iPhone 5G Launch Tipped Snare Telstra Rival Telco Customers

Our latest 5G iPhone report was covered by Channel News on their latest article on the device. It talks about how Apple’s 5G iPhone debut is tipped to help Telstra snare customers away from rivals, Optus and TPG as discussed in our latest report.

“This is an opportunity for Telstra to target and churn high-value customers from other networks,” states David Kennedy, Head of Research at Venture Insights.

“Our 2020 consumer survey shows that 68% of Australians who were interested in adopting 5G in the next 12 months were from Optus, TPG and MVNO providers, highlighting the opportunity for Telstra.”

Kennedy asserts the infrastructure investment has set up Telstra’s network leadership over the coming years.

“Telstra’s 5G network leadership will be attractive to new iPhone users who want to get the most out of their new iPhone,” he adds.

According to Venture Insights research, Telstra’s market update on its 5G roll-out demonstrates the potential for “clean network leadership” in the niche.

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NBN rolls out RSP support program to upgrade customers | Optus of [...]

CommsDay quoted our latest Australian Household 5G Fixed Wireless Substitution Forecast in their article on NBN RSP support program. The report discusses how NBN Co will support RSPs to develop their data modelling and analytics capabilities as well as market higher-revenue services to their existing customers as part of a new co-investment program to help increase the returns from existing end users. It also talks about how Optus has become the first of Australia's mobile operators to offer 5G mobile wholesale services to its MVNO partners.

Australian mobile operators will be able to carve out a niche for 5G fixed wireless services, attracting a combined 1.2m subscribers by end-FY2 Venture Insights predicts.

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FORECAST: Advertising spend in Australia won’t fully recove [...]

AdNews ran an article on Venture Insights latest report on AdEx market. It mentioned our forecasts that Australia’s total advertising spend won't return to 2019 financial year levels until 2022 and adspend is expected to grow strongly after that, picking up 4% each year to 2024 despite the impact of the COVID-19 pandemic.

David Kennedy, head of research at Venture Insights, was quoted as saying "Digital spend has been relatively robust, while traditional segments such as television, print, cinema, outdoor and were hit hard and will now form a smaller share of the overall adex budget."

David said that COVID-19 has masked an underlying decline in FTA television. “Even before the pandemic, we were seeing faster decline in FTA ad revenue driven by lower time spent in front of the TV. BVOD is growing fast but is still not big enough to offset these declines."

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Tower market faces rocky road as small cell growth changes market

CommsDay quoted our latest Australian Tower Market 2020 report in their article on tower market. It referred to our finding that Australia’s tower owners will face competition in the urban small cell market from fibre companies and carrier-neutral providers, as mobile operators shift their focus more on to capacity. As a result, the tower owners won’t be able to dominate the small cell market, particularly as macro-sites are reused to host 5G equipment.

Managing director of Venture Insights, Nigel Pugh, was quoted as saying "All three carriers have been expanding their tower networks only incrementally in recent years, and site growth is low. There is not enough new revenue from 5G to support material additions in macro-tower installations. But 5G will bring cost efficiencies and more data capacity, and represents a ‘rental’ opportunity for tower owners."

Nigel said there would be a “significant upside” if the well-publicised Optus tower sale was to be followed by a TPG sale, leading to rationalisation of tower sites. “A combined tower network would benefit from significant synergies via network optimisation and lower maintenance costs across a larger network,” he said.

Nigel said Telstra was less likely to be a participant in tower sales than the other two operators despite setting up Infraco. “The challenge that Telstra faces is reconciling its desire to maintain its retail differentiation, which is still strongly focussed on the coverage and capacity of its gains from its mobile tower sites, and also to maximise the revenue it gets from its assets,” Nigel said.

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Huawei drops rugby sponsorship amid Australian downsizing

Managing director of Venture Insights, Nigel Pugh, was quoted in the Financial Times on Huawei withdrawing as the main sponsor of the Canberra Raiders rugby league club amid a downsizing in Australia, which implemented a ban on the Chinese company selling 5G equipment.

