Australia's data dalliance
According to industry analyst Paul Budde, Telstra's bid to maintain its share of long distance, local calls and ADSL broadband services has cost it ground in the data market. Budde claims that Telstra, not wanting to cannibalise its traditional data sector based around ADSL and similar offerings, has failed to get behind faster and less expensive broadband services. Other data providers such as Optus are facing similar issues, and may well see an overall fall in revenue in the early stage of this migration.
Other data service providers, such as OzEmail are set to benefit from a market growth of up to 20.3 percent over the next five years. As Australia's largest ISP, and the only data-focussed service provider amongst the top ten Australian telcos in terms of size and revenue, the company is looking forward to healthy growth in the sector.
"Telstra, Optus and AAPT are all caught in the same situation," Budde says. "The growth in the sector is coming from the 800-odd other data and broadband service providers."
Understandably AAPT chief operating officer David Bedford is somewhat sceptical about forecast growth rates in the data sector.
"My view is that growth in the data market as a whole won't be as strong as some players are hoping it to be," Bedford says. "However, I do expect there to be growth within the IP and super-corporate space."
To this end AAPT is investing in a strategic partnering relationship with Alcatel to provide next generation networks throughout Australia and New Zealand.
"Through Alcatel, we aim to leverage their technical support and expertise to help speed our developments in IP and continue to grow our data business through Connect and TCNZA in the Top 100 market," Bedford says.
OzEmail, a comparatively new player in the broadband service delivery market, believes Internet traffic is set to grow steadily, while the number of new subscribers is expected to grow more gradually.
OzEmail CEO Justin Milne said "A lot of the predictions made about the Internet back in 1997 and 1998 are finally coming true. "The greatest amount of traffic we will see passing over the telecommunications network will be data and not voice traffic."
Milne points out that while Internet penetration nears the levels of overall PC penetration there is not further growth is likely to be driven by such traffic increases.
"There is still a fair but of speculation about the first time connectivity market, and it will continue to grow, driven by the most part by people who experience the Internet, or even high speed Internet at work," Milne says, expressing scepticism regarding the likelihood of emerging devices to further stimulate Internet connectivity rates.
And while he expects OzEmail to gain from further consolidation in the ISP market, he doubts there will be much interest in the sector from traditional voice providers.
"We are going to see some fierce competition between the ISPs and telcos, and in the last couple of months we have seen the a number of these companies become profitable," Milne said. "Even some of the mini-telcos are reporting profits and experiencing growth."
Nonetheless the forecast growth has caught the attention of voice-based telecommunications company Vodafone, who disagree with Budde's suggestion that mobile data will remain a poorly developed market.
"We have identified data as a growth opportunity, with a global target for mobile data revenue of 25 percent within three years," says Vodafone Australia's managing director Graham Maher. "In Australia the company is on track to meet that target through providing business customers with wireless office solutions."
Similarly in August Optus launched a multi-media messaging service (MMS) to complement the 88 million short message services (SMS) sent over the Optus mobile network per month.
However, Budde argues that such mobile data services are essentially an adjunct to mobile voice services, and is sceptical about the sector's development.
"Why would anyone pay over a thousand dollars to send a photo via the mobile phone, if the person at the other end also had to have spent a thousand dollars to receive it," Budde says. "It just doesn't make sense."
All we want are cheaper prices for a much better service.
I'm sick of these high prices on phones and internet because the bastards know we need to use them. So what do they do, take advantage of us becuase of the need for phones, suck us into a contract and then punish us for wanting to exit the contract because they changed or screwed the policy on the contract to rip more money from us.
I say, blow the pricks sky high and start all over again.