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ACMA Research: Mobile Network Broadband - December 2010
 

ACMA Research: Mobile Network Broadband - December 2010

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This report explores current mobile network broadband trends in Australia. It comments on recent developments in the supply of mobile network broadband, the current service offerings and consumers’ ...

This report explores current mobile network broadband trends in Australia. It comments on recent developments in the supply of mobile network broadband, the current service offerings and consumers’ adoption and use of mobile network broadband.

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    ACMA Research: Mobile Network Broadband - December 2010 ACMA Research: Mobile Network Broadband - December 2010 Document Transcript

    • Mobile network broadbandDecember 2010
    • Canberra Melbourne SydneyPurple Building Level 44 Level 15 Tower 1Benjamin Offices Melbourne Central Tower Darling ParkChan Street 360 Elizabeth Street 201 Sussex StreetBelconnen ACT Melbourne VIC Sydney NSWPO Box 78 PO Box 13112 PO Box Q500Belconnen ACT 2616 Law Courts Queen Victoria Building Melbourne VIC 8010 NSW 1230T +61 2 6219 5555 T +61 3 9963 6800 T +61 2 9334 7700F +61 2 6219 5353 F +61 3 9963 6899 1800 226 667 F +61 2 9334 7799© Commonwealth of Australia2010This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproducedby any process without prior written permission from the Commonwealth. Requests and inquiries concerning reproductionand rights should be addressed to the Manager, Communications and Publishing, Australian Communications and Media Authority,PO Box 13112 Law Courts, Melbourne Vic 8010.Published by the Australian Communications and Media Authority
    • Contents Introduction 1  Summary 3  What is mobile network broadband? 5  Developments in the Australian mobile network broadband market 7  Take-up of mobile network broadband 16  Methodology 24   acma | iii
    • Introduction Mobile networks are playing an increasingly important role in the provision ofbroadband access in Australia. This report provides a snapshot of the mobilenetwork broadband market which is one component of broader Australianbroadband market.The Australian Communications and Media Authority (the ACMA), as an agencywith regulatory responsibility for the communications sector, has an ongoing rolein monitoring and reporting on developments in this market. This report is part ofa series of strategic research projects, outlined in Research at the ACMA - ResearchProgram Overview 2010-11.1The ACMA undertakes research into Australians’ use of, and participation incommunications and media to understand the broader changes occurring in theevolving and converging communications and media environment. Structural andtechnological changes to the Australian communications landscape, as well aschanging service use and preferences by consumers, place pressure on the currentregulatory arrangements. This research assists the ACMA to identify transitionpaths for the regulation that the ACMA administers, as well as informing thedevelopment of regulation of existing and new platforms and services in aconverging communications environment.Consumers now have greater choice in terms of networks, devices and servicesthan ever before. The continued rollout of alternative infrastructure, in particularwireless broadband networks, has enabled the expansion of new mobile serviceofferings to consumers and alternatives to traditional communications.This report explores current mobile network broadband trends in Australia. Itcomments on recent developments in the supply of mobile network broadband,the current service offerings and consumers’ adoption and use of mobile networkbroadband.Information used in this report has been sourced from research commissioned bythe ACMA (CATI telephone interviews by Taverner Research), the ABS, industryanalyst and other research reports and industry websites – refer Methodology.1 http://www.acma.gov.au/WEB/STANDARD/pc=PC_311301 acma | 1
    • Any comments on this report are welcomed and can be sent toindustry.reporting@acma.gov.au or to the address below.Manager, Communications Analysis SectionAustralian Communications and Media AuthorityPO Box 13112Law CourtsMelbourne VIC 80102 | acma