Since the ban was announced in 2018 on national security grounds, Huawei has laid off about 1,000 of its 1,200 workers, ended A$100m ($74m) in research and development partnerships and disbanded its local board.

“The ban on Huawei was a big blow to the company in Australia,” said Nigel. “We are very likely to see similar effects to its business in the UK, potentially even more so, because Huawei is a big player in fixed broadband as well as mobile in Britain.”

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Gloves off: Google turns to its users in fight against Australian [...]

Venture Insights head of research David Kennedy was quoted in the Sydney Morning Herald in an article on Google's response to Australia's new News Media Bargaining Code.

The new code will force Google and Facebook to strike commercial deals to pay media companies for their news content, snippets of which run on Google’s news page and at the top of search results. It will also force the digital giants to give media companies advance warnings about any changes to the algorithms that power search results and news feeds and provide information about the collection of user data.

Google placed a warning message on its search page, visited by millions each month, with a link to an open letter to users. "The way Aussies search every day is at risk from new government regulation," it read. It has also asked YouTube influencers to complain to the government. In the letter to users, Google said proposed rules would "dramatically worsen" the experience for Google users in Australia, threaten its free services in Australia and also lead to privacy risks by forcing it to share data with "big media" companies, it argued.

David said, "I think it’s going to be very difficult to get users excited about a code for the advertising sector", referring to Google's public relations offensive. David also suggested that the new code has international implications. He said, "It’s about international precedents. It is the best shot that any regulator has made so far", further adding, "I don’t think it’s any secret that the ACCC would’ve consulted with their international counterparts ... those counterparts will be watching closely what is happening here."

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Telstra to extend 5G footprint despite takeup concerns

Venture Insights MD Nigel Pugh was quoted in The Age on the roll out of 5G in Australia and consumers aren't fully sold on paying more for 5G.

Telstra is planning to deliver 5G services across 75 per cent of its mobile network by June next year in a bid to build a decisive lead over its rivals and encourage more consumers to make the jump to the new technology. It is reported that more than 10 million Australians now "live, work or pass through" the telco's 5G network footprint on a daily basis.

With more Australians stuck at home, and many losing their jobs, because of the pandemic, telco analysts are concerned that the shift could slowdown the takeup of 5G mobile services, especially as households tighten their belts.

Nigel said "People are interested in the technology but they are not interested in paying more for it."

An economic downturn will only exacerbate this resistance, limiting the ability of telcos to capitalise on their 5G investment. "We expect 5G takeup and rollout to be slower than we previously anticipated."

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Lack of tech expertise holding back Australia’s SMBs

Venture Insights and Optus Small Business have conducted survey of 602 Australian SMBs which highlighted the importance of remote access, online ordering/billing and technology for businesses to achieve their goals.

The report reveals that over 40 per cent of Australian SMBs believe that adopting smart technology to improve business efficiency will have the biggest impact on their business in the next three years, yet 31 percent are struggling to keep pace with technology changes critical to their business success.

Optus Managing Director of SMB, Libby Roy, said with over 2 million Australian SMBs, the research clearly shows that business connectivity is critical to drive economic resilience and prosperity.

He added “Poor connectivity can leave businesses in a digital hole. By adopting the latest digital and connectivity tools available today, SMBs can be better equipped to make their business more productive and successful. The power of 5G is also an untapped opportunity for many SMBs to have digital at their core transforming the way they work and operate.”

Venture Insights MD Nigel Pugh said “Connectivity is more important than ever for businesses, whether it is for sustaining business operations remotely, connecting with customers anywhere, or efficient remote monitoring of assets and inventory.

“With SMBs as the engine room of the Aussie economy, their continued success and digitisation are critical for the nation.”

