The telecommunications industry is set for another year of consolidation with broadband being portrayed as light at the end of the 'dwindling revenue' tunnel, according to a new survey by Deloitte.
The telco industry had a tough year in 2001 with the collapse of One.Tel and other market rationalisations; 2002 also looks tough with full service carriers (FSC) and mobile operator numbers expected to shrink.
According to Deloitte's Telco Competition and Outlook Survey, respondents (telco carriers and service providers) have tipped that the number of "serious players" will decline in all industry segments, except for ISPs, which will continue to grow.
However, telecommunications analyst Paul Budde has a different viewpoint on how ISPs are going. "ISPs are still declining, lots have fewer than 1000 users. They will have to find another hobby, as they are not in business."
The survey also found that the number of FSCs is expected to fall from four to three, and wireless-cum-mobile carriers will drop from five to three.
As a result of this activity over the next 12 months, 54 per cent of respondents said the industry will require greater regulation as the market shrinks.
"I'm not quite sure of their definition of a FSC, as buying bits and pieces of a network does not make a real telco player," Budde said. "We only have two active operators in the mobile market, Telstra and Optus, and AAPT is rationalising (in the fixed line market)."
However, high expectations are held for broadband in the coming year; in particular aDSL, with 64 per cent of respondents indicating it will be broadly available within 12 months.
Budde said broadband is a growth market for carriers. "Voice and mobile is declining and broadband is really the only growth market.
"There is a new breed of players coming on board with ASP, data centre and broadband services. There have been quite a few, about a dozen new companies, emerge offering broadband services."
Budde, however was critical of Telstra's marketing of broadband in Australia which, in the long run, he said will "stifle" users' move to broadband.
Telstra recently introduced a new 1GB broadband plan structure, but Budde warns this sort of plan will leave many consumers out of pocket.
"When consumers start using broadband for things other than e-mail (like data and video applications) these sort of services would immediately lift a user's usage to 3 or 4GBs."
"Competition is missing in the broadband market and Telstra is dictating the prices. In Europe and the US, there is healthy competition."