Small businesses continue to sign up to broadband services, but many are being swayed by price and not product, a new broadband report claims.

According to the results of the latest biannual Pacific Internet Broadband Barometer Report, broadband take-up within the small business sector continues to rise, increasing from 47 per cent in January to 52 per cent in July. Of these, 39 per cent of broadband users reported using a broadband product aimed at the residential market - a two per cent drop on the results published in the previous Barometer report in January.

For the first time since the report’s launch, respondents were asked why they had opted for a residential service. In total, 53 per cent said they were using the residential service because it was cheaper while 52 per cent said they did not need a business grade service.

The report claimed these findings suggested the broadband price reductions instituted by Telstra in February have and will continue to have a significant effect on small business broadband adoption over the coming months.

To back this claim, 35 per cent of those surveyed stated they were using a form of DSL technology for their broadband services – a jump of 10 per cent from last year’s figures.

Pacific Internet managing director, Dennis Muscat, agreed the residential price cuts had fuelled broadband takeup amongst small businesses. He said the report proved these businesses were increasingly seeing the value of using broadband services.

However, most were still basing their decision on what plan to adopt on cost and simple network connectivity, he said.

“While small businesses are still using residential plans, they’re not positioned on a platform that’s suitable for more advanced applications like Voice over Internet Protocol [VoIP] and videoconferencing,” he said.

Muscat was confident the industry would see a shift to business grade services as the business market advanced.

In the meantime, firewalls, network security and LANs continue to be the most widely used technologies across broadband. The report found there had also been a substantial rise in the number of small businesses using a spam filter - from 48 per cent to 63 per cent between January and July.

VoIP services had also gained popularity over the past six months. Twenty-five per cent of those surveyed said they intended to use the technology. This was up from 17 per cent in January. Current users had however, increased by just two per cent over the period.

The July 2004 Barometer report, conducted on behalf of Pacific Internet by ACNielsen.consult, was based on a survey of 562 Internet-enabled businesses with less than 50 employees across Australia.