'Four pillars' to prop telco space: survey

Like the local banking industry, the Australian telecommunications marketplace is headed towards a "four pillars outcome", according to a report by Deloitte Touche Tohmatsu.

Commissioned by the consultancy, the "Deloitte/Decisive Publishing Post Deregulation Telecommunications Survey" polled executives about their thoughts on the state of play within the local telco space. According to the company's telecommunications partner, Peter McIver, the results suggest a radical transformation of the Australian carrier market to a point where just four full-service providers are expected to survive the onslaught of deregulation.

While the Australian telco market currently supports 28 registered carriers, McIver said this number is bound to drop as the industry begins to rationalise from within. He expects this "four pillars" prediction to come to fruition within the next three to five years.

"There'll be continued rationalisation and also questions about the economic sustainability of all these carriers. We can't have 28 in the long term. There'll be specialist niche players, but at the end of the day, to offer a full range of services -- voice, data, Internet and mobile -- we're really going to get down to four," he explained.

"For consumers it will still mean choice, and the act's objective was long-term interests of end users, which means lower prices and more choice. Having a choice of four offering full services is probably sufficient for a consumer, because at the moment I think a lot of consumers are pretty confused about the difference between one carrier and the next.

"There'll also be a turnaround on service -- a focus on service, rather than [on price]. So that'll be good for the customer at the end of the day." In this age of anticompetitive awareness, however, many will question how a move towards "four pillars" within the telco space can be monitored to ensure the longevity of competition.

McIver said the federal government is unlikely to get directly involved in the regulation, but will do so by proxy through the Australian Competition and Consumer Commission (ACCC).

"I think the way they'll control it will be by the ACCC. It will really be up to the ACCC to decide whether it's anticompetitive or good for the general populace at the end of the day. I don't think it will get to the extent where the government will have to regulate as such," he said.

A spokesperson from the ACCC was unavailable for comment at press time.

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