Report cites satellite services slump

Report cites satellite services slump

A slump in satellite broadband uptake has opened a channel for systems integrators to alleviate the costly setups that burden regional ISPs, according to new research from Market Clarity.

The analyst firm's latest report, Positioning Satellite 2006, states that while there are more than 550 ISPs in Australia, only 33 offer retail satellite services, compared to 473 ADSL retailers and 129 fixed wireless broadband providers.

Market Clarity CEO, Shara Evans, said it wasn't the lack of competition driving prices, but the large investment in both time and money needed to setup satellite services.

"At the low end, satellite services are on par with other broadband technologies. It's when we get to higher data allowances that pricing really gets out of whack," she said.

On average, a typical entry-level (500MB data allowance) satellite broadband plan will cost $55 per month. In contrast, cable sits at $54.95 per month, wireless at $40 per month and ADSL at $49.50 per month, according to the Market Clarity's research.

However on a comparable 10GB plan, ADSL remains at the same price point, while satellite jumps to $677.50 per month. This disparity stemmed from a satellite broadband provider's current practice of charging for excessive data download, rather than shaping access speeds.

"The pricing structure is reflective of the wholesale prices ISPs deal with," Evans said. "In order for them to remain in business, they have to add big margins which results in ISPs milking what customers they have for all they're worth, instead of going after volume."

Although government subsidies such as the Higher Bandwidth Incentive Scheme aim to alleviate costs placed on ISPs and consumers, Evans said lack of awareness and education in satellite technology was scaring people away.

"Satellite is a lot trickier than ADSL to setup," she said. "But this is where satellite wholesalers and systems integrators can get involved. They can offer set up services on behalf of regional ISPs to help alleviate the costs in getting satellite to consumers. This way, the customer does not have to become a satellite engineer to use the technology."

According to Market Clarity's research, as of March this year there were only 23,000 broadband satellite services operating in Australia.

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