Australian fixed-line market shrank 2.3% in 2013

The Australian fixed-line telecom services market contracted 2.3% in 2013, due to falling voice revenues and heightened competition in the data market, IDC estimates.

Conventional telecom operators from around the world have been experiencing contracting earnings from the once-core voice services segment and, according to IDC, Australian operators are no exception.

The situation has been worsened by declines in legacy data services and price erosion in the data market - particularly on the corporate side.

“Competition is heightening as telcos are aggressively pursuing market share. In some cases, we have seen contracts discounted upwards of 25% on renewal,” IDC Australia associate market analyst Bradley Murray said.

Macroeconomic factors have led many organisations to slash ICT budgets, leaving telcos competing over a shrinking pool.

These same pressures have lead many CIOs to look to communications technologies that can lower costs, such as switching from conventional voice services to voice over IP (VoIP).

In a statement, IDC said it expects the lower price of bandwidth and better QoS promised by the NBN will entice consumers onto the network as the rollout progresses. “However, the government has some work to get the proposed [technology mix] changes through the Senate, and a drawn-out parliamentary debate will further delay the rollout.”

Looking ahead, IDC said it expects the Australian fixed-line market to decline at a CAGR of 3% over the next five years, falling to $11.3 billion. But the fixed business data and internet access markets will buck this trend, growing at a CAGR of 0.6% and 3.9% respectively over the period.

Image courtesy of Sarah Joy under CC