IDC Finds Australia Represents the Strongest Broadband Revenue Opportunity in Asia Pacific

NORTH SYDNEY – AUGUST 14, 2002 – According to IDC's Australian Broadband Market Analysis and Forecast 2001-2006, Australia represents the strongest broadband revenue opportunity, accounting for only 2% of subscribers in 2001 but 14% of revenues. By 2006, Australia will have 8 % of the region's subscribers and it will represent the second largest revenue opportunity with 39% of total Asia/Pacific broadband revenues.


Australia will become one of the top contributors to Asia Pacific's broadband revenues due to the high broadband service pricing and the dominance of corporate subscribers in the Australian market, said Emilia Wasiak, IDC Senior Analyst, Communications.

Since late last year, the Australian broadband market became increasingly competitive, partly stimulated by the announcement of new broadband wholesale prices, partly by advertising campaigns. New service providers entered the market and a new range of services, including the emergence of metro Ethernet Internet access and wireless LAN services, was launched.

Currently, Telstra remains effectively unchallenged in Australia's broadband market, but ongoing pressure from the industry regulator and renewed activity from Optus following the take-over by SingTel is likely to spurn greater competition in the market this year, added Emilia Wasiak, IDC Senior Analyst, Communications.

The broadband access services market in Australia experienced significant growth in 2001 – growing by 448% since last year to A$914.2 million in 2001. IDC expects the number of subscribers to broadband access services in Australia to grow by 132% percent to 449,000 subscribers by the end of 2002.

The market will experience sustained growth reaching 3.51 million subscribers in 2006, driven by the increase in broadband content and applications on offer, the uncapping of the cable modem bandwidth restrictions, pro-active government initiatives and the increased adoption of next-generation services such as network storage or Virtual Private Networks.

Even though the increase in subscriber numbers seems impressive, broadband penetration still has a long way to go in Australia compared to countries such as Korea where 39% of households hold a residential broadband subscription. Only 2% of Australia's total population is expected to subscribe to a broadband access service in 2002. By 2006, IDC forecasts total broadband subscribers to achieve a population penetration rate of 17%.

Now that subscriber numbers are starting to increase rapidly, broadband content partnerships will be emerging at a much faster pace. We may even see in the latter part of 2002, investors who have been deterred from investments in dotcoms and start-ups starting to see real value propositions and potential return on investment (ROI) in demand for broadband content. Local content will be key to the strong growth over the next several years with multiple technologies coexisting in the market and more than one technology being successfully deployed and adopted. However, because of the limited competition in the cable modem market and the ubiquity of the copper wire infrastructure, DSL will likely maintain its dominant position in the broadband access market in the next years.

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