Broadband services to drive Australia and India fixed communications

Research finds vast geographies no limitation to seeing growth in fixed broadband markets, with particular strength in fibre-to-the-home and business roll-outs

Two studies from GlobalData have found that massive distance is no massive impediment to the fixed communication services industries in Australia or India, with the former’s market to grow to $8.3bn by 2027 and revenue in India to grow at 6.4% compound annual growth rate (CAGR) between 2022 and 2027.

GlobalData’s Australia Fixed Communication Forecast Model (Q1 2023) predicts the fixed communications market in Australia will see steady growth, with a projected CAGR of 0.7% from 2022 to 2027. Even though it expects a decline in fixed voice revenues, this looks to be offset by a rise in fixed broadband service revenues, which are anticipated to drive the overall fixed communications market.

The study also indicates a 3.4% CAGR decline in fixed voice service revenue between 2022 and 2027 due to a drop in overall fixed voice average revenue per user (ARPU) levels.

By contrast, the analysis says fixed broadband service revenue will likely increase at a CAGR of 2.1% over the forecast period, mainly driven by the growth in fibre-to-the-home/business (FTTH/B) subscriptions, on the back of ongoing coverage expansions by the Australian government.

Specifically, a key driver will be the national broadband network (NBN) project. GlobalData noted that in June 2022, NBN made it possible for customers in around 160,000 premises served by fibre-to-the-curb (FTTC) in New South Wales, Victoria and South Australia to upgrade to fibre-to-the-premises (FTTP). In addition, NBN aims to extend the fibre-to-the-node (FTTN) to FTTP network upgrade programme to about 3.5 million premises by the end of 2025.

“Subscribers’ inclination towards mobile and over-the-top-based communication services will also drag down fixed voice revenues over the coming years,” commented GlobalData telecom analyst Srikanth Vaidya. “Fibre lines accounted for a majority 71.5% share of the total fixed broadband lines in 2022, which will increase to about 75.3% in 2027. This growth will be supported by the rising demand for high-speed internet services in the country…

Telstra will lead the fixed voice services market through 2027, in terms of subscriptions, supported by its strong foothold in the VoIP [voice over internet protocol] segment. The operator will also lead the fixed broadband market supported by its focus on fibre network coverage expansion and the promotion of cost-effective multiplay plans at discounted prices.”

Meanwhile, GlobalData is optimistic about India’s fixed broadband services outlook and calculates sector revenue to increase at a CAGR of 7.3% between 2022 and 2027, driven by the solid growth in broadband subscriptions, especially fibre broadband, and increasing broadband ARPU levels.

The study also expects the country’s total fixed communication services revenue to increase at a CAGR of 6.4%, from $10.2bn in 2022 to $13.9bn in 2027, mainly driven by strong growth in the fixed broadband segment.

The India Fixed Communications Forecast (Q1 2023) calculates that fixed voice services revenue will decline at a CAGR of 1% from 2022 to 2027, owing to the drop in circuit switched subscriptions and a decline in fixed voice ARPU levels as users increasingly adopt over-the-top-based communication services, and operators include free voice minutes with their fixed bundled plans.

The study estimates fibre optic lines to hold over 85% of total broadband lines in 2027, supported by government investments in fibre network infrastructure and operators’ FTTH service expansions. As a result, it forecasts fibre optic service revenue to grow at a CAGR of 9.2% between 2022 and 2027.

Reliance Jio is set to lead the country’s fixed broadband services market in terms of subscription share over the forecast period, supported by its strong position in the growing fibre broadband service segment and efforts to upgrade its FTTH network. The operator’s promotional offers on its broadband plans are expected to help the company maintain its leadership in the market over the forecast period.

“Rising demand for high-speed internet services and competitively priced fibre broadband plans from operators with benefits like unlimited internet and access to major subscription video on demand platforms are expected to drive fibre broadband service adoption in India during the forecast period,” added Vaidya.

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