    • Summary Mobile network broadband is emerging as an important method of provision ofbroadband services to Australian consumers. The take-up of mobile networkbroadband services (which is defined in this report to include mobile wirelessbroadband and mobile handset broadband) has grown significantly over the pasttwo years.According to the Australian Bureau of Statistics (ABS), there was a 71 per centincrease in the number of mobile wireless broadband subscribers between June2009 and June 2010.2 Data also indicates the number of fixed-broadbandsubscribers (DSL connections) remained fairly steady over the same period,suggesting that mobile wireless broadband is growing in importance as acomplementary broadband service.Depending on consumer circumstances, preferences and the complexity of internetaccess needs, the mobility offered by mobile wireless broadband is an attractivefeature of this type of broadband connection. As a result, this may appeal toconsumers without a previous internet connection and to fixed broadbandsubscribers - some who may use it as a complementary service, others who mayuse it as a substitute service.There are a number of factors which demonstrate the complementary nature ofmobile network broadband to fixed broadband connections. Fixed broadbandconnections have the advantages of higher peak download speeds; in most cases,no additional usage charges if the consumer stays under their data allowance;larger download capacity compared to mobile network broadband; and cheapercost per megabyte of data.Some characteristics of mobile network broadband services such as smallerdownload capacity and pricing options at this stage do not appear as competitiveas those for fixed broadband services. In June 2010, the ABS reported that 91 percent of all data downloaded over non-dial-up internet services was done using afixed broadband service.32 This figure excludes mobile handset broadband access.3 ABS, 8153.0–Internet Activity, Australia, June 2010 acma | 3
    • Consumer data relating to mobile network broadband usage was collected by theACMA in April 2009 and again in April 2010. The data shows that in April 2010, ofthose Australian household consumers 18 years and over with a mobile handset,64 per cent had a 3G mobile handset. This is a nine percentage point increasesince April 2009. Increasing take-up of 3G mobile phones is an importantdevelopment, as 3G handsets enable consumers to access mobile handsetbroadband services. Thirty-two per cent of 3G mobile phone users in April 2009accessed the internet directly via their handset during the previous six months, withthis figure increasing to 40 per cent in April 2010. As consumers continue toupgrade their mobile handsets it is anticipated that use of mobile handsetbroadband will continue to grow.A number of factors are expected to have contributed to the increase in take-up ofmobile network broadband services including:  developments in mobile technology  an increasing range of products and services offered by network providers  improvements in mobile network coverage  improvements in data rates.The mobile industry has also made changes to payment and pricing options formobile wireless broadband and mobile handset data plans, further increasing theattractiveness of mobile network broadband to consumers.This report has also found that mobile data is becoming an increasingly importantcontributor to the revenue base of mobile carriers, with major mobile carriersreporting nearly a third of their revenue as being derived from data services.4 | acma
    • What is mobile networkbroadband?In this report mobile network broadband refers to the provision of broadbandinternet services to consumers using 3G mobile networks.This report considers two main means of accessing mobile network broadband: > mobile wireless broadband, which refers to broadband accessed via a laptop or PC via a USB modem, USB dongle, data card or a tablet > mobile handset broadband, which refers to broadband accessed on a mobile phone handset or device such as a smartphoneFixed broadband services are provided via fixed line (ADSL, optical fibre cable),satellite or fixed wireless technology.4 These services are not covered in this reportin any depth.In the Australian market there are six options for accessing mobile networkbroadband services:> USB dongles, modems or sticks which plug into the USB connection on a laptop, PC or mobile router> mobile data cards, which plug into a PC card slot> laptops with integrated modems> tablet devices such as the Apple iPad> mobile handsets acting as a modem for a laptop or PC> mobile handsets capable of directly accessing the internet for example the Apple iPhone or Research in Motion (RIM) BlackberryUSB dongles, USB modems or sticks and mobile data cards generally contain themodem’s installation software, making installation a simple process for consumers.4 While this service uses wireless technology, it is more akin to a fixed service which provides datacapability in a fixed location, for example WiFi. acma | 5
