Editorial: The need for speed
- 01 December, 2004 15:25
The path to true broadband access for Australian consumers and businesses got a much needed shot in the arm last week when Primus announced it was making a new 6Mbps service available. While iiNet customers were offered a maximum speed of 8Mbps back in June, Whirlpool said Primus would be the first to offer such speeds to a broad base of customers.
Initially, Primus is guaranteeing a minimum speed of 2Mbps (which is quicker than most maximum speeds offered by its competitors) while its top end is four times faster than most of the so-called premium services previously offered in this country. It is also at a competitive price point - $29.95 per month with a 400MB download limit; or $49.95 per month with 12GB of data.
It is only nine months since the broadband price wars got underway with Telstra offering its retail customers an entry-level 256Kbps service with a 200MB download limit. At the time, this was cheaper than its wholesale partners were able to buy the service for. Some moves have since been made by Telstra to rectify the cost discrepancies, but the ACCC has still to make a decision on the ensuing anti-competitive furore. How quickly the competition has hotted up.
If recent history in the local high-speed Internet market is anything to go by, we are now likely to see other major players offering faster broadband services at affordable prices in order to remain competitive. At last it seems the 256Kbps and 512Kbps services that have been the mainstay of the local industry to date can be recognised for what they are - "baby broadband" as Pacific Internet managing director, Denis Muscat, dismissively labelled them not so long ago.
Putting a consumer hat on for a moment, the obvious question to ask is why faster speeds have not been available before. Primus' general manager of strategy, products and development, Campbell Sallabank, suggested his company was simply letting ADSL do what it is supposed to - run at 6Mbps. Primus was now able to do this, he said, because it was enabling exchanges on its own network rather than relying on Telstra's. iiNet also claims it achieved its high speeds by investing in its own infrastructure.
It will be interesting to see if Telstra manages to offer the market some faster speeds in the near future. But regardless of whether it does or not, it seems likely that the bigger players who can afford to do so will continue to build their own infrastructure and cut their supplier cum main competitor out of the equation all together.
With the broadband market still a relatively young one, entry-level BigPond plans will continue to be the weapon of choice for most first-time buyers for some time to come.
But as the market continues to mature and the demand for services like video streaming grows, baby broadband will no longer cut the mustard.
The dream of a digitally connected home gets closer all the time but it is crying out for faster broadband access to be widely available. Alongside Telstra's price slash earlier this year, which put broadband speeds and pricing firmly on the agenda, the latest move from Primus could well be remembered as one of the most significant markers in advancing the Australian high-speed Internet market.