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Digitisation key to small business success : survey

Venture Insights was quoted in The Business Conversation and Kochie's Business Builders on its behavioural change survey commissioned by NBN.

The Australian Small Business and Family Enterprise Ombudsman Kate Carnell says new research is proving once and for all that digitisation is a key driver of success in small businesses.

Ms Carnell said “COVID-19 has delivered a harsh lesson that small businesses can’t rely on outdated business models and brick-and-mortar stores anymore. Digitisation is now essential for a small business to be truly competitive."

Paul Tyler, Chief Customer Officer Business at NBN Co said the research suggests small businesses can benefit from the switch to online shopping.

He said "Our research highlights that consumers are shopping more online and consuming from local businesses as a result of their experience with COVID-19 social distancing measures. I hope that this sentiment can become an opportunity for local businesses to adapt and emerge from this time in a position of strength.”

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NBN study finds many consumers shopping local, even online

Venture Insights was quoted in the Communication Day on its behavioural change survey commissioned by NBN.

The survey indicated that 7 out of 10 people had consciously supported local businesses online and the same number would like to support more local businesses, but felt they had a limited online presence. Developing a stronger online presence, adding innovation to product and service offerings and providing home delivery were selected as the top strategies local businesses could adopt to make it easier for people in their communities to support them. 

NBN's Co's chief customer office - business, Paul Tyler said "Our research highlights that consumers are shopping more online and consuming from local businesses as a result of their experience with COVID-19 social distancing measures."

He added "The challenges businesses have faced as a result of this crisis are many and significant, however this research highlights a unique opportunity for local businesses to harness new levels of consumer goodwill and demand online."

In a separate statement, communications minister Paul Fletcher said: "There are now more than one million businesses now on the NBN. However, many smaller businesses are still on residential-grade plans and may benefit from a business-grade service with additional features such as symmetrical speeds and priority support to minimise down-time. I encourage Australian businesses to speak to a telecommunications retail service provider to find a plan best suited to their business requirements and to invest in digital channels to make the most of increasing demand for online commerce."

Australians ‘buying local’ online

The Morrison Government welcomes new research released today showing that Australians are increasingly supporting local businesses online.

Conducted by Venture Insights on behalf of NBN Co, the research shows that 49 per cent of respondents have increased their spending on online shopping since social distancing measures came into effect. More than two thirds (70 per cent) are consciously supporting local businesses online.

The survey found that more than two thirds (70 per cent) of respondents also said they would like to support more local businesses, but were restricted by the limited digital presence of those businesses.

Communications Minister Paul Fletcher said the research demonstrates remarkable community spirit and are supporting each other where they can, including backing local businesses during these challenging times.

He added "Businesses have encountered many unprecedented challenges during COVID-19, and what this research shows is that there is a significant opportunity for businesses to expand online and harness the very strong ‘buy local’ sentiment of consumers. The survey results show that people are committing to local businesses and would spend even more of their hard-earned money locally if businesses were more accessible online."

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How much a home office costs to build

Venture Insights has conducted a behavioural change survey commissioned by NBN.

The survey found 81% of respondents say the experience of working from home has positively changed the way they think about managing work/life flexibility, while 67% expect to WFH more frequently once the crisis is over.

Venture Insights MD Nigel Pugh said “As working habits have changed over the past several weeks, many preconceptions about the viability of long-term remote working seem to have shifted,”

He added “We’ve seen in the research that, for many Australians, this change in routine has given them the freedom to embrace greater work/life flexibility. In light of this, it’s not surprising that two-thirds of respondents who worked from home are interested in maintaining their new ways of working even after restrictions are lifted.”

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Australians increasingly online for health and wellbeing services

The Morrison Government welcomes new research released today showing that the health and wellbeing of Australians is increasingly supported by digital services.

Conducted by Venture Insights on behalf of NBN Co, the research shows that while lifestyle habits have shifted dramatically as a result of the COVID-19 pandemic, the access Australians have to broadband has played a significant role connecting people to each other and to essential services. 

