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Australia - Market Intelligence Report

Market Intelligence Reports provide an invaluable mix of vital market data and background information, including telecoms regulation.
Published: March 2007
Pages: 98

Australia operated a duopoly in the provision of telecommunications services until July 1997, although a host of value-added service providers were able to offer services over the infrastructure of the duopoly operators Telstra and Optus Communications (now known as SingTel Optus). The market was opened to full competition from July 1997 and, by JUne 2006, there were 209 licensed carriers, of which 157 were active, and 63 nominated carrier declarations. During 2006, 11 nominated carrier declarations were issued, while seven were revoked. Similarly, during 2005-06, 35 new carrier licences were issued and ten were revoked.

Telstra has vigorously defended its local market from competition, through tactics including overly-high interconnection costs and delays in implementing automated systems to assist customers in connecting to the networks of other operators. Although carriers are obliged to provide indiscriminate access to their networks and open local telecommunications services to fair competition, Telstra has been accused of being indifferent to its legal requirement to provide interconnection facilities with new carriers and of having misled or deceived potential customers of new carriers.

SingTel Optus (wholly-owned by Singapore Telecom) remains Telstra's most potent threat, but other significant players include the TCNZ-backed AAP Telecommunications and Primus Telecom Australia. TCNZ spent the latter part of 2005 and early-2006 considering AAPT's future, which culminated in the reduction of the carrying value of the business and a structural reorganisation to enable greater focus on particular market segments. In January 2007, AAPT was reported to have been conducting merger talks with rival alternative fixed-line operator, PowerTel. According to reports, AAPT would buy a stake in PowerTel in order to avoid a mooted takeover bid from SingTel Optus.

In the mobile market, Telstra, Optus, and Vodafone continue to fight out the larger market shares, although Hutchison has now been able to start to take significant market share following the launch of its 3G service in Sydney and Melbourne in April 2003.

Telstra's service quality, which is widely regarded as particularly poor in rural and remote areas, has delayed the sale of the government's remaining 50.1% stake in the operator. The privatisation of Telstra has taken place in three tranches to date, all of which have been subject to delays, particularly the third, which was only completed in November 2006. At that time, the government held just 17.8% of Telstra's shares.

 


 

This Market Intelligence Report was produced as part of
Communications Markets Analysis (CMA).

For more information on CMA, click here.