    • Figure 1 Examples of USB modems or sticks, dongles and data cards supplied in AustraliaUSB modems USB dongle Data card6 | acma
    • Developments in the Australianmobile network broadbandmarketThis section explores how mobile network broadband is supplied to consumers. Itfocuses on developments in technology and in the products and services offeredby broadband service providers, which appear to be changing the way consumersaccess the internet.Mobile network coverageIn recent years, mobile carriers have expanded their network coverage for mobiletelephony and data delivery. All 3G networks in Australia—Telstra, Optus andVodafone Hutchison Australia (VHA) (which operates the Vodafone and 3 brands)—operate the high-speed packet access (HSPA) protocol.Telstra’s 3G network is claimed to provide coverage to 99 per cent of theAustralian population.5 Optus’ 3G network is claimed to provide coverage to 97 percent of the Australian population, with plans to extend to 98 per cent.6 VHA isclaimed to provide coverage to between 92 and 95 per cent of the Australianpopulation.7Mobile network data ratesMobile carriers have increased data rates of their 3G mobile networks throughvarious upgrade paths, and are expected to continue upgrades that deliver evenfaster data rates to consumers in coming years.HSPA is a performance enhancing protocol suite upgrade that has been applied tomost 3G networks in Australia based on universal mobile telecommunicationssystem (UMTS) wideband code division multiple access (WCDMA) technology. ForHSPA protocols to increase data rates, they must be implemented at the networkbase station and with the population of devices such as mobile phone handsets,laptops and modems. The two component protocols of HSPA, high-speed downlinkpacket access (HSDPA) and high-speed upload packet access (HSUPA), work5 www.telstra.com.au/mobile/networks/coverage/broadband.html.6 SingTel, Q4 and Full Year Financial Results 2009/2010, Management Discussions and Analysis, May2010.7 Vodafone coverage maps, available athttp://www.vodafone.com.au/personal/services/coverage/maps/index.htm acma | 7
    • together to improve spectral efficiency resulting in improved data rates andcapacity. Further detailed information on mobile wireless technologies can befound in the ACMA’s Technology developments in the digital economy report(August 2010).8The publicly advertised theoretical download speeds provided currently by themajor network providers vary as do the technologies used to provide mobilenetwork broadband. The maximum download speeds range from 3.6 Mbit/s up to42 Mbit/s in selected areas recognising that such quoted maxima are notnecessarily indicative of typical download speeds. There are a number of factorsthat affect download speeds including: coverage; location; network congestion;distance from tower; and general network and internet traffic. With such variances,it is difficult to verify the average download speeds of each of the networks.It is important to note that as networks upgrade it will require customers to havecompatible devices and software to take advantage of the increased data ratesprovided by their carrier. For example, USB modem or mobile handsets have fixeddata transmission rates which means that, if the network increases its bandwidthcapabilities, the device will need to be updated or replaced to access the highertransmission rate.It is critical to note that while average speeds and burst speeds are increasing, thespeeds available through the current mobile networks appear to vary significantlyand the typical downstream speeds are generally well below the quoted maximaand highly dependent on the specific situation.8 www.acma.gov.au/WEB/STANDARD/pc=PC_312249.8 | acma
    • As described above, each of the networks offering mobile network broadbandservices have different capabilities. Table 1 provides a snapshot of the majormobile network broadband providers, the technology used to provide mobilenetwork broadband and some examples of resellers for each provider.Table 1 Snapshot of network technology and resellers for mobile network broadband, current atAugust 2010. Network owner Technology used Examples of resellers* Telstra HSPA+ with dual Currently no known resellers carrier technology Optus HSPA Dodo Soul/TPG iPrimus People Telecom Adam Internet VHA HSPA TransACT Crazy John’s GRL Mobile iiNet* This list does not include all Optus and VHA resellers. Source: Publicly available data from company websites and reports. Telstra: www.telstra.com.au/abouttelstra/media-centre/announcements/telstra-launches-worlds-first-hspa-dual-carrier-network.xml