Telecom and pay-TV revenues in Australia are positioned for modest yet steady growth, with projections indicating a compound annual growth rate (CAGR) of 0.8%, climbing from USD 19.1 billion in 2024 to an impressive USD 19.9 billion by 2029. This uptick is largely attributed to the surging demand in mobile data and fixed broadband sectors. As 5G coverage expands and fiber networks receive crucial upgrades, Australians can anticipate a transformation in connectivity that will propel the market forward.

Mobile Services: A Shift in Dynamics

According to GlobalData’s latest Australia Telecom Operators Country Intelligence Report, traditional mobile voice services are on a downward trajectory. The increasing preference for over-the-top (OTT) communication platforms, coupled with a dip in mobile voice average revenue per user (ARPU), is steering users away from conventional voice services. However, the growth of mobile data services remains robust, anticipated to grow at a CAGR of 3.8%. This is fueled by a rising number of mobile internet subscriptions and an acceleration in the adoption of 5G services, which typically yield higher ARPU.

Kantipudi Pradeepthi, a Telecom Analyst at GlobalData, highlights that while 4G services will dominate mobile subscriptions in Australia come 2024, there is an exciting shift on the horizon as 5G subscriptions are expected to outpace 4G. This surge is largely due to aggressive expansion efforts by major players such as Optus, TPG Telecom, and Telstra, with Telstra aiming to extend its 5G coverage to 95% of the nation by the end of 2025.

Fixed Services: A Tale of Divergence

In the realm of fixed communication services, a contrasting story unfolds. Fixed voice services are anticipated to continue their decline, driven by diminishing voice over internet protocol (VoIP) subscriptions as traditional circuit-switched services fade into history. Conversely, the fixed broadband segment is set for growth, with projected revenues rising at a CAGR of 1.2% from 2024 to 2029. This growth is bolstered by an ongoing push towards fiber-to-the-home/business (FTTH/B) broadband solutions.

The Australian government has committed up to AUD 3 billion (USD 1.86 billion) in equity funding for the National Broadband Service (NBN), starting in January 2025. NBN Co is also set to invest AUD 800 million (USD 494 million) to upgrade the fiber-to-the-node (FTTN) network, which will enhance broadband access for an estimated 622,000 households and businesses by 2030. Meanwhile, the pay-TV sector is bracing for a downturn, with expectations of a decline in revenues driven by cable TV and direct-to-home (DTH) subscription losses, as cord-cutting continues to gain traction alongside the rise of OTT video services like Netflix and Stan.

Leading the Charge in the Telecom Landscape

When it comes to market share, Telstra stands tall, leading subscriptions across mobile, fixed, and pay-TV services in 2024. Its ongoing expansion into 5G and fiber broadband coverage not only cements its dominance in these sectors but also enhances its stronghold in the IPTV segment to sustain its pay-TV market leadership.

Pradeepthi underscores the imperative for operators amid this evolving telecommunications landscape, stating the need for strategic investment in high-speed connectivity and service innovation. “As Australia’s telecom landscape evolves, a keen focus on 5G rollout, fiber expansion, and digital service innovations will be critical to driving long-term revenue growth and meeting rising consumer expectations in an increasingly digital-first environment,” she concluded.

Questions & Answers

What is the expected growth rate for telecom and pay-TV revenues in Australia through 2029?
The revenue is projected to grow at a compound annual growth rate (CAGR) of 0.8%, increasing from USD 19.1 billion in 2024 to USD 19.9 billion by 2029.

Which sectors are driving the growth in Australia’s telecom market?
The growth is primarily driven by mobile data and fixed broadband sectors, with the expansion of 5G coverage playing a significant role in this trend.

What are some of the challenges facing fixed voice services in Australia?
Fixed voice services are declining due to a decrease in voice over internet protocol (VoIP) subscriptions and the phasing out of traditional circuit-switched services.