Internet and broadband
Despite the ‘Mexican Standoff' between the government and Telstra on the issue of a regulatory holiday for new broadband infrastructure, broadband penetration is proceeding at high speed in Australia. By mid-2007, there were close to 4.5 million subscribers. In the residential market this means a broadband penetration of close to 64% in Internet households (46% of total households). In the business market, this figure is over 80%.
While the penetration of broadband in Australia is catching up with its trading partners, it is still lagging behind in the quality of broadband provided by the operators and in the price customers have to pay. The majority of customers are still on services that provide only 256Kb/s or 512Kb/s. Telstra does make an 8Mb/s service available, but this is not a guaranteed speed.
Telstra's competitors are leading the market in the higher speed ADSL2+ services market. The regulator has finally been able to force better unbundled local loop and spectrum-sharing wholesale services into the market, and affordable true-broadband services are now available. Telstra is only making ADSL2+ available in those exchanges where its competitors have installed their own DSLAMs, so it is being a follower rather than a leader in new and innovative broadband services.
Convergence
It is interesting to note that we are rapidly moving from ‘convergence' to ‘digital media', where we are talking about the results of convergence rather than the process.
The traditional companies involved are still struggling with the transition. They are being forced to deal with the Internet media companies, which simply skipped the convergence phase and jumped straight into the digital media market.
The music industry was the first to find out that it could be bypassed, and now it is the film and video industry that is scrambling to come up with an answer. Rather than embracing the brave new world of digital media they responded in the same way as the music industry - with denial and law suits against the Internet companies.
Interesting developments are also taking place within the home environment. Here the convergence between the various consumer products has just started, and a major battle will take place over the next five years.
The FtA television industry is also facing challenges from a number of fronts as incumbent broadcasters cling to their lucrative oligopolies. Marketing and media buyers are increasingly turning to alternative media, such as the Internet and mobile channels in order to reach consumers. Digital FtA TV has been held up in a vicious cycle since its launch. Available digital content, beyond simply offering better picture qualities, has been nowhere near sufficient to help drive digital TV. The main driver of growth has been ‘user experience' delivered by DVDs and plasma screens.
By early 2007 with the vast majority of subscribers on digital services, pay TV penetration had only reached just over 25% and we expect penetration to reach only 26% in 2007.
This report contains only tables of statistics relating to broadband and the digital media in Australia. For a detailed discussion and analysis of the broadband market, see the full reports here.
Data in this report is the latest available at the time of preparation and may not be for the current year.