accessed 30 August 2010. Optus: www.optus.com.au/aboutoptus/About+Optus/Network+Coverage/Mobile+Broadband+Service+Information, accessed 29 July 2010. VHA: www.three.com.au/cs/ContentServer?c=Page&pagename=Three%2FPage%2FThreeLayout&cid=1221530796538,accessed 30 August 2010 Mobile handset functionalityRecent mobile handset developments have helped to provide a simpler and moreeffective internet browsing experience, enabling consumers to access web contentthat had previously been difficult to navigate on the smaller screen of mobiledevices.Driving these developments are smartphones—mobile devices that have the abilityto access content, services and applications via the internet. Mobile handsetbroadband functionality is a fundamental component of smartphone design andarguably as important as the voice call function. Smartphone devices at theforefront of these developments include the Apple iPhone, the Research in Motion(RIM) BlackBerry and a range of Android smartphones using the Google Android acma | 9
    • operating system. Apple’s launch of the iPad in 2010 has created a newcompetitive market in tablet devices. Apple reported sales in excess of three millionunits in the quarter following launch of the iPad.9 It is important to note thattablet devices such as the Apple iPad do not have voice call functionality.With their increased processing power and memory, smartphones have also givenconsumers greater ability to access applications (or apps). Apps are softwareprograms that are downloaded and installed to perform specific tasks on a mobiledevice. Consumers require a mobile handset broadband connection to downloadapps (although some handsets may feature pre-installed applications). Certain appsrequire a mobile handset broadband connection to retrieve data in order toperform their functions. As of June 2010, Apple reported more than 200,000 appswere available for use with its devices.10 Competitors in this sector are encouragingapplication development and this is occurring at a rapid pace.Other features of mobile handsets that have helped to improve the user experienceand drive the demand for mobile handset broadband include touchscreens,QWERTY keyboards, global positioning system (GPS) capabilities and cameras.These features have extended the utility of mobile handsets and helped thembecome multi-functional devices rather than simply a telephony device. Theintroduction of touchscreens and QWERTY keyboards has enabled consumers torespond to email messages using a traditional keyboard format. GPS capabilities inhandsets provide extensive opportunities for application developers to exploitlocation-based opportunities, while cameras in handsets make it possible forconsumers to upload picture and video content immediately to the internet. Theability to play music, whether streamed or downloaded, on handsets also drivesdemand for mobile handset broadband.9 Apple third quarter 2010 results: www.apple.com/pr/library/2010/07/20results.html.10 www.apple.com/pr/library/2010/09/09statement.html.10 | acma
    • Figure 2 shows the range of functions now available on mobile handsets and theuse of these functions by consumers aged 16 years and over.Figure 2 Mobile device functions and useSource: Nielsen, The Australian Internet & Technology Report, February 2010. Note: question did not include the use of voiceservices. acma | 11
    • Developments in service offerings by mobile networkbroadband service providersMobile wireless broadband payment optionsConsumers can access mobile wireless broadband services through pre-paid orpost-paid plans. Pre-paid plans generally require the customer to pay upfront forthe USB modem, dongle or data card which provides access to the network, andthen make periodic upfront payments for a certain volume of data. When the datalimit is reached, the broadband service will stop. Typically, pre-paid plans requirethe consumer to use the data within a set period, for example 15 days, 30 days, 60days or even up to 12 months.Post-paid plans typically require the customer to sign up to a monthly expenditurecommitment for a period of 12 or 24 months, which provides access to a specifiedvolume of data per month. Additional charges at higher rates are applied if thecustomer exceeds their data allowance. To overcome the concerns of someconsumers about excess data charges on post-paid plans, some carriers andresellers have introduced ‘shaping’ of data speeds (the reduction of data rateswhen the download quota for the plan’s billing period has been exceeded), ratherthan charging for excess data usage, to reduce the risk or quantum of excess