NBN Co and Telstra will broker a deal but no active fibre-to-the-premises connections will be made in 2010,
according to analyst firm IDC. Outlining IDC’s ‘top ten’ predictions for the coming year, telecommunications
program manager David Cannon pointed to a “stable recovery” for the industry in 2010 – and also predicted
the death of the video store as IPTV and video on demand services launch throughout the year.

Cannon told CommsDay that IDC expects Telstra and the federal government to strike a “win-win” deal
regarding the national broadband network – but said the deal will likely disrupt NBN Co’s initial planning.

“Once a deal is done, it changes how they’re going to architect things,” he said, expecting NBN Co to
change its rollout plans as Telstra agrees to shut down its copper network. “That planning stage is going to
delay the rollout of that network until this time next year, but the good thing about that is the actual delivery
of the network will happen faster as a result of the delay.”

“The NBN is the best thing that could happen to Telstra shareholders in the last five years,” Cannon said.
“The thinking behind that is essentially the biggest inhibitor to Telstra’s share price is regulatory exposure. The business is sound, but the share price should definitely be much higher than it is now... it’s hamstrung by regulatory uncertainty.”

“You can actually get rid of the biggest costs [copper network opex] and enable next-generation service delivery, and at the same time get rid of regulatory uncertainty,” he said.

On the mobile side, IDC predicts mobile broadband subscriber growth will actually decline, despite a report from the Australian Communications and Media Authority which noted a 162% surge in wireless broadband services during 2009. “Mobile broadband is a market that can still be growing,” Cannon said, “[But the] heyday of last two years is over... the growth rate is now going to taper off.”

IDC also predicted that demand for mobile video would halt in 2010. “Mobile video calling had an opportunity a few years back, but because it was priced so high no one could justify it and it was problematic from a quality perspective. It’s the same thing with mobile video services... [operators] had the opportunity to do something, but it was pricey, content was ho-hum and people are savvy now in side-loading content from [their] PC.”

Despite the expected flop of mobile video service, the converged mobile device market is still expected to surge. “The mobile device market, and particularly converged devices remained immune to the GFC, continuing to grow throughout 2009, this will further intensify in 2010 as device vendors race to curb the influx of iPhones and scramble for market share,” added IDC telecoms market analyst Mark Novosel.

Luke Coleman