Slow broadband has triple-play two years away

The digital home concept is still at least two years away for most Australians, because of our slow broadband connections.

A new IDC report has revealed that 70 per cent of Australian broadband connections are still only 256Kbps -- far below the speed required for "triple-play" services which provide voice, video and data applications over one single access subscription.

Broadband triple-play models have already been launched in the European market, said IDC research director for telecommunications Landry Fevre.

"In Europe, many competitive carriers launched their content offerings bundled with broadband as a differentiator, which ignited the market," Fevre said.

"Telcos then responded by entering the fray with similar offerings which drove strong adoption and added scale to the game."

Fevre predicted Australia would be at least 24 months behind Europe in entering the market.

He believes slow broadband speeds and a lack of competition are still major barriers.

"Broadband over 3MBps that would allow for triple-play services is still many years away for Australians," he said.

"Yahoo!BB in Japan offers Gigabit speeds to the home and French company IIad provides ADSL2+ 15MBps download speeds. These offerings are a far cry from the mere 256Kbps that about 70 per cent of Australian broadband subscribers 'enjoy' today," he said.

To be competitive in offering triple-play models, providers need to own their own infrastructure, have access to content or a relationship with content providers and have a large enough subscriber base, according to Fevre.

"Optus and, of course, Telstra are the only providers currently positioned to provide triple-play models," said Fevre.

Until Optus starts rolling out models and other players start to appear on the margin, Telstra has no incentive to enter the market, he said.

Telecommunications analyst, Paul Budde, is more optimistic in his prediction that triple-play models will emerge on the Australian market this year.

"[Last year] the regulatory regimes in Europe started to deliver more commercially viable local loop unbundling services. This has resulted in some three million DSL lines in France, Germany and the UK now being ready for triple-play deployment -- and this number will at least quadruple over the next 12 months," he said.

Budde believes Australia is not too far behind, but agrees with Fevre that Telstra will need to enter the market before there is any rapid growth.

However, he believes there are other providers in addition to Telstra and Optus that are ready to enter the market. He pointed to the new merged media and telco company SP Telemedia, "which is expanding rapidly and is very well-positioned to enter the triple-play market."

Spokesperson for Telstra BigPond, Craig Middleton, said less than 10 per cent of Telstra customers had the highest ADSL speed plan, which is 1.5Mbps.

"Offering triple-play models is a commercial decision that would be made at the time we felt the market was ready for it," he said.

Optus has a very similar answer.

"Optus is capable of deploying digital services rapidly should a commercially viable opportunity present itself," said an Optus spokesperson.

"The status of the timing, scale and specifications our DSL network build program remain commercial in confidence. However, we can confirm that any future network will be video enabled," she said.

According to the spokesperson, principal barriers include network capability, with the current broadband plans not supporting video streaming to TV.

"Other barriers have historically related to copyright protection and commercial models," she said.

A report last year by the Australian Communications Authority found consumers were increasingly switching to broadband connections, with the number of non dial-up subscribers having increased by 83.2 per cent in the year to March 2004.

Despite the growth in broadband subscribers, Australia continued to fall behind other Organisation for Economic Co-Operation and Development (OECD) countries in terms of broadband take-up, the report said.