datacharges to their customers. Shaping of data speeds is also performed by a numberof providers of fixed broadband services.Mobile wireless broadband pricingThe cost of mobile wireless broadband services has decreased during the last twoyears. At the same time, the availability of 3G mobile network coverage hasimproved and consumer demand for mobile wireless broadband has increased.11The Internet Industry Association’s Broadband Index found the cost of a one Mbit/s(or faster) mobile wireless broadband service providing a data quota of fivegigabytes per month has declined from $49.75 per month to $39 per month forthe six months between 30 March 2009 and 30 September 2009, a fall of 22 percent.12Post-paid plans and pre-paid plans typically offer customers with lower expenditurecommitments a higher unit cost per gigabyte when compared to customers onhigher expenditure plans. For example, a customer on a $29 per month pre-paid11 Internet Industry Association, Venture Consulting/IIA Broadband Index, Ninth Edition (Q3 2009), November 2009, www.iia.net.au/upsidedown.pdf. 12 Internet Industry Association, Venture Consulting/IIA Broadband Index, Ninth Edition (Q3 2009), November 2009, www.iia.net.au/upsidedown.pdf. 12 | acma
    • plan is offered two gigabytes per month at a unit cost of $14.50 per gigabyte,while a customer on a $49 pre-paid plan is offered four gigabytes per month at aunit cost of $12.25 per gigabyte.Mobile handset broadband payment options and pricingChanges to mobile phone payment options are also encouraging consumers toaccess data on mobile phones. Most post-paid and pre-paid payment options noweither include an allocated data allowance or the opportunity to pay for a volumeof data as part of a package.Data usage allowances are now a fundamental component of mobile capped plans.This is a significant development given that 39 per cent of mobile users now use acapped plan payment option.13Alternatively, consumers may opt to pay for data on an ‘as-you-go’ basis, but thistypically charges the consumer a higher cost per megabyte of data than anallocated or up-front purchase option available with both pre-paid and post-paidpayment plans. The ‘as-you-go’ option does present risks to consumers who arenot aware of their data usage and the terms and conditions that apply to thatusage, as they may receive unexpectedly high bills for their data use.With the rapid take-up of mobile wireless and handset broadband data plans, theamount of data included within a price plan by the various networks and resellersand the prices paid for those plans is continually changing.RevenueMobile data is becoming an increasingly important contributor to the revenue baseof mobile carriers. Table 2 outlines the contribution of data to the reportedrevenue of mobile network providers, Telstra, Optus and VHA.13 The ACMA, Mobile capped plans: consumer attitudes and behaviours. May 2010. acma | 13
    • Table 2 Mobile network operator revenue Network owner Time period Revenue from mobile data services Telstra14 1 July 2009 to 30 Jun 2010 Mobile data revenue was $2,470 million, up from $1,934 million. Of this revenue: > mobile wireless broadband (data card) revenue grew by 34.1 per cent to $787 million > mobile handset broadband (non-messaging) revenue was $317 million, up from $263 million > messaging revenue was $499 million, up from $437 million. Optus 15 31 Mar 2009 to 31 Mar Of the $1,184 million mobile communications service 2010 revenue, mobile data revenue accounted for 36 per cent. Non-SMS data accounted for 13 per cent of total service revenue, up from 8.5 per cent the previous year. This includes revenue from premium SMS services. VHA16 31 Dec 2008 to 31 Dec Non-voice revenue increased by 45.9 per cent to 2009 $677.3 million. Non-voice services contributed 36.7 per cent of VHA’s service revenue.Source: Publicly available data from company websites and reports.ResellersResellers purchase wholesale services from mobile carriers and on-sell theseservices under their own brand. Some resellers also own a small amount ofinfrastructure allowing them to provide support services to customers.Since 2008, a number of mobile wireless broadband resellers have commencedoffering broadband services, with most of these services operating on the Optus3G network.17Examples of resellers that sell mobile wireless broadband services over the Optusnetwork include Dodo, TPG, iPrimus, People Telecom and Adam Internet, while14 Telstra Full Year Financial Results 2010, available at www.telstra.com.au/abouttelstra/investor/. 15 SingTel Group Q4 financial results 2010, available at http://info.singtel.com/about-us/investor-relations/financial-results. 16 VHA results include five months of the 3 business and 50 per cent of one month for the merged entity VHA (3 and Vodafone), available at http://clients.weblink.com.au/clients/Hutchison2/article.asp?view=2559862. 17 IDC, Australian Mobile Broadband 2008 Competitive Analysis: Opening the Floodgates, January 2009. 14 | acma