The survey found that almost half (48 per cent) of survey respondents who had a medical consultation in the past two months have had a telehealth consultation, while the number of respondents 65 and over saying that their household has accessed telehealth services doubled from one in eight (13 per cent) to one in four (27 per cent). Around two thirds (63 per cent) of all respondents said they are now open to more frequently using telehealth services after COVID-19.

Communications Minister Paul Fletcher said the research demonstrates the critical role of the National Broadband Network (NBN) in boosting the nation’s productivity, connectivity and social cohesion. “The research supports the decision by NBN Co to offer higher bandwidth NBN connections to Australian GP clinics at no extra cost during the pandemic, allowing them to provide more services by telehealth,” he said.

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Coronavirus: New normal as workers home in on remoteness

Venture Insights was quoted in The Australian on its behavioural change survey commisioned by NBN.

The survey found that two in three Australians working from home expect to spend more time in their home office or at the dining room table after the COVID-19 pandemic is over. And 81 per cent say their work/life balance has improved as a ­result of the enforced lockdown. The survey also finds more than half those working from home had created a new or dedicated office space.

Venture Insights MD Nigel Pugh said "As working habits have changed over the past several weeks, many preconceptions about the viability of long-term ­remote working seem to have shifted. For many Australians, this change in routine has given them the freedom to embrace greater work/life flexibility. In light of this, it’s not surprising that two-thirds of respondents who worked from home are interested in maintaining their new ways of working, even after restrictions are lifted."

Broadband traffic during business hours through the NBN has increased 70 per cent since the COVID-19 crisis began on March 1, and more than four in five of those surveyed said they could not have managed in their job without access to fast broadband.

“The way Australians use the internet to work, learn new skills and connect with their family, friends and colleagues has been transformed, and we expect that many of these new behaviours are here to stay,” NBN Co chief customer officer Brad Whitcomb said.

Communications Minister Paul Fletcher said the survey results were evidence of the importance of rolling out a reliable fast broadband platform across Australia. “The immense challenges presented by COVID-19 have prompted businesses and their people to become more flexible, adaptable and innovative in how they go about their work,” he said.

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NZ’s pandemic lockdown proves point of the need for fibre

Venture Insights has conducted a NZ consumer telco survey in February 2020. The report is a wide ranging analysis of how NZ telcos are stepping up to WFH and the short-term and long-term implications of COVID-19 on NZ telcos. Below is our survey report being referred by the Chorus CEO, JB Rousselot. 

Chorus CEO, JB Rousselot, said: "Broadband in New Zealand was really put to the test by our pandemic response, so it’s encouraging that speeds have held up so well. Fixed line broadband, and fibre specifically, has helped people to keep working, learning and staying connected with family and friends."

Research commissioned by Chorus has also shown that New Zealand’s internet usage patterns look set to change beyond the COVID-19 pandemic response.

"The research has highlighted a sea change of opinion around the importance of broadband with nearly three quarters of those surveyed agreeing that broadband is now ‘very important’, up from 50 percent pre-COVID-19.

"With prolonged experience of working and learning from home, more than half of us now foresee increasing the amount of time spent working from home. This will likely be fostered by businesses having invested in new audio and video conferencing tools and cloud services, alongside staff seeing the positive benefits to work life balance without the need to commute," said Mr Rousselot.

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Telcos must overhaul underperforming CX channels post COVID-19

Venture Insights was quoted in the Communication Day on its COVID-19 and the ANZ Telco market report.

The report found that operators were caught off guard by the overnight shift in customer preferences for support channels away from retail stores once the COVID-19 crisis hit. Many benchmark telcos tried unsuccessfully to redirect trafic to their website and live chat channels, which only served to highlight the inadequacies in these channels.

Venture Insights said its research found that many calls to call centres are not getting through, which is expected to drive a surge in customer complaints.

