5 Predictions for Broadband in Australia – Next 5 years

  • Playing field to be smaller, but clearly delineated
  • NBN not yet all the way there in 2017
  • Vodafone, others, gone

2012 might prove to be the year that a lot of long simmering tensions in the world of Broadband finally get some air to breathe. iiNet has bought out Internode, a longtime rival/cohort in the fight to provide a competitor to Telstra that isn’t all about cheaper prices. TPG has opened up on its true feelings about Telstra. The NBN has (kinda) started offering a proper rollout of services in existing neighbourhoods, not just “Greenfield” estates. And all the while, Telstra is purchasing backhaul in new undersea cables, in a bid to become wholesaler-to-the-wholesaler, all while effectively holding the ACCC at an arm’s length on the question of its own structural separation. Where can we expect to be in five years time?

05. The NBN will be a patchwork. Many rural and regional areas with projected growth (big towns like Ballarat, Dubbo and Esperance) will be set up well. Several large urban areas will be on the network, in a bid to get numbers up, even though these areas are well supplied with copper. The NBN’s LTE wireless network will be surprisingly undersubscribed, with Telstra and Optus reselling their respective wireless networks to other companies, at competitive rates. Telstra and Optus’ existing fibre networks will fold into the NBN.

04. Telstra Retail will be hurt. After fully separating from its wholesale arm in late 2012, Telstra retail will spend a lot of time and energy protecting favourable agreements with its old wholesale arm, which is now trading under a different name. The ACCC will eventually put a stop to the maneuvering, and Telstra will have lost many customers in the meantime. They will be the clear leaders in mobile broadband, having snatched up most of the 700 MHz spectrum in 2014, but retail Fibre-To-The-Home plans suffer severely.

03. Vodafone will be gone from the Australian landscape. The struggling mobile network will be bought out by TPG, who will build on it to become the overall largest ISP in Australia, continuing to provide Unlimited gigabyte plans across its entire network, including mobile.

02. Mergers. iiNet will continue their march to buy-rather-than-be-bought, gobbling up Adam Internet and Vivid Wireless. TPG will respond by buying up Eftel, Spintel and other budget ISPs. Telstra will pick up Dodo, but fail to buy iPrimus. This will leave the market quite a bit slimmer, with iPrimus being the surprising sole holdout without an agenda for growth.

01. Most families will be spending $100/month on their internet connection, and individuals will pay about $40/month for their mobiles. Home connections will have average speeds of 30Mbps, Unlimited data plans, and no landline. Mobiles and mobile broadband will enjoy 100GB+ download plans, and free calls. Most Pay TV will come in via a broadband connection, and most phone calls will be made from mobiles. Most contracts will be ‘agreements’, without punitive break-of-contract fees, but companies will no longer offer free equipment like mobiles and modems, and will require expensive setup fees. This will limit churn as effectively as contracts did in the past.

Overall – You’ll be paying about the same as now, but getting much more for it.