundles and broadband + VOIP bundles, but the speed of decline is expected to reduce as the market approaches the bottom”, as observed by Claudio Castelli, Head of Research at Venture Insights.
“We expect growth in mobile to be hampered by a slow economy and reduced immigration in first half of FY22 but recover over the second half to FY26 period driven by economic growth and higher ARPU resulted from 5G services. Mobile revenues fell at 3.4% CAGR in FY19-21 to reach $16.5b but will grow at 1.7% CAGR the next 5 years. The end of the NBN migration, new 5G services and use cases, and growth in fixed wireless will help the telcos to recover. Inflationary pressure will also drive a modest increase in prices”.
The fixed broadband market is estimated at $6.0bn (in FY22) and is expected to grow at 2.3% 5Y CAGR (FY21-26), driven by population growth, more data consumption, and the migration of users to higher speed plans. Fixed broadband revenue will increase its revenue share in the retail telco market from 17% in FY20 to 21% in FY26. COVID-19 has boosted broadband ARPUs in 2020 as consumers migrate to higher plans, but growth will soften after FY23 as most users will be already on unlimited plans, the number of customers in entry-level products declines, and the pool of subscribers interested in higher speeds will reduce.
The total corporate Data & IP (retail) market in Australia (business and enterprise) fell at 2.3% CAGR over the FY19-21 period because of pandemic restrictions to reach $5.4b, but it will grow at a CAGR of 0.7% over FY21-26.
About Venture Insights
Venture Insights was founded to provide our clients with an alternative perspective on the strategic direction and outlook of the digital, media and telco sectors. We believe we have a competitive advantage over existing research providers, many of which have narrow time horizons, through our detailed market models, broad sector coverage and local ANZ focus.
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