Broadband peddlars told to cut costs and beef up content

Broadband service providers need to ramp up their content offerings and lower their prices if the future ofhigh-speed Internet access is to flourish in Australia, according to research group IDC.

Figures from IDC indicate that narrowband usage is by far more popular than broadband, with around three millionmore subscribers at present. However, the group predicts that by 2004, the gap will have closed significantly, witharound four million narrowband users compared to just under three million broadband users.

Two main factors holding back growth in the broadband arena, however, are cost and content. Using recent ABS figuresthat highlight the youth demographic as the largest Internet home user group, IDC suggests that current pricing ofbroadband is not compatible with the thin wallets of most young people. Compounding the issue is thatbandwidth-hungry applications most suited to broadband usage, such as streaming audio and video, online gaming andNet radio, are also the ones this same demographic is most likely to seek.

Cost is also an issue with businesses, with an IDC survey revealing around 60 per cent of businesses were unwillingto locate their offices in a broadband IP-enabled building due to the cost.

While cost was one of the key reasons for users not switching to broadband, a more important one was that theirsatisfaction with their current narrowband setup. With local broadband content being relatively weak, users are notbeing given any incentive to switch to high-speed access. This led IDC to conclude that content will be the mainfactor in broadband uptake over the coming years, with service providers needing to develop or syndicate strongcontent that people are willing to pay for. Additionally, value-adding will play an important role in the popularityof broadband services.

IDC also predicts the emergence of the "walled garden" concept as epitomised by AOL's offering. This concept willexpand and flourish, according to IDC, making content even more of a critical component.

In terms of what technology users select for their high-speed Internet access, cable modem was the broadband accessof choice in 2000. This year, however, has seen a shift with ADSL being the preferred technology. IDC predicts thistrend will gain momentum in the coming years, citing a figure of 3.5 million ADSL users by 2005.

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