    • TransACT, Crazy John’s, iiNet and GRL Mobile offer mobile wireless broadbandpackages using the VHA network.18 There are currently no known resellers offeringmobile wireless broadband packages over the Telstra network.Most mobile phone resellers offer plans that include a mobile handset broadbanddata component to provide their customers with access to the internet throughtheir handsets. Data allowances are typically smaller for lower spending consumers,and increase as customers’ monthly expenditure commitments increase. Someproviders also allow customers to purchase additional data allowances separatelyto their plan.18 This does not include all Optus and VHA resellers. acma | 15
    • Take-up of mobile networkbroadbandThe use of the internet via mobile networks has been a major factor in the growthof the broadband internet subscriber market in Australia in the last two years.Developments in mobile network coverage, bandwidth and pricing have mademobile network broadband solutions increasingly attractive to consumers.This section examines some of the emerging consumer trends relating to the take-up and use of broadband internet services via mobile networks in Australia.Increasing use of broadband internet via mobilenetworksMobile wireless broadbandThe Australian Bureau of Statistics (ABS) reports that there has been a significantincrease in the number of Australians accessing mobile wireless broadband.According to the ABS, at the end of June 2010 there were 8.77 million non-dial-upinternet subscribers in Australia, of which 3.455 million were mobile wirelessbroadband subscribers. 19 This is an increase of 22 per cent from 2.838 million inDecember 2009 or 71 per cent over the year from June 2009.20Data also indicates there has been little change in the number of DSL connectionsover the same period. This may suggest that mobile wireless broadband is growingin importance for both industry and consumers as a complementary service tofixed-line broadband services.19 ABS, 8153.0–Internet Activity, Australia, June 2010.20 ABS, 8153.0–Internet Activity, Australia, June 2010.16 | acma
    • Figure 3 Number of non-dial-up internet subscribers by technology typeSource: ABS, 8153.0–Internet Activity Survey, June 2010.Depending on consumer circumstances, preferences and the complexity of internetaccess needs, the mobility offered by mobile wireless broadband is an attractivefeature of this type of broadband connection. As a result, this may appeal toconsumers without a previous internet connection and to fixed broadbandsubscribers - some who may use it as a complementary service, others who mayuse it as a substitute service.A complementary service is when a customer maintains communications servicesbut adds service/s that provide additional flexibility. There are a number of factorswhich demonstrate the complementary nature of mobile wireless broadband tofixed broadband connections: > Fixed broadband connections have the advantage of higher download speeds and, in most cases, no additional usage charges if the consumer stays under their data allowance—these features are likely to have been key drivers as to why, historically, consumers have chosen a fixed broadband service as their primary service. However, as discussed earlier, technology developments such as high-speed packet access (HSPA) have improved mobile network data rates, while increasingly competitive pricing acma | 17
    • and payment options for mobile wireless broadband have increased its attractiveness for consumers > Mobile wireless broadband services generally provide smaller download quotas than fixed broadband services—this may potentially explain the order of magnitude difference in data downloaded over fixed and mobile broadband networks, which is discussed later in the report. However, mobile service providers continue to expand data allowances > Many, but not all, mobile wireless broadband plans charge per megabyte for excess usage. Most mobile wireless broadband plans count uploaded and downloaded data towards the limit, while most fixed broadband plans do not.However, there may be consumers that choose to substitute their fixed broadbandservice for a mobile wireless service. A substitute service, in this context, is whereconsumers completely replace one communications service