Venture Insights MD Nigel Pugh said “We expect Jan-Mar 2020 complaints data is likely to reveal that recent gains in 2019 over historically low customer satisfaction scores have been wiped out, as customers get increasingly frustrated,"

He added "Telcos need to prepare for a post COVID 19 world where customer behaviour has changed permanently. Self-serve channels such as web and social will play a greater role in sales and service.” 

Foxtel was struggling to survive before COVID-19 but the lack of [...]

Venture Insights MD Nigel Pugh was quoted in the ABC News on Foxtel's dilemma due to the devastation COVID-19 is causing to the economy and the impact it will have on discretionary spending, such as on pay TV.

Nigel said "The Kayo product, and this was pre-COVID, was a good product launch, we had concerns that it would ultimately lead to cannibalisation, but there's no doubt about it that they had to do it to remain competitive."

He added "There's still the potential for HBO to launch its own HBO max service, as Disney had. There's also the potential for the sporting organisations themselves to offer their content direct to consumers."

He believes it would be particularly hard for Foxtel to survive that, if it happens.

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COVID-19 crisis could hit mobile ARPUs, 5G adoption

Venture Insights was quoted in the Communications Day on its COVID-19 impact on mobile ARPUs, 5G adoption and MVNO wholesale prices report. 

The COVID-19 crisis could pose further challenges for Australian mobile operators already facing ARPU pressures due to competition and changing consumer habits, and could threaten their ability to extract value from thier 5G investments. 

Venture Insights MD Nigel Pugh said "We believe this drop is also a consequence of consumers wanting to spend less on telecommunication services in the near future."

"Under this environment plus any future pressure on household spending, we believe it may be difϐicult for MNOs to extract a 5G price premium from consumers,” he added noting that Telstra had been planning to charge a $15 per month 5G premium on some of its plans after June.

“We believe that the telco industry should be resilient in the short term, but its longer-term performance will be dependent on how the economy performs and any shifts in household spending,” Pugh said.

Venture Insights' consumer survey conducted in March found that 37% of respondents looking to switch service providers were looking to switch to MVNOs or resellers. Factors including the closure of physical stores and call centres and the temporary increases may shield the mobile industry from any mass exodus of customers – Venture Insights is predicting that these measures will actually decrease churn in the short term. But longer term, the economic downturn that is now inevitable could result in significant churn from mobile operators to MVNOs, Pugh said.

Most Australians feel their broadband is adequate for remote work [...]

Venture Insights was quoted in the Communications Day on its National consumer surveys on how the virus is changing consumer attitudes to issues such as working from home and home broadband needs. 

Venture Insights found that 42% of consumers with an existing broadband connections expected to increase their days working from home, and a further 26% were planning to start working from home. Of those currently working from home or expecting to, 54% believed their broadband service was suitable.

Venture Insights MD Nigel Pugh said that the company hadn’t directly asked why people felt their services were inadequate, but customers who wanted to churn providers indicated that after price the most common reasons were network performance followed by data allowance.

Venture Insights further warned that many of those working from home were likely to have limited IT equipment and rudimentary cyber security capabilities, with unsecured routers, unpatched PCs and home IoT devices all providing a massive increase in potential attack vectors for organisations. 

Government in discussions to rate limit OTT traffic as pandemic w [...]

Venture Insights MD Nigel Pugh was quoted in the Communications Day on the Federal Department of Communications' discussion with streaming and gaming platform owners around temporary measures to lessen network load. 

Nigel said "Adaptive bitrate would be a problem in Australia and should be addressed by the OTT players given NBN is opening the CVC for business to work from home."

He added "It really proves the point that OTT players will utilise whatever bandwidth they can get and hence cost recovery by infrastructure players is still important."

Venture: NZ telco market to remain almost flat

Venture Insights was quoted in the Communications Day on its New Zealand Telco Market Outlook report. 

