Telecommunications industry faces disruption

Telecommunications industry faces disruptionNBN chief executive Bill Morrow has warned that Australia’s telecommunications scene will become more fragmented as the national broadband network rolls out.

Mr Morrow said yesterday that the country’s national broadband network, now dominated by Telstra, TPG, Optus and Vocus, which make up close to 90 per cent of market share, will be subject to more competition from super-fast entrants as the NBN is rolled out in metropolitan areas.

And that could start happening next year with the NBN forecasting there will be 5.4 million premises ready for super-fast internet and 2.3 million active premises by the end of the 2017 financial year.

“I think you’re seeing some niche players that will want to enter the market…we’re talking to a lot of them,” Mr Morrow told the Australian Financial Review.

“We often reference the top four who are taking 90 per cent of the share, but that other 10 per cent is growing and you see little companies like Exetel doing quite well, and they’re dead set serious about growing their share as well.”

“It may be that you always you three or four that have the dominant share of the market out there, but if there are people like Woolies or JB Hi-Fi, or any of those others that decide ‘I just want to get in and offer a bit of a niche product and if my barrier to entry to get in to offer than service is low, then I’ll actually be willing to do that’. That just enhances the competition at the retail level and gives end users the benefit of innovation, price competition and of course the choice that suits their needs.”

Mr Morrow’s comments are pertinent at a time when Telstra is repositioning itself as a tech company rather than a telecommunications business and Optus is promoting itself as an entertainment provider of services like EPL and Netflix.

 



Business First is a peer-to-peer magazine: written by CEOs and other high level executives, with interviews with some of the country’s best leaders.


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