We have undertaken this market study at a time of significant change in the Australian communications sector. We noted at the start of the inquiry that the sector is subject to rapid changes in technology, product innovation and consumer preferences as well as major structural change as we transition to the NBN (National Broadband Network). We set out to assess the implications of these trends for the state of competition in the supply of communications services, to examine any identified competition or consumer concerns and to identify actions needed to ensure regulation is responsive to the requirements of the changing communications landscape. This includes ensuring that over the longer-term, innovation and investment are not stifled, competition is encouraged and the interests of consumers are well served.

Evidence of this rapid pace of change is the extent of developments we have witnessed since we released our Draft Report in October 2017. At that time, the NBN rollout was approaching its mid-point and a lot of attention was being directed at consumers’ experience during the migration from legacy services and with the services supplied to them over the NBN. We are encouraged that since that time, there have been a number of actions taken by Government, regulators and industry to address some of the immediate issues of concern about services provided over the NBN identified in our Draft Report.

It is important that the problems that have emerged during the current state of transition of the Australian communications sector are quickly resolved. This is because communications services are the key foundation for the digital transformation of the economy and the productivity, innovation and efficiency gains that it will bring. In addition, they are essential for all Australians to undertake daily activities, including maintaining contact with family and friends, and accessing commercial, government, medical and education services.

The Australian Competition and Consumer Commission (ACCC) uses market studies as a tool to improve our understanding of specific sectors and to help promote effective competition in markets. We undertook this market study to provide a wide-ranging stocktake of how Australian communications markets are evolving in the face of recent and prospective changes.

We have considered the state of competition in the supply of retail communications services to individual, residential and small business consumers and also in the markets for intermediate inputs and other wholesale services. Figure 1.1 depicts a generalised communications supply chain and illustrates the coverage of the market study.

Significant change is affecting how this communications supply chain functions, including the nature and extent of competition in retail and wholesale markets. This change includes both structural reform, as a result of policy initiatives (at the centre of which is the rollout of the NBN) and the rapid pace of technological advancement and product innovation that is occurring globally.

We have taken a five year horizon for considering likely competition and efficiency developments in communications markets. This time period covers the completion of the NBN rollout, the expected initial deployment of 5G wireless technology and settling of the future market structure for the wholesale provision of fixed broadband services as part of NBN Co Limited (NBN Co)’s eventual privatisation.

Reflecting the dynamic nature of communications markets, the period of the study has allowed us to observe developments that have occurred in parallel including those prompted by some of the findings and proposed recommendations in our Draft Report. We recognise that this report captures a snapshot of the communications sector at this point in time and that the markets we have assessed will continue to evolve, sometimes in ways that may not be foreseen. However, we consider that the regulatory tools we have equip us to respond to changing market circumstances, address any market failure, promote competition, and benefit consumers.