Competition 'Heats Up' Between Australia's Big Three Carriers

Jun 29, 2015 — Allan Pulga

Last month (May 18), the Sydney Morning Herald's David Ramli wrote about Optus' plans for a "hard nosed" review of its 160 retail stores in order to keep costs down.

"Optus is fighting hard to find savings while spending big to avoid becoming a permanent also-ran in the telecommunications industry," he wrote.

"Telstra has continued to dominate the market while smaller players such as iiNet and TPG Telecom are merging to create new sector giants that could topple Optus from its position as Australia's second-largest phone and internet provider."

Singtel-Optus CEO Allen Lew (pictured above) said one means of reducing costs would be to offer more customer support online versus over the phone.

Optus looks to cut costs; Vodafone is said to be vulnerable without fixed-line business; Telstra will begin reselling wholesale service to MVNOs in 2016.

Meanwhile, Australia's number-three carrier, Vodafone, is at a disadvatange to its rivals due to its "mobile-only" strategy, wrote BuddeComm group analyst Henry Lancaster (May 20).

"Without a fixed-line network in Australia, VHA cannot hope to capitalise on customer attraction to bundled services," wrote Lancaster. "Optus and Telstra both have extensive fixed-line infrastructure, and both are well positioned to exploit the efforts of NBN Co to extend the reach, and capabilities, of copper."

Lancaster speculates that if Vodafone does not enter the fixed-line business, "the larger fixed-line players, in an increasingly consolidated market, will try to acquire Vodafone itself," thereby creating a Big Three of "quad players" (mobile phone, landline phone, cable TV and cable Internet) with national reach.

Finally, on May 29, SMH's Ramli wrote of competition "heating up" between Australia's Big Three mobile carriers as they attempt to woo the business of the nation's 2.9 million customers not currently with a Big Three carrier. One way they hope to do that is via MVNOs like Amaysim or TPG Telecom, which use the Big Three's networks in order to provide service.

Optus is the main provider of mobile service to MVNOs, while Vodafone cut its wholesale sales to consolidate its network. Telstra does not offer 4G services, but will start reselling them in 2016. Vodafone has also expressed interest in getting back in the wholesale market.

"It will become more competitive," said Vodafone Australia CFO James Marsh. "The market changed very quickly and we may have been a bit slow in reacting [in both allowances and price changes] and I think everyone has seen data volumes increase but I think we're reacting reasonably quickly now."

Topics: Wireless Trends, Mobile Industry

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