Australian OOH market outlook \ NBN announces price discounts \ Telstra focus on InfraCo, 5G and Enterprise \ Optus revamps mobile plans \ Foxtel to skip Rugby Union



 



In this week’s edition, we look at the five year market forecasts for the Australian Out-of-Home market, NBN pricing changes, key takeaways from Telstra’s Investor Day, Optus’ revamped mobile plans and media reports around Foxtel’s plans to reportedly skip the Rugby Union.

CHART OF THE WEEK

Australian advertising revenue by segment (A$b)



Source: VENTURE INSIGHTS

Australian OOH market outlook

DOOH as a percentage of total OOH revenues (A$M, 2015-23) – FY



Source: VENTURE INSIGHTS, MAGNA, RAPPORT, OUTDOOR MEDIA ASSOCIATION

The Australian OOH advertising market experienced its ninth year of consecutive revenue growth in FY19, posting a 7.3% increase in revenue YoY, taking the industry’s revenues an all-time high of A$946mn, up from A$882mn in FY18. Digital OOH revenues accounted for more than half of total revenues in FY19. Venture Insights’ forecasts OOH revenue will continue to grow at a CAGR of 5.4% to A$1144bn by FY23. Within this Digital OOH is forecast to account for 76.5% of all OOH adex by FY23. Digitisation in the nearly billion-dollar Australian OOH market is creating efficiency and opening up new revenue streams and opportunity for more creative ad campaigns. Furthermore,  improving programmatic advertising and new and innovative audience targeting solutions are driving growth in DOOH ad spends. For a more detailed look at the five year forecasts for the Australian OOH market, click through to read our report.

Click to read report

NBN announces price discounts



NBN has announced a range of price changes to its bundle discounts including its Entry Level Bundle (ELB) and its high speed 100Mbps bundle. Other planned changes include CVC national pooling which should help reduce overage charges for RSPs, and over dimensioning of AVC bandwidth to better allow end users to achieve their peak speeds. We think the focus on trying to move people up the speed curve towards the 100Mbps speed tier is the right approach for NBN – however it will be interesting to see how the RSPs promote this product and NBNs planned Hot 100 campaign. In addition, we think the ELB and high speed bundles are positive steps in addressing the future risks of fixed wireless bypass. We expect that the changes to the ELB will be a positive for the likes of TPG (which targets the value segment) and for Telstra’s voice only customers. For more on NBN’s pricing changes, click through to read the press release.

Click to read press release

Telstra focus on InfraCo, 5G and Enterprise



Telstra has announced that it will transfer its mobile towers and fibre backhaul into its structurally separate infrastructure business, InfraCo. Interestingly Brendon Riley also indicated the potential for InfraCo to increase tower sharing across its 8,000 sites stating that its tenancy was currently sitting at around 20% with room to grow. Telstra also announced that it now has 25 cities with 5G live in Australia and is preparing for the mmWave spectrum auction in 2020 with plans to start trials next year. Telstra also flagged the introduction of small cells in 2021 (following the mmWave auction) to cater for growth and potential new services such as fixed wireless broadband for enterprise networks. In Enterprise, Michael Ebeid highlighted the changes that SD-WAN and NBN business broadband are having on the Enterprise market and noted that although IP-WAN will see price declines there will be an increase in fibre SIOs. We will be releasing a note covering our take on the investor day shortly. In the meanwhile, click through to read the investor day presentation.

Click to read presentation

Optus revamps mobile plans



Optus has simplified their mobile plan lineup, scrapped lock-in contracts and introduced a premium offering called Optus One. Similar to Telstra, Optus has decided to revamp its mobile plans with a focus on connectivity and data inclusions with add-ons such as data roaming, international calling etc. Based on Optus’ new pricing, Telstra’s comparable offering is now priced at about 20% premium to Optus. Overall, telcos are aiming to push mobile ARPUs higher by promoting the $50-$60 price point as their hero plans. Optus also announced that customers who have 5G handsets will receive double the data allowance compared to standard plans. Click through to read Optus’ announcement.

Click to read announcement

Foxtel to skip Rugby Union

Foxtel’s EBITDA (A$mn)



Source: VENTURE INSIGHTS, COMPANY PRESS RELEASES

Several media outlets have reported that Foxtel has withdrawn its offer for a five-year deal to continue broadcasting rugby union in Australia. Rugby Australia has confirmed that they are in talks with the broader market about broadcast rights for 2021-25. Media has reported that Optus has made an offer in range of about A$30m which is significantly higher than the A$20m that Foxtel is willing to pay. Foxtel’s move is in-line with Venture Insights view that the Pay-TV operator will look to reduce its sports programming cost by reducing its exposure to certain sporting codes as higher programming costs and lower revenues translates into a fall in earnings. For a more detailed look at the challenges that Foxtel faces, click through to read our report.

Click to read report