CHART OF THE WEEK

Key drivers of adopting smart homes

East coast’s first submarine cable outside of Sydney zone lands in Sunshine Coast

Data centre supply volume by geography

The Australian data centre market is rapidly expanding, and the Brisbane and Perth regions are being targeted as growth areas by the submarine cable industry. The Sunshine Coast Council announced the arrival of Japan-Guam-Australia South (JGA-S) submarine cable at its coast, which will be Queensland’s first direct international data and telecommunications connection to global markets after the project’s completion around March 2020. The Sunshine Coast Council and the Queensland Government have invested A$35m for this 550 km branch to connect to the JGA cable. We believe that this will provide a boost to Brisbane’ data centre market, and it will grow at a CAGR of 20.8% and reach 119 MW in supply volume by 2026 from the current 32 MW. There are other submarine cables planned for Australia in the next two years including the Coral Sea Cable System (2020), Oman Australia Cable (2021), Southern Cross Next (2022) and H2 Cable (2022). For a more detailed outlook on the current state and the growth of the data centre and submarine cable industry in Australia, click through to read our report.

Lightbox will merge with Neon

The last few years have seen the launch of multiple video streaming services in New Zealand including Lightbox, Quickflix, Netflix and TVNZ streaming all its channels, with Disney+ being the latest entrant. On 19th December 2019, Spark announced that it has reached an agreement with Sky Network Television Limited to sell its SVOD business Lightbox. The combined SVOD platform should help it compete against the larger global players. Venture Insights expects that faster smartphones and faster network technologies (5G, Hyperfibre) will act as a catalyst for the growth of the SVOD market in New Zealand, which will, in turn, drive the data demand, which has already increased by more than 8x during the 2013-2018 period. Unlimited data connections now account for seven out of every ten households in New Zealand, and we expect the demand for unlimited connections to keep growing through to 2022. To read more on the impact of SVOD on the data usage and telcos in general in New Zealand, click on to read our New Zealand Telco Market Outlook. We will be releasing a report on recent 5G updates in New Zealand shortly.

Extra mobile broadband spectrum to be auctioned in 2021

Australian Mobile Market Penetration (Excl M2M)

The Australian Communications and Media Authority (ACMA) has announced the auction of a total of 70 MHz spectrum in the 850 MHz and 900 MHz bands. These high-value spectrum bands are intended for mobile broadband use and will assist the deployment of 4G and 5G services in Australia. Venture Insights expects the mobile market to experience continued growth in Australia due to the arrival of 5G and the emergence of wireless access to the internet as an alternative to fixed broadband. By 2022, we forecast the mobile to remain as the largest segment of the overall telecommunications market with A$22.3bn in revenue and expect approximately 22% of the households to have access to the internet primarily through wireless means driven by 5G (and non-NBN fixed wireless services). Click through to read more on how the Australian mobile telecommunications market is facing disruptions (e.g. potential TPG-Vodafone merger, restrictions on Huawei) and innovations (e.g. 5G).

Vodafone Australia selects Nokia for 5G infrastructure

Vodafone ran the first live public 5G trial in Australia in 2016 with Nokia and is now set to start offering 5G services to consumers in early 2020. The issue of telecommunication equipment suppliers for 5G has been a sensitive political issue in Australia due to Government concerns around potential security issues of critical networks. As such, Huawei has effectively been blocked from 5G in Australia since August 2018 and Vodafone is now the final of the three MNOs to select a 5G vendor. Similar to other western countries, Nokia has benefitted from these restrictions with for example, Spark NZ abandoned its plans to exclusively use Huawei equipment for 5G services and chose Nokia for 5G rollout instead. Now, Vodafone Australia has also chosen Nokia for its 5G network, even though it previously used Huawei equipment in its 4G network. According to some media outlets, Vodafone has no plans to charge customers extra to use 5G given its later entry as compared to Telstra and Optus.