Venture Insights said the overall retail telco market in NZ will remain almost flat (2019-2023 CAGR 0.4%) with mobile growth driven by a move to post-paid plans and 4G/5G to offset the structural decline in fixed voice. Total retail revenues will reach NZ$5.5bn in 2023. Fixed voice continues its structural decline as subscribers shun the landline and migrate away from standalone fixed voice services to mobile bundles and broadbands + VOIP bundles. The UFB rollout is on track and 79% of the population can access UFB as of September 2019. 

Sports rights more likely to go to telco and tech giants

Venture Insights was quoted in The Sydney Morning Herald on the Sports Rights report.

Venture Insights said the costs of broadcasting rights for Australia's major sports the AFL, NRL, Cricket Australia and Australian Open swelled by almost 8% CAGR over the last decade, causing broadcasters such as Nine Entertainment, Seven West Media, Network Ten and Foxtel to reach their limit on cost of sports codes.

Venture Insights said the growth did not align with viewership numbers for the sports or the revenue decline of local broadcasters. "Broadcasters have faced challenging market conditions with the berth of new technology-enabled players (eg. Netflix, Stan) intensifying competition and challenging their dominant position within households. Advertising revenues are also declining as advertisers move online to Facebook and Google. The large increase in the cost of tier-one sports rights and declining revenues leaves broadcasters on an unsustainable path. The free-to-airs and Foxtel are either going to sacrifice their profits for the rights, bargain for a reduction in deal size for the rights, take smaller packages or start losing the rights altogether" the report says.

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Rugby Australia’s open market process for its media rights

Venture Insights MD Nigel Pugh was quoted in the Communications Day on Rugby Australia is looking to bundle the rights to all Rugby competitions together from club rugby through to the Wallabies and present a "whole of game" package to potential broadcasters. Nigel said "Foxtel looking to decrease its sport programming costs and Optus naturally looking at new options to build its existing sport portfolio such as the recent announcement to provide, with Seven Network, coverage of the 2020 Tokyo Olympic Games over a 5G network."

He added "I think that sports will be an integral component of Optus's overall strategy in Australia and that sports streaming over 5G will emerge as a key 5G use case as the network rolls out. That said, there has been a long relationship with Rugby and Foxtel so it will be interesting to see how the price negotiations and valuations from the two parties play out."

Foxtel could reach a “tipping point” this year

Venture Insights was quoted in the Communications Day on the Video Entertainment Market Outlook Report.

Venture Insights predicts a 5.1% fall in CAGR for Australia’s pay TV sector through to 2023, while tipping SVOD revenues to rise by more than 12%, led by market leader Netflix.

The total video market in Australia is expected to be worth $5.8 billion by 2023. By then Venture Insights expects Pay TV and SVOD to contribute revenues of $2.25 billion and $1.7 billion respectively, something that would have been unthinkable 5 years ago. Cinema will be worth around $1.25 billion, based on a projected modest CAGR decline of 0.2%.

UBS Australasia Conference

UBS held its annual Australasia investors conference over 18th and 19th November in Sydney, with a number of interesting panels across the two days. Venture Insights MD Nigel Pugh moderated the Cyber Security panel and attended a number of interesting sessions over the two days. Below are some of the key takeaways from the sessions on artificial intelligence, cyber security, digital health and fintech investment trends.
• Talent and skilled workforce shortages remained a universal theme across all four sessions.
• The big tech giants are dominating the artificial intelligence space and are investing massive resources into custom chip development.
• The cyber security sector in Australia has grown by 380% over the past 2 years as the perception around cyber threats has changed from being an IT related risk to a business risk.
• Scale remains an important factor that will drive the growth of digital health adoption.

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Telstra Health

Venture Insights was quoted in the Communications Day on a report about Telstra Health and the wider digital health sector, which also questions whether Telstra is the best company to run the growing business. 

