SMB broadband connection hits 77 percent: survey

A snapshot of broadband in the Australian SMB market reveals DSL to be the most popular delivery method of high-speed Internet; users average a monthly spend of $20 to $50 and download less than 5GB of data in that time.

These are just some of a plethora of statistics revealed on Wednesday by ISP Pacific Internet in its annual broadband survey, the Broadband Barometer.

Noticeably, the survey reveals 77 percent of Australian SMBs -- listed as those business with fewer than 200 employees - have a connection to the Internet that is 256Kbps and higher. In contrast, the number of households with broadband is just over 10 percent, significantly less than nations such as Korea and Canada which have take-up rates well over 20 percent.

Dennis Muscat, Pacific Internet managing director, said the discrepancy between business and residential take-up is due to the absence of competition in the residential market until only a couple of years ago, and the tax deductions for SMBs for their broadband connections.

Although the Pacific Internet Broadband Barometer focuses only on SMB, John Kranenburg, chairman of the service providers association SPAN, said lifting residential numbers should be a priority.

"Where old school communications was about providing voice for everyone, broadband should be about enabling multimedia communications," he said.

"We are in a generation where communications should be defined by multimedia. So shouldn't we be aiming for 100 percent [connectivity]?," Kranenburg said.

Business laps up DSL

The Broadband Barometer, which first reported on the state of broadband in Australian small to medium business in 2003, shows dial-up connectivity has dropped from 64 to 27 percent.

"DSL has taken the market by storm. It is the dominant technology," Muscat said. Overall, xDSL technologies account for 58 percent of total subscriptions with cable, which rates as the next high-speed access technology, coming in at 12 percent.

Despite all the talk about wireless Internet, it is yet to make significant inroads. Wireless and satellite services accounted for just 7 percent, largely due to the use of satellite in regional Australia.

The survey, conducted by research firm IDC for Pacific Internet, questioned more than 300 businesses in metropolitan and regional Australia during September. It found many businesses were using residential connections. Just under half of these surveyed spend $20 to $50, while 30 percent spend $51 to $100.

As their business matures, Muscat predicted expenditure would increase as companies paid for additional services such as managed firewalls and security, which is not provided in low-cost plans.

Unlike residential services where there is an insatiable requirement for download space, 71 percent of SMBs download less than 5GB a month. E-mail continues to be the most frequently used Internet application with well over 90 percent of respondents saying it's the main reason for their broadband connection.

Bandwidth-intensive applications, such as videoconferencing (2 percent) and VoIP (1 percent), didn't rate much of a mention prompting Muscat to ask "Where is VoIP?" in light of that technology's constant media spotlight.

"It is not happening in the SMB space. It barely registers. We don't see any sophistication at this stage," Muscat said.

In contrast, the use of broadband for the delivery of hosted services such as CRM and sales applications was around 10 percent, with 21 percent saying they would consider an application service provider in the future. "This is much bigger than in previous surveys. This is a surprise to us," Muscat said.

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