The Australian telecoms market will grow a paltry 2.8 percent in the 2008 financial year to $36.3 billion driven largely by broadband and data services.
This is a further drop from the 3.1 percent growth expected this financial year, according to independent research consultancy, BuddeComm.
Managing director of the research firm, Paul Budde, said the big winner is data.
The data services market including broadband is forecast to jump 11 percent for the 2008 fiscal year, from $6.15 billion to about $6.82 billion.
On the other hand the mobile market can expect a more modest four percent increase reaching $12.12 billion. This represents a one percent fall on the previous year and is significantly less than the 11 percent growth rates for both the 2004 and 2005 fiscal years.
"The data market has taken over as the main driver of growth. Given its overall market share in 2006 of 16.8 percent is still relatively small, its impact on the total market figure is only moderate," Budde said.
"This will progressively pick up over the next five years to 2011."
Dampening overall growth for 2008 is the fixed voice segment which Budde claims will slip by three percent from $12.03 billion to $11.67 billion.
"This comes on the back of an estimated two percent drop this financial year," he added.
The Voice over Internet Protocol market (VoIP) is projected to expand tenfold in both users and revenue over the next five years.
Budde said there will be a surge in users during 2008 with more than one million by the end of next year, half will be paid subscribers.
He said the number of VoIP users is tipped to reach one million by 2010.
Meanwhile, the number of broadband customers will pass five million by the end of next year, up another million on the previous year.
At the same time, Budde said broadband's share of the total market will rise from 18.1 percent this calendar year to 19.6 percent.
"Voice and mobile will still hold about a third share each of the market," Budde added.
The quick takeup of broadband has also seen a switch from dial-up, with 80 percent of all Internet users making the shift to broadband by 2008, up from 58 percent two years ago.
The report also warns future growth and market developments will depend heavily on a range of competing factors, such as the result of the federal election, ongoing regulatory reviews, recommendations from the government's Expert Panel, how the OPEL consortium unfolds and Telstra's willingness to play ball with industry.
Budde said other key findings include more fixed-wireless alliances, such as the partnering of Soul, Austar and Unwired, as the triple play models evolve, and IPTV will continue to struggle in the absence of a killer business model.
The BuddeComm report said Telstra still dominates with 44 percent market share at retail value, 70 percent at wholesale and 95 percent of profits.
Finally, he said the future of broadband video lies in personal video communication, especially user generated content and social networking, such as YouTube and MySpace.