Venture Insights said "The spiralling healthcare costs and Australia's ageing population is leaving the healthcare sector in an unsustainable situation, and without significant productivity gains the standard of health services in Australia will need to be reduced."  

Australia mobile sector cool on active network sharing, even as U [...]

Venture Insights MD Nigel Pugh was quoted in the Communications Day on the financial risks associated with 5G. Nigel presented on this topic at last month's CommsDay Melbourne Congress and told CommsDay shortly after that he believes it is time to look again at network sharing models. 

He said "In particular we believe a focus on regional RAN sharing and small cells may be targets for either joint venture or neutral host players - and highlight the NZ shared RAN model for rural connectivity. If governments continue to heavily subsidise regional network coverage then, in addition to mast sharing, they should consider the customer benefits of active RAN infrastructure sharing and the use of train repeaters to maximise investment outcomes."

Looming 5G threat to NBN just got real

Venture Insights MD Nigel Pugh was quoted in the Australian Financial Review on the looming 5G threat for the NBN. Nigel said "There’s definitely appetite in the market to try a wireless product, so that’s a big threat for the NBN".

He added "If Optus' 5G fixed wireless product delivers on its promise of guaranteed peak time speeds of at 50 Mbps, and up to 400 Mbps, for the same price as the NBN's 50 Mbps plan, it will be a seriously competitive proposition. Our own research shows people are very open to switching to fixed wireless. Optus has every reason to push this product. I don’t know what the margins are for their 5G product, but their margins for their NBN products are clearly very low. It doesn’t look like NBN pricing is changing any time soon, so I think the strategy of pushing people onto their network is a good one."

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Telstra Wholesale plans symmetrical 4G plus 5G offerings

Venture Insights MD Nigel Pugh was quoted in the Communications Day on the effect of NBN Co targeting resellers with new enterprise and business offerings. Nigel said "To date, the majority of Australian MVNOs have been focused on the consumer market and when MVNOs do sell into the business segment they are usually leveraging an existing business brand".

He added "However, I believe that NBN business broadband will enable more challengers to enter the fixed business market, e.g.: Commscentre - and as such it's only a matter of time before these players look to become MVNOs in order to bundle 4G and 5G mobile services and also take advantage of 5G network slicing for higher quality business mobile services. As such we expect to see more MVNOs enter the business segment."

Telstra Wholesale Business Connect Conference

On 29th October 2019, Venture Insights MD Nigel Pugh presented his views on the Australian MVNO market at Telstra Wholesale’s Business Connect conference in Sydney. Key takeaways from the presentation included:
• Global MVNO market size is expected to nearly double between 2018 to 2025, growing at CAGR of about 8%.
• The Australian MVNO market has grown from 1.5m subscribers in 2010 to 3.2m subscribers in 2018. MVNO subscribers have grown at a CAGR of 10% (2011-18) compared with MNO handset subscribers which have grown at a CAGR of 0.9%.
• MVNOs have over 20% market share in metro areas with our survey results showing strong future demand for MVNOs.
• With a focus on niche segments or linkages to strong brands, the test of most MVNOs is (i) how well they know their target customers, (ii) what other services could be bundled and (iii) are there new market segments to target.

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Sorry Vocus, NBN isn’t going anywhere

Venture Insights MD Nigel Pugh was quoted in the Australian Financial Review on Vocus CEO Kevin Russell's speech at the Vocus AGM. Nigel said "NBN Co's move into enterprise had changed the market. I think it’s a big deal for anyone that’s got infrastructure in place," he said. "You may have done an enterprise deal four years ago, which may involve putting fibre in place, and then four years later you're overbuilt by NBN. So that’s going to have to affect on the value of that asset". 

He agreed with NBN Co's point that the separation of wholesaler and retailer made NBN an attractive prospect to businesses and added "If you want to swap Vocus for Telstra it’s a lot simpler because it’s just a matter of switching retailer, not fibre.” 

