Broadband Barometer finds SMEs prefer consumer plans

Many Australian small businesses still use consumer broadband products instead of business plans according to the second installment of the Pacific Internet Broadband Barometer that was recently unveiled.

The report found that metropolitan small business broadband connections increased four per cent during the July-October quarter, up from 41 per cent or 206,780 in June to 45 per cent or 236,000. Broadband connections in non-metropolitan regions however, only increased 2 per cent. Pacific Internet managing director Dennis Muscat, said a key trend was the continued use of products aimed at the residential market by small business.

“Forty-two per cent of broadband-enabled small businesses use a product aimed at the residential market,” he said. “This is significant as it highlights cost as a determining factor in small business’ choice of broadband products over performance guarantees.”

Despite the growth in broadband adoption, the new survey highlights a growing digital divide, with metropolitan small businesses recording significantly stronger broadband growth than small businesses in non-metropolitan regions. Broadband penetration in metropolitan areas is now at 53 per cent, compared to 20 per cent for non-metropolitan regions, the report found.

The second quarterly study – carried out by Pacific Internet in conjunction with ACNielsen.Consult – also found that interest in broadband remains strong, with 47 per cent of narrow-band businesses intending to get broadband within the next 12 months.

According to the report, 42 per cent of broadband connections sold in Australia have been to small businesses.

Muscat said that while the overall small business take-up rate has improved from last quarter, the focus is now required on boosting regional broadband connections.

After the first Broadband Barometer, which ended June 2003, Muscat told ARN the major concern of the report was lack of broadband take-up in regional areas. “There is no infrastructure available and resellers are not expanding into regional Australia because of the high costs involved,” he claimed. "There is a lack of investment in regional areas.”

The latest report has outlined reported that ADSL in particular, is leading the growth and is the preferred broadband technology among small businesses of all sizes.

The adoption of cable is also continuing to grow with levels now reaching 16 per cent.

Internet penetration into the small business sector increased by 2 per cent during the July to October quarter and 79 per cent of Australian small businesses are now connected to the Internet, according to the study.

Small businesses are retaining dial-up services. However, Muscat said small businesses use both dial-up and broadband. “Small businesses are keeping dial-up connections due to concerns over reliability of broadband services,” he said.

Among the narrow-band businesses, cost, availability, lack of knowledge about broadband and contentment with dial-up Internet access, were cited as reasons against migrating to broadband.

The October Broadband Barometer also found that security technologies such as spam, virus filters and firewalls are highly valued, but broadband-enabled technologies such as video conferencing, public wireless Internet hotspots and Voice over Internet Protocol (VoIP) are not valued yet by small business.

The October report was based on a survey of 617 Internet-enabled small businesses (50 employees or less) from metropolitan and regional areas around Australia.

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