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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