type for another servicetype that offers a comparable function, for example, replacing a fixed broadbandservice with a mobile wireless broadband service. There may be a number ofreasons for substitution, including: > the advantage of avoiding fixed-line rental costs (although it should also be noted that line rental costs can to a certain degree be avoided, e.g. by taking up a ‘naked DSL’ service); > the mobility of mobile network broadband, in terms of not requiring disconnection and reconnection processes, fees and delays; > the requirement for a single broadband connection only; > the complexity and required data rate being comparatively low, and > a consumer may only have one device with which to access broadband internet.18 | acma
    • Table 3 provides a snapshot of the numbers of mobile wireless broadbandcustomers for the mobile carriers Telstra, Optus and VHA. The large increase inmobile wireless broadband is indicative of the increasing significance of theseservices to the business models and revenues of mobile carriers in Australia.Table 3 Mobile network operator mobile wireless broadband customers Network owner December 2008 December 2009 Approximate % change Telstra 828,000 1,325,000 60 per cent Optus 388,000 799,000 106 per cent VHA 288,000 673,000 134 per centSource: Publicly available data from company websites and reports. Note: Network operators have differing definitions of mobile wireless broadband customers. Telstra uses the term wireless broadband to refer to mobile wireless broadband users accessing the internet via data cards. Optus includes customers provisioned with HSPA broadband service on both post-paid and pre-paid plans, excluding data packs attached to voice services. VHA includes customers using mobile wireless broadband cards and USB modems. Mobile handset broadbandAt June 200921, there were approximately 12.28 million 3G mobile handset servicesin operation (SIO) in Australia compared with 8.55 million at June 2008.22 The shiftto 3G mobile services continues to drive developments in the mobile market inAustralia, as evidenced by the latest data published by Optus and Telstra. At theend of March 2010, Optus reported 3.61 million 3G SIO, an increase of nearly7.8 per cent from December 2009, while Telstra reported 7.25 million 3G SIO, anincrease of 14.6 per cent since June 2009. Growth in the number of 3G SIO isimportant as 3G services enable consumers to access the internet via their mobilehandsets. It is expected that the growth in 3G SIO will increase the number ofconsumers accessing the internet from their handset. According to VHA’s annualreport at 31 December 2009, VHA had 717,000 3G SIO that were either a mobilehandset or a handset used as a modem to access the internet.2321 In June 2010, the ABS reported figures relating to the number of mobile handset broadbandsubscribers. The data suggests a rapid increase in the take-up of mobile handset broadband. However,as the method of collecting this data is considered by the ABS to be experimental and it has expressedcaution with its use, it will not be published in this report.22 The ACMA, ACMA Communications report 2008–09. 23 Optus: SingTel Financial results presentation Q4 FY09/10: Year ending 31 March 2010. VHA: 2009 Annual Report .Telstra: 2009/10 Half Year Financial Results. In its 2010 Full Year Financial Results, Telstra did not split 3G and non-3G SIO. acma | 19
    • The increase of 3G SIO reflects increased availability of 3G handsets, particularlysmartphones. In the first quarter of 2009, shipments of smartphones exceededthose of voice centric mobile handsets. The Apple iPhone accounted for 21 percent of Australian smartphone sales during this period.24The ACMA’s consumer research also shows an increasing prevalence of consumeruse of mobile handset broadband services. At April 2009, 55 per cent of Australianhousehold consumers aged 18 years and over with a mobile were estimated tohave a 3G mobile phone, this increased to 64 per cent in April 2010. Thirty-two percent of 3G mobile phone users in the six months to April 2009 accessed theinternet directly via their mobile, while in April 2010 this had increased to almost40 per cent of 3G mobile phone users.Figure 4 Mobile handset broadband take-upSource: ACMA commissioned research. Mobile phone capable of accessing 3G services (April 2009: n=1,305; April 2010: n= 1,468). Accessed the internet on mobile phone (April 2009: n=793; April 2010: n=1,034).24 Access Economics, Economic Contribution of Mobile Telecommunications in Australia, June 2010.20 | acma
