Australia's telecommunications companies continue to enjoy a massive tailwind in the form of downloaded data.
In the most recent release from the Australian Bureau of Statistics (ABS), Data downloaded in the three months to the end of June 2015 jumped 21% compared to the official read in the December 2014 quarter. From June 2014 to June 2015, the volume of data downloaded via fixed line broadband soared by 40% to 1,388,697 Terabytes – and those statistics don't even include mobile data.
Fixed line broadband includes DSL, cable, fibre and other fixed line broadband. Wireless data, which includes satellite, mobile wireless via a data card, dongle, USB modem or tablet SIM card accounts for just 3% of broadband downloads.
Mobile data downloads still lag far behind fixed line but are increasing at an even faster rate. Mobile handsets downloaded 71,572 Terabytes of data in the three months to June 2015, up 36% compared to the December quarter. As the ABS puts it, that's the equivalent of 1.1 Gigabytes of data downloaded by each of Australia's 21 million mobile handset subscribers each month.
And that also doesn't include data that doesn't contribute to data download allowances. An example includes watching Foxtel on tablet or computer or Bigpond movies via the internet on a Telstra plan. Netflix is also included in some plans offered by Australian internet service providers (ISPs).
This is continued good news for companies like Vocus Communications Limited (ASX: VOC), TPG Telecom Ltd (ASX: TPM) and Telstra Corporation Ltd (ASX: TLS), which provide a large portion of the back end fibre networks connecting Australians to the internet. They aren't alone in benefitting of course. All of Australia's ISPs like Optus, M2 Group Ltd (ASX: MTU) – which owns Dodo and iPrimus will also benefit, with consumers likely to be upgrading plans and taking out higher usage plans.
The arrival of subscription video on demand (SVOD) giant Netflix in Australia in March and the launch of rivals Presto and Stan may have much to do with that. Presto is a joint venture between Seven West Media Ltd (ASX: SWM) and pay television group Foxtel, while Stan was launched by Nine Entertainment Co Holdings Ltd (ASX: NEC) and Fairfax Media Limited (ASX: FXJ). But Presto and Stan are struggling against Netflix, and local SVOD player Quickflix Ltd (ASX: QFX) shares have been suspended from trading, run over by the Netflix juggernaut, while Ezyflix has collapsed. My colleague warned investors about Quickflix back in 2012 here.
Various ISPs reported that since March, data traffic has surged enormously.
Foolish takeaway
Global networking giant Cisco forecast earlier this year that mobile internet traffic is expected to grow at a compound rate of 57% each year between 2014 and 2019. Looks like the good times are set to continue for Australian telcos.