He also agreed with Mr Russell's point that overbuilding – the laying of NBN fibre where other fibre already exists – was wasteful. "There could be some sort of hybrid model where NBN leases fibre already in place rather than overbuild them," he said.

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Comms Day Melbourne Conference

On 10th October 2019, Venture Insights MD Nigel Pugh presented his views on Shared Infrastructure Models and Open RAN (O-RAN) at Melbourne’s annual Comms Day conference. Key takeaways from the presentation included:
• With mobile network operators facing increased network spend and still defining incremental 5G revenue opportunities, Venture Insights believes it is time to look again at network sharing models.
• In particular we believe a focus on regional RAN sharing and small cells may be targets for either joint venture or neutral host players.
• Venture estimates that Government (States/Federal) and Industry spend at the end of round 6 of the blackspot program could be as high as $1.2B.
• Examples of blackspot funding for regional rail projects highlight the lack of benefits for all end customers from non-shared network projects versus shared.
• If Governments continue to heavily subsidise regional network coverage then they should consider the customer benefits of active RAN infrastructure sharing and the use of train repeaters (for example) to maximise investment outcomes.

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Subsea cable influx stimulating Australian data centre market

Venture Insights was quoted in the Communications Day on the Australian Data Centres and Submarine Cables Report.

The planned influx of subsea cables landing in Australia is expected to trigger strong growth in the local data centre market, according to new research from Venture Insights.

Venture Insights MD Nigel Pugh said "The majority of Australian submarine cables terminate in Sydney, but Perth and Queensland are expecting new submarine cable landings. This will drive growth in the data centre usage in those locations."

ACCC ‘not in real commercial world’ on TPG-Vodafone

Venture Insights MD Nigel Pugh was quoted in the Australian Financial Review on his views regarding the court case proceedings in the ACCC vs TPG-Vodafone merger dispute. Nigel said "If the court rules against the merger, TPG "would be likely to build a competitive fourth network – even if it had to incur a premium to change vendors".

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TPG-Vodafone to lose ACCC appeal, tips Venture Insights

Venture Insights MD Nigel Pugh was quoted in The Australian Business Review on the TPG Telecom and Vodafone Australia’s $15 billion merger. Nigel said "The telcos will struggle to convince the Federal Court that they can’t compete in the market without the merger".

He added "In our analysis, the application of the ACCC’s no merger position (arguably) shows that TPG would be likely to build a competitive fourth network — even if it had to incur a premium to change vendors,"

"Finally, given the level of industry consolidation, we believe future industry mergers will continue to pose regulatory problems and, we expect to see a focus on infrastructure mergers moving forwards with the retail business separated as a MVNO/ RSP," he added.

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ACCC will prevail in TPG-Vodafone appeal, predicts Venture Insig [...]

Venture Insights MD Nigel Pugh was quoted in the Communications Day on the predication that ACCC's February decision to block the proposed Vodafone-TPG merger will likely withstand a court appeal. Nigel said "Based on our analysis we believe the Federal Court could come to the same conclusion. TPG claims it is not likely to build a 4th network and there is now not a credible business case for the rollout of a new mobile network. Our high-level analysis predicts that TPG would likely find a way to build a network in order to compete as a mobile operator".

He added "Our high-level analysis predicts that absent the merger VHA would likely continue to compete as a mobile operator." Venture believes that the cost of the inability to use Huawei going forward has been outstated by TPG, as much of the expense of a mobile network is in passive and not active infrastructure.

Fletcher rules out NBN sale to Telstra

Venture Insights MD Nigel Pugh was quoted in the Sydney Morning Herald on the Communications Minister Paul Fletcher ruling out any chance of Telstra buying the National Broadband Network and nixed hopes of a cut to wholesale prices to ease pressure on the listed telco's profits. Nigel said he was "surprised the Minister made that comment" as there were several steps to be followed in order to sell the NBN, including a Productivity Commission review."

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