IDC CEMA Telecommunications Newsletter March 2008
 
IDC CEMA (Central & Eastern Europe and Middle East & Africa)
http://www.idc-cema.com/		  
 
Potential Consequences to Flow on as Telstra Plans to Switch on ADSL2+, IDC Reports


Sydney, Australia, February 12, 2008 – In a report just released, IDC states there is a potentially “bigger picture” situation evolving as Telstra plans to switch on ADSL2+ in over 900 exchanges, which could potentially have significant flow on effects to the greater communications market and in particular the regional and rural consumers of Australia.

“We believe that the announcement from Telstra to activate their remaining ADSL2+ ready exchanges as a result of Ministerial assurance and the Government’s requirement to cull more than $10 billion dollars of funding are related. As a result the Opel Pty Ltd funding will potentially be a casualty of larger macro economic inflation management processes,” said David Cannon, Programme Manager, Telecommunications at IDC.

“The activation of the ADSL2+ exchanges gives regional and rural communities metro-like broadband services and will counterbalance any negative public sentiment should the Opel funding be withdrawn,” said Cannon.

If correct in its ‘macro economic inflation management’ assumption, IDC predicts additional consequences in the industry will include,
  • The announced (in January 2007 and subsequently re-affirmed in December 2007) Optus 3G network build to 96% of Australians will not go ahead, remaining only in major metro / regional areas. This effectively provides Telstra with a competitive stay of execution in regional and rural Australia.
  • IDC believes Vodafone may need to re-evaluate its plan to build out its own 3G coverage through its network agreement with Optus. At it's most extreme, the Optus delay could result in Vodafone reassessing its commitment to the Australian 3G mobile market – either triggering another network partnership deal or a possible market exit.
  • The balance between the ACCC and the Government’s relationship will be increasingly strained. The Government's decision to provide assurances to Telstra may be interpreted as a backdown, encouraging Telstra to ignore the regulator and engage in legal saber rattling for extended periods of time while Telstra enjoys market share monopoly and profits.
  • Consumers of both fixed and mobile broadband in regional and rural areas will continue to pay higher fee's that than those enjoyed by their metro counterparts as a result of lack of competition for an extended period of time.
For more information about purchasing this study, please contact:
Tatiana Hinova
+420 221 423 140
thinova@idc.com

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