    • Online activities undertaken via mobile handset broadbandSurvey data shows that consumers are undertaking a range of activities online via3G mobiles. Browsing and accessing information were the main online activitiesundertaken via 3G mobiles, consistent with the online behaviours undertaken viatraditional devices such as PCs and laptops. Other activities, such as accessingcontent services, are also being undertaken by consumers via their mobile handset.Figure 7 presents activities performed by mobile handset broadband users in thesix months to April 2010.Figure 5 Mobile handset broadband activities, six months to April 2010Source: ACMA commissioned survey, April 2010. n=409. Note: figure includes 3G mobile handset broadband users.Despite developments in mobile wireless broadband and the usability of handsets,some activities remain predominantly confined to devices traditionally used toaccess the internet, such as PCs or laptops. For example, users of mobile handsetbroadband services were less likely to use email over their 3G mobile than internetusers in general (68 per cent compared with 94 per cent respectively).2525 ACMA commissioned survey, April 2010. n=409 and n=1,433. acma | 21
    • Furthermore, while the level of internet e-commerce activities over mobile handsetshas increased from 16 per cent to 26 per cent over a 12-month period26, researchby the ACMA shows that take-up of online mobile transaction activities remainscomparatively low when compared with traditional internet access devices (72 percent of Australian household internet users used the internet for banking or billpayment purposes in the six months to April 2010).27Given the ongoing technological and service innovation occurring in the mobilebroadband market in Australia and internationally, it is likely the scope and volumeof activities undertaken online via mobile handsets will continue to grow. Forexample recent research conducted by the ACMA into mobile payments indicatesawareness and receptiveness to mobile payments and that more advanced formsof mobile payments are now emerging.28 .Volume of data downloadedAs the take-up of mobile network broadband increases, the level of data traffic willincrease on 3G networks. Mobile network broadband will place extra demands onavailable spectrum resources as consumers increasingly seek to utilise a growingrange of mobile applications and access internet content services.While wireless broadband has driven growth in the broadband market in Australiaover several years in terms of number of broadband subscribers, fixed-linebroadband networks still account for the overwhelming majority of datadownloaded in Australia. According to the ABS, 91 per cent of data downloadedfrom a broadband connection was by fixed internet users, in the quarter endingJune 2010. Wireless broadband users (including satellite, fixed wireless, mobilewireless and other wireless broadband—excluding mobile handset users) makes uponly nine per cent of all data downloaded.2926 Nielsen, The Australian Internet & Technology Report, February 2010. 27 ACMA commissioned survey, April 2010. n=409. 28 The ACMA, Community research into attitudes towards the use of mobile payment services, July 2010. Available at http://www.acma.gov.au/WEB/STANDARD/pc=PC_312194. 29 ABS, 8153.0–Internet Activity, Australia, June 2010 22 | acma
    • Figure 6 Volume of data downloaded by internet connection, in ‘000 terabytesSource: ABS, 8153.0–Internet Activity Survey, June 2010. acma | 23
    • Methodology The analysis and commentary in this report draws on the following informationsources:> commissioned research in the form of a survey of consumer attitudes and use of communication services, undertaken in April 2010> previous ACMA research> the Australian Bureau of Statistics> industry analyst reports, and> communications industry information, including websites.Commissioned researchThe ACMA commissioned Taverner Research to examine consumer usage of, andattitudes towards, communication services in Australia.This was a two-phased research program, with the first phase conducted inNovember 2009 and the second conducted in April 2010. This research report citesdata from the second phase of the research program.Features of the research included:> CATI telephone interviews, which were conducted using the representativeness model—randomised, nationally representative calling achieved using random digit dialling (RDD), using ‘mobile user within household with next birthday’ criterion> regional quotas, which were applied to achieve representative state and metropolitan/non-metropolitan sample structure.Fieldwork for the second phase was conducted in April 2010 with a final sample of1,626 respondents aged 18 and over.24 | acma