Demand drives local telco growth

SEVERAL Western Australian-based firms are playing a key role in the development of the State’s telecommunications industry on the back of increased consumer demand.

This comes as the number of telecommunications firms continues to grow in a market where the range of lower cost services is expanding.

And despite ongoing industry consolidation, Information Communications Technology analyst Paul Budde said that, while Telstra accounted for about 98 per cent of the market in Western Australia, “there is now slowly a business case for people to have there own infrastructure”.

Mr Budde said companies such as Amcom, Bright Telecommunications and iiNet had an important role to play in that transition.

“The trend is that companies such as Amcom are surviving and companies like IP1 and NextGen didn’t,” he said.

“These were companies that were 50 times bigger [than Amcom].

“However, it is a very clear that companies like Amcom and Bright are very well placed.

“Companies such as iiNet are much more exciting to look at. WA should be very excited that they are doing so well.

“Bright will have a big impact in the market in WA.

“When fibre is to the home, they will quantum leap Telstra. You will then get access to a lot of extra services, such as video.”

Mr Budde said broadband revenues would double in 2004 to $750 million in Australia. He also estimated the value of telecommunications services in WA to be worth $250 million each year, out of a total $30 billion Australia wide.

Add to that the value of infrastructure and those figures increased to $350 million and $38 billion respectively, Mr Budde said.

Chime Communications CEO Stephen Dalby said that part of the current growth could be attributed to “churn” – where customers moved between carriers in the industry – but that a lot of the growth was genuine new business.

“There are more customers out there than there were two years ago,” he said.

“From our perspective we have recorded significant growth over the last 12 months.

“We have increased the size of our network to support more users because the industry is growing and the demand is increasing.

“We are doing well, we are getting our share of the growth.”

Australian Communication Authority figures confirm the trend, with $48.1 million reported by WA-based carriers as their eligible revenue in the 2002-2003 financial year.

That figure is an increase from around $34.8 million in 2001-02, which was up from around $17 million in 2000-01.

ACA spokesman Mark McGregor said that, across the nation, revenues and the number of carriers was on the rise.

“Eligible revenue has gone up in most years since the regime started in 1997-98,” he said. “From 1997 the number of carriers has gone up, but there has been some consolidation.

“There have been more opportunities in the space.”

The ACA requires that all holders of a telecommunications carrier licence lodge their Eligible Revenue with the authority each financial year.

Eligible revenue is calculated as the gross sales revenue of the carrier less a series of revenue and expense deductions.

Eligible revenue is a key concept in the operation of the universal service regime and determines how much each carrier must contribute to the universal service obligation subsidy and digital data service cost.

Contributions are proportional to each participating carrier’s share of total eligible revenue.