Australian businesses are still hesitant to take up broadband Internet, according to statistics released Thursday by the Australian Bureau of Statistics (ABS).

The Business Use of Information Technology report found that, at the end of June 2004, 58 per cent of businesses were still using non-broadband Internet connections, compared to 41 per cent using broadband.

The report found broadband to be more prevalent in large businesses than in smaller ones -- 78 per cent of businesses with more than 100 employees used broadband compared to only 54 per cent of businesses employing between 20 and 99 people.

The most common reason cited by businesses for not using a broadband connection was a lack of perceived benefit to the business. This concern was followed by ongoing costs being too high, and broadband being unavailable in the business location.

Telecommunications analyst Paul Budde is not surprised that business is still not totally embracing broadband.

"There will always be laggers. That is why 90 per cent of small businesses fail," he said.

Budde believes there is no excuse for any Australian business, regardless of size, to not be using broadband as a tool.

"At a minimum, it will deliver a 10 per cent increase in productivity. Even if you run a milk bar, having online ordering facilities to your wholesalers, and a tool to check competitive prices, should be sufficient to make you want to use broadband," he said.

Budde predicts that the next year will see a turnaround, so that by 2006, 80 per cent of businesses will be on broadband and only 20 per cent on dial-up connections.

Although broadband adoption is still a little lagging, the ABS report did note a growth in Internet commerce from the previous year, with Internet income up 37 per cent to $33 billion.

The ABS defines broadband as "always on" Internet faster than 256Kbps. Non-broadband connections include analog dial-up and Integrated Services Digital Network (ISDN).