Fetch TV sees growth in FTA\ COVID-19 and the ANZ Telco market\ Australian government launches COVIDSafe\ Facebook’s Deal with Reliance Jio Platforms\ Telstra permanently boosts mobile data in response to COVID-19



 



Welcome to the Venture Insights newsletter!
In this week’s edition, we look at Fetch TV increasing its viewing audience, the impact of the COVID-19 crisis on the ANZ Telco market including our forecasts, the launch of COVIDSafe app by the Australian government, Facebook’s deal with Reliance Jio Platforms and Telstra’s permanent boost to mobile data in response to COVID-19.

CHART OF THE WEEK

Australian Consumer Broadband Telco Market Size



Source: VENTURE ANALYSIS. NOTE:  FIXED VOICE IS NOT SHOW IN THIS BREAKDOWN

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Fetch TV sees growth in FTA, pay TV, SVOD audiences

Average daily viewing (hrs:mins) by Fetch TV customers, by media type (total shown in bold)



Source: FETCH

Data from Fetch this week shows that SVOD got the biggest percentage boost in viewing time during the COVID-19 lockdown (26% between the weeks commencing 2 March and 20 April), while FTA (including both recordings watched and their BVOD services) captured the lion’s share of extra viewer minutes but grew less slowly off a bigger base (17%). Pay TV benefitted least, growing only 11%. But can the FTAs monetise this boost in such a weak advertising market? Read our report “COVID-19 impact on ANZ media: major structural and regulatory change now inevitable” to find out more.

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COVID-19 and the ANZ Telco market

Australia retail telco revenue growth by segment (pre-COVID baseline)



Source: VENTURE INSIGHTS

The lasting impact of the crisis on the ANZ Telco market will depend on its effect on the overall economy. We expect a slight reduction in the enterprise telco market growth below original 2020 forecasts as businesses downsize, look to reduce costs and in some cases, cease operations. Our survey results confirm that consumers are looking for better mobile deals. Our base case forecasts ARPU compression of ~4% versus the baseline due to more price sensitive consumers. Connectivity and Software are the most at risk from widespread business decline, while services and cloud and data centres are relatively insulated by the increased adoption of WFH practices. Australian Telcos have responded well to the immediate needs of the crisis, however few are moving quickly to meet the short-term challenges. In contrast, major international Telcos have offered a range of free products and services that will likely lead to upsell opportunities when the crisis ends. For more details, contact us to request full report. 

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Australian government launches COVIDSafe 

What is your key concern about using this type of application?

Source: VENTURE INSIGHTS SURVEY APRIL 2020, n=65

On 26th April, the Australian government launched the COVID-19 contact tracing app “COVIDSafe”. By Wednesday midday, more than 2.8 million Australians had downloaded the app, exceeding the government’s expectations. Although it is not a mandatory requirement, the government urges Australians to download and use the app, which will assist the government in lifting the restriction orders. At least 40% of Australians need to download the app in order to achieve the contact tracing purpose. The government claims that only health authorities would have access to the data on the app and no physical location data will be collected. But like any smartphone apps, there are privacy and security concerns. In order for more people to use this technology, the public need to trust that it is both safe and in their interest to use it. Last week, Venture Insights conducted a survey to our 6000+ newsletter subscribers for their views and concerns about using the COVID-19 Contact Tracing App. The survey results showed an overwhelming willingness to use the contact tracing app at 68% of the respondents but also noted concerns that the app “may set a precedent for future privacy issues”.  As such, although there are strong concerns, there is a clear willingness to work through this issue given the scale of the COVID-19 crisis – clearly this may not be the case for future apps. For more information on this survey, click to contact us. 

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Unpacking Facebook’s Deal with Reliance Jio Platforms

In Australia, Facebook’s advertising business is the main focus of regulatory concern. Facebook’s deal with Reliance Jio Platform is a reminder that Facebook’s ambitions range far wider. It also shows what is at stake in the ACCC’s platform regulation initiative in Australia. As digital giants expand, how they leverage their market power into new markets will become a big regulatory issue. Facebook will acquire a 9.9% stake in Jio Platforms at an enterprise valuation of roughly $65 billion. The deal brings together two companies that are desperate to tap into and corner the opportunities emanating from India’s “digital transformation”. For both Facebook and Jio, a “WhatsApp for Business” strategy might be their best shot at jointly monetizing their sizable user bases. Beyond the buzzwords and hyperbole, the deal is poised to become a privacy nightmare for India. This deal would be scrutinized by the Competition Commission of India (CCI), India’s antitrust body, but the regulator is unlikely to oppose it. For more details, contact us to request full report. 

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Telstra permanently boosts mobile data in response to COVID-19

What is the main reason you are thinking about changing your mobile service provider?



Source: VENTURE INSIGHTS CONSUMER SURVEY MARCH 2020, n=384

Telstra announced this week that it has significantly increased its standard mobile data plan allowances. Its $25/month Small data plan jumped from 10GB to 20GB, while its $50/month Medium data plan jumped the same amount from 50GB to 60GB. The biggest change was in the Large plan, where the old 100GB of data was doubled to 200GB. Interestingly, Telstra explicitly linked this change to the “new normal” of the COVID19 lockdown, and growing needs for remote working and videoconferencing. This move will help to  insulate Telstra from the competitive threats we foresee in the post-COVID19 environment. To see our view of the short and long term impacts of COVID19 on the mobile telecommunications industry, check out our report “COVID-19 impact on mobile ARPUs, 5G adoption and MVNO wholesale prices”

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