ACCC issues third telecommunications market indicator and infrastructure reports
The Australian Competition and Consumer Commission today issued its third report on Telecommunications market indicators and its third report on Telecommunications Infrastructure.
The market indicators report contains selected revenue, usage and market share data concerning fixed-line voice and mobile telecommunications services for 2003-04 for the five largest service providers. Data from 2001-02 and 2002-03 is presented for comparison. The market indicators report has been compiled from information provided under the Regulatory Accounting Framework.
"The regular public disclosure of information in the market indicator report continues to improve the integrity and transparency of the information provided by carriers, and assists the ACCC in effectively administering the telecommunications provisions of the Trade Practices Act 1974", an ACCC Commissioner, Mr Ed Willett, said today.
The market indicators report notes that fixed-line voice markets continued to grow in 2003-04, with total market revenue increasing by 3.5 per cent to $9.4 billion. In 2002-03, the market had grown by 1.3 per cent. This has largely been driven by increases in total revenues for line rental and fixed-to-mobile calls, which grew by 11.5 per cent and 5.8 per cent respectively in 2003-04. These growing services have offset decreases in revenues for local, domestic long-distance and international calls. The market for mobile services grew more quickly than the market for fixed-line services during 2003-04, with total mobiles market revenue increasing by 6.3 per cent to around $6.9 billion.
The reported market share data for the period covered by the report—2001-02 to 2003-04—has on the whole remained stable, with Telstra remaining the dominant carrier in the fixed line voice market. Telstra earned 75 per cent of total fixed line voice revenues in 2003-04, compared to 79 per cent in 2001-02. Its market share was higher in basic line rental (where it had 82 per cent of the market).
In the mobile services market, in 2003-04 Telstra earned 48 per cent of revenue, compared to 35 per cent for Optus and 15 per cent for Vodafone. In comparison, those carriers had 52 per cent, 25 per cent and 19 per cent of the market respectively in 2001-02.
"While market shares are only one indicator of the level of competition for telecommunications services, the observed trend in market share data does not provide evidence of aggressive competitive behaviour in markets for fixed-line voice and mobile services in the period from 2001-02 to 2003-04", Mr Willett said.
The telecommunications infrastructure report also relates to the 2003-04 financial year and is compiled largely from survey data that has been supplied by carriers.
During 2003-04, more than $2.5 billion was invested in telecommunications infrastructure. Investment in mobile network infrastructure accounted for almost half of this amount (44 per cent), followed by local access networks (35 per cent), transmission networks (14 per cent), xDSL services (6 per cent) and ISDN services (2 per cent).
"Investment in telecommunication infrastructure tends to be cyclical and as a result it is difficult to draw conclusions based upon annual trends", Mr Willett said. "It can however be noted that in 2004 Telstra continued to invest significantly more than other carriers, and that carriers are continuing to invest in infrastructure used to supply fixed-line—PSTN, ISDN and xDSL—services, as well as infrastructure used to supply mobile services".
Carrier investment plans indicate the likelihood of increasing investment in 2004-05, in particular, in xDSL infrastructure.
The ACCC is responsible for overseeing the development of a competitive telecommunications industry within Australia. Under Parts XIB and XIC of the Trade Practices Act 1974, the ACCC is particularly responsible for prevention of anti-competitive conduct in telecommunications markets and administration of the telecommunications-specific access regime.
In performing its functions under Parts XIB and XIC of the Act, the ACCC regularly relies on information obtained from carriers under its record-keeping rule powers.
The record-keeping rule powers have been used to develop the Telecommunications Industry Regulatory Accounting Framework, or RAF. The RAF details financial reporting requirements that apply to carriers or carriage service providers notified by the ACCC (currently Telstra, Optus, Vodafone, AAPT and Primus). The RAF also specifies what records are kept, how reports are prepared and when these reports should be provided to the ACCC.
It should be noted that, as the RAF relates only to the five largest service providers, the market indicator report only contains data from those five carriers and does not provide a comprehensive overview of market shares and competition in the entire market.
Sections 151BUA, BUB and BUC of the Act provide for the ACCC to disclose record-keeping rule information to the public or to specific persons under certain conditions. In January 2003, the ACCC issued principles explaining how the ACCC proposed to exercise its discretion to publicly release record-keeping rule information. It has since released market indicator reports for the 2001-02 and 2002-03 financial years.
The ACCC also collects annual survey data from licensed carriers concerning investment in telecommunications infrastructure. While participation in the survey is voluntary, tier 1 and the majority of tier 2 carriers have chosen to participate.
