The latest NBN Wholesale Market Indicators Report by the Australian Competition and Consumer Commission (ACCC) has revealed a flattening of the residential broadband market in the December 2022 quarter.
*Also listen to the audio version of this article on Spotify HERE.
The report analyses the wholesale market for NBN services, where retail service providers purchase access for supply to consumers and businesses. The top three providers – Telstra, TPG and Optus – experienced a decline of almost 95,000 services, reducing their market shares slightly.
Conversely, Vocus and other smaller providers gained approximately 86,000 services, making up the remaining 22.1% of the market.
While the report suggests that this shift from larger providers to smaller ones is helping to increase competition within the sector, I am more critical of that as the top four remain a marketshare of 85% plus. The smaller ones just gained 0.1%.
The 50 Mbps speed tier was still the most popular, accounting for almost 53% of residential services, despite dropping by 1.4% during the quarter. The 100 Mbps tier remains the second most popular, with a 2.2 percentage points increase to over 13%.
This is still a rather low number and reflects the relatively high price for services above 50 Mbps. Not surprisingly, under the current economic circumstances, the 250 Mbps and 12 Mbps tiers both saw a drop in the number of services, by 0.6 and 0.3% respectively to 1.3% and 8.8%.
So understandably, the ACCC urges consumers to carefully assess their needs before upgrading to more expensive plans.
Currently, there are 19 broadband providers accessing NBN directly at all 121 points of interconnection (POIs), compared to 13 in the December 2021 quarter. The quarterly average bandwidth that NBN supplied to consumers through retail providers increased by 1.6% to 2.97 Mbps per user.
Changes in the technology mix are continuing at a snail's pace. Fibre to the Premise (FttP) has increased slightly from 19.3% to 20.2% year-on-year; Fibre to the Node (FTTN) has dropped from 36.0 to 35.1%; Fibre to the Curb (FTTC) from 12.8 to 12.7%; wireless increased from 4.3 to 4.6%; and satellite slipped slightly from 1.3 to 1.2%. At this pace, it will take forever before Australians will be able to enjoy a truly high-speed broadband network.
On a different front, retail service providers are facing licencing.
There are an amazing 1,500 retail service providers (RSPs) according to the Telecommunications Industry Ombudsman (TIO), but none of them is registered, something the Ombudsman says it will be pursuing in the months ahead.
The call for a shake-up of the sector was initiated by the Australian Consumer Action Network (ACCAN). The organisation wants retail providers to be licenced, which will certify them as being able to provide the minimum capabilities required to deliver a telecom service to consumers.
The move is long overdue but has been given new impetus following a year of cyberattacks on entities such as Optus and Medibank. The Australian telecommunications sector is worth around $33.7 billion this year, although that will be down about 1.8%, according to sector analyst IBIS World.
*This article is also available on audio here:
Paul Budde is an Independent Australia columnist and managing director of Paul Budde Consulting, an independent telecommunications research and consultancy organisation. You can follow Paul on Twitter @PaulBudde.
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