Internet access

Executive summary

COVID-19 has demonstrated the value of a reliable and nationally deployed NBN network, with a dramatic increase in traffic as a result of people learning and working from home, and an increased use of streaming video and audio services.

Forecasts at a glance

Internet Access (A$ millions)

*2015 - 2018 figures have been updated to reflect recently available market information

CAGR 2019-2024 based on gradual recovery trajectory

Internet access market   3.38%

In June 2020, NBN Co completed its nationwide Multi Technology Mix (MTM) wholesale access network deployment, meaning that Australia now has over 99 percent of the population with broadband access. This puts the country in a select group of nations that have virtually all citizens connected with a form of fixed broadband access, whether fibre, terrestrial wireless or satellite. As at September 2020, 7.7 million homes and businesses had been connected to the NBN access network through a phone and internet provider.40

Notwithstanding the disruption and increases in daytime network usage of over 90 percent during the pandemic, based on a pre-COVID-19 baseline,41 the percentage of households with high-speed access continues to climb steadily. However, whilst connectivity has improved, download and upload speeds experienced by consumers are still behind compared to other advanced nations.

Hence, the current technology mix leaves many cohorts of Australians experiencing slower download and upload speeds, and so there is more work to be done in the coming years to close the speed gap between Australia and peer nations, by investing in continuous technology upgrades. NBN Co have recently released its 2021 corporate plan, which outlines plans in bringing forward the next phase of network investment to help meet future demand for higher speed broadband services.42

Deployment of 5G in Australia continues to take shape.

5G is currently being introduced across the country, focusing on cities and CBDs initially, and with handsets in the early stage of uptake. It is expected that the 5G deployment journey will take up to ten years, given the high capital expense involved, the range of regions to be covered, and the need for new sites in CBD and suburban areas.

Australia held an auction for 3.6GHz spectrum for 5G in December 2018 with Telstra, Vodafone/TPG, Optus and Dense Air winning spectrum blocks. The government plans to sell spectrum at 26GHz for wireless broadband services, including 5G, in early 2021.43

Federal and State Governments are focused on increased coverage and capacity in areas where coverage is still limited - for example in New South Wales, Queensland and Victoria - to cover blackspots but also to enhance rural and regional coverage.

Some states are pursuing funding strategies to enhance regional connectivity, to empower local communities and small and medium-sized businesses. For example, as part of the Regional Digital Connectivity program, the NSW Government has committed $100m to "deliver a metro-level internet service to regional communities and businesses, with improved price, quality of service and speed", known as the Gig State project.44 This is part of a wider $400m programme to improve regional mobile connectivity in the state. These programs complement federal programs to connect mobile blackspots, and also target areas prone to bushfires and other natural disasters, to ensure greater resilience of communications in times of need.

Australia's geography and dispersed population will continue to present significant challenges to high speed broadband development. However, given new technologies, business and funding models, there is tremendous scope to bring accelerated digitisation to Australia's regions, as well as a wider range of customer choice. These challenges are gradually being addressed on both fixed broadband and mobile broadband fronts, and ongoing industry development is needed to accelerate network deployment and site acquisition.

Follow PwC Australia