Australia lags behind Canada in terms of broadband adoption and won’t catch up in the immediate future, according to a benchmark study. Because the two countries shared similar geographies and telco environments, IDC undertook the study to find the key factors contributing to Australia’s lethargic atmosphere, IDC market analyst, Adrian Cotiga, said.
The report, dubbed Australia versus Canada: A Broadband Benchmark, predicts that by 2007 Australia won’t reach the broadband penetration level that Canada enjoys.
As the countries square off, key findings show Australia had a residential broadband penetration of 7 per cent at the end of 2003, while Canada came in at 35 per cent.
Canada’s xDSL residential rate, meanwhile, will equal Australia’s total broadband penetration in 2006. And except for the entry-level offer, Australian offerings were described as "clearly inferior in value to those available in Canada in terms of price, speeds and download caps”.
Cotiga said 80 per cent of the Canadian xDSL connections were true broadband ADSL (1.5 Mbps download). The majority of Australian ADSL connections are 256 or 512 kbps.
Canada was advanced because none of the four major Canadian cable companies – Shaw, Rogers, Cogeco and Videotron – had an investment in the xDSL service providers, whereas in Australia, Telstra and Optus had investments in both xDSL and cable markets, he said.
The Australian model doesn’t encourage competition.
“Canada has a much more competitive environment than Australia,” Cotiga said.
He highlighted the fact that Canada was an early adopter of cable TV with the four cable companies going head-to-head for market share.
And while market dynamics are improving in Australia, he said more needed to be done on several fronts.
The Australian government, for example, needed to do more in terms of driving broadband adoption and improving the regulatory environment.
“If Telstra wholesales the cable network, that would help,” he said.
Industry also needed to create an enticing strategy to move from dial-up to broadband, Cotiga said.
“We need more on the education side; we need to create competition and give customers a reason to move to broadband,” he said.
Price reductions including discounted upfront installation costs were key, Cotiga said. This indicated the trend was starting to hit Australian shores, and had been marketed in international waters for several years.