What is broadband for? Faster, more complex ways of doing business and getting services, education and playing games, for a start.
The government’s regional broadband Probe intends to bring two-way, high-speed internet access – at least 512kbit/s for secondary schools – to most schools by the end of next year, and to all schools by 2004. While that should allow videoconferencing and other bandwidth-greedy distance learning to students, it’s also for business and the wider community, says State Services Minister Trevor Mallard.
In the 14 regional tenders, bid for by the likes of Telecom, BCL et al, the MED estimates 75% to 85% of the community will gain access to broadband “as a by-product of the infrastructure rollout to schools”. Presumably they'll do so as part of the demand aggregation necessary to persuade Telecom to upgrade local exchanges to DSL (though we did for a second imagine the local school on-selling bandwidth to households once the 3.30pm bell rings, or a few poor souls trudging over to their nearest school hall, library or council chamber).
If we ignore, for the moment, those who suggest the regional broadband rollout is little more than a politically acceptable way to subsidise what was once a state-owned enterprise and that few-megabits DSL is only an interim solution, we can see that key issues could be whether people will be willing to keep paying for fast internet, and giving them something to do with all their megabits.
Telecom says by June it had 25,000 residential DSL customers and 17,500 business users, and is increasing its DSL user base by 2000 residential and 700 business customers a month (compared to about a million total on dial-up). Telstra, meanwhile, aims to have a million Australian broadband subscribers by 2005. IDC says by 2006 more than 60% of the global internet population will be on broadband.
The government has set aside up to $99 million to fund regional broadband initiatives. Australian telco analyst and sometime Telstra bete noir Paul Budde estimates the Australian government needs to find $A5 billion for the infrastructure necessary to give all Australians equal access to broadband. Not exactly comparing Murray River fruit with Kerikeri citrus (Australia is slightly larger, with a few more people), but the difference is intriguing.
Demand for broadband and data has apparently punched the Aussie telco market back into life, with growth of 5.3% expected, according to Budde. He reportedly thinks Telstra is actually losing revenue on broadband (said to be now delivered to 250,000 homes) and data services, though the million megabitters should give revenue a lift in the next couple of years.
Broadband demand is likely to widen as it strengthens. The worldwide market for internet access devices of all stripes (PCs, mobile phones, internet set top boxes, and internet and smart appliances) will grow at an overall annual rate of 41.6% in unit terms between 2000 and 2005, according to Cahners In-Stat/MDR. But it accepts that the PC and mobile phone segments comprise just over 93% of the industry and will continue to dominate for the next few years.