Local broadband uptake will improve if service providers deliver better pricing and more advanced services, according to analysts at IDC.
Despite these concerns, 13.8 per cent of Australians had a broadband connection by December 2005 -- a significant rise from 7.7 per cent a year earlier.
This equated to 2.9 million broadband subscribers generating $1.9 billion in revenues. IDC predicts 5.9 million subscribers by 2010, with revenues hitting $4 billion.
"Although we are out of the broadband backwater there is still a lot of room for improvement in terms of coverage, offerings and pricing," IDC telecommunications analyst, Shing Quah, said.
The lack of advanced services, she said, could be attributed to large telcos Telstra and Optus being slow to launch VoIP, IPTV and video-on-demand (VoD) services.
This was mainly due to a need to protect existing PSTN revenues.
Advanced offerings were being driven largely by smaller competitors such as iiNet and Primus, which had rolled out ADSL2+ DSLAMs.
"They have been able to offer subscribers within the range of the enabled exchanges downstream speeds of up to 24Mbps as well as plans with high download limits," Quah said.
Fixed wireless access (FWA) providers, Unwired and Personal Broadband Australia, had also improved overall penetration rates by offering services to those in areas without DSL coverage or who did not want fixed-line payments.
"We will see more broadband growth as these FWA providers increase their coverage and migrate onto a WiMax platform," Quah said.