Telco industry set for a shake out

Australia's telco market is too small, forcing at least one of the major carriers to disappear, Deloitte Touche Tomatsu predicted today.

The company's telecommunications and technology partner, Peter McIver, said the Australian market would eventually force out one major telco.

He said surveys looking at forecasts for the next four years have found there are "too many big guns".

"Our surveys in the last three years say there will only be three full-service carriers that will survive in Australia with its population," McIver said.

"Recently, we've just seen a shuffling of players but really we need to see one less major player."

McIver predicted the emergence of a major regional "megacarrier" in the Asia-Pacific region within five years alongside the development of companies targeting niche markets.

Based on industry research, he said only five wireless and mobile carriers would remain by 2005, and data carriers will be reduced to eight.

McIver said another key issue identified by telecommunications industry players was the need to educate its target market about products.

"The public doesn't understand the products being brought out and there's a challenge to educate consumers," he said.

"To achieve revenue it's important that they are well educated - we need to explain the advantages of the technology because if the timing [of change] is too quick you end up with nobody taking up the technology."

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