Broadband sneaks up via small firms

Broadband vendor Pacific Internet's quarterly “broadband barometer” survey by ACNeilsen found that 41 percent--or 206,000--of the high-speed connections sold in Australia were sold to businesses of that size by June this year, up from 20 percent in June 2002.

“That is very surprising,” said Dennis Muscat, managing director of Pacific Internet. “We think smaller businesses have been adopting broadband under the radar.”

Muscat said that Pacific Internet believed smaller businesses were buying broadband connections marketed for home use rather than business-focused products, which tended to be geared to corporate use. This was partly what had created a disparity in the vendor survey figures and more conservative estimates produced earlier by the ACCC, he said.

“[Our survey showed] smaller businesses have preferred the value-for-money products such as cable modems and ADSL rather than the big offerings by big ISPs and telcos,” Muscat said.

The Pacific Internet survey suggested that xDSL had been adopted by 25 percent of smaller businesses with Internet access, up from 12 percent in 2002, and cable modems by 15 percent of smaller businesses, up from 10 percent in 2002.

Internet penetration in small businesses was near saturation, with 77 percent or 505,000 companies connected, Muscat said.

However, the survey also showed that security was the biggest concern for smaller businesses' Internet use, with 75 percent of all small businesses with a broadband connection using firewalls, 70 percent using network security and 67 percent having office LANs. Sixty-two percent feared computer viruses, 66 percent junk email and 48 percent had concerns about ISP performance, the survey found.

Smaller businesses with broadband connections were bigger users of spam filtering software, with 35 percent already using such a product and another 37 percent intending to use one, the survey said.

“So that's where we should be concentrating a lot of product development,” Muscat said.

On the other hand, public access wireless hotspots, voice over Internet Protocol (VoIP), unified messaging, and video-conferencing had failed to fire interest, with more than 50 percent of smaller businesses saying they had “no intention to use” those technologies.

Some 40 to 50 percent of businesses surveyed also said they had “no intention to use” a virtual private network (VPN), telecommuting or remote access, off-site backup, or wireless LAN.

Muscat said one big concern was the digital divide between city and country. Although broadband was adopted equally in all states, the technology's penetration was “significantly higher”, at 49 percent of smaller businesses surveyed, than in non-metropolitan regions, at 18 percent.

IT at 56 percent, finance/insurance at 46 percent, and property/business services at 45 percent, had the highest broadband penetration of any vertical, while the fastest growing industry sectors were small businesses in retail, up 24 percent to 62 percent, and wholesale, up 18 percent to 59 percent, according to the survey.