Australian Broadband Users’ Download Bonanza
24 January 2011
It’s been quite a while since Market Clarity has had the chance to get in touch with our customers and friends, and in that time, a lot has happened in the industry – namely the establishment of a new telco monolith (NBN Co), and the 2010 election that left the industry in limbo for a while; and the year ending with the passage of various key items of legislation to get the NBN going.
Of course, the widespread flooding that led us into January 2011 has also had its impact on the industry, but we’ve been lucky compared to the many individuals and small businesses that have been devastated.
Although we’ve been a bit quieter than usual, we’ve been busy with many research projects, and are pleased to offer the industry a new free research report: Broadband Download Behaviour in Australia – The Disconnect Between Allowance and Usage, which examines Australian residential fixed broadband plans and user behaviour over the 2006-2010 period.
We’ve also released our latest research on The Australian Internet Market: Market Tracker History and Forecast 2000-2015. We’re donating 10% of proceeds from this publication to the Queensland Premier’s Flood Relief Appeal.
We wish you a Happy New Year 2011!
Australian Broadband Users’ Download Bonanza
- The average Australian residential fixed broadband user now enjoys close to 45 GB of downloads included in their broadband plan.
- Usage, while continuing to rise strongly, has lagged plan allowances.
- ISPs have maintained their price points, delivering much better value to customers while ensuring that they’re less likely to “max out” their plans.
The average Australian broadband user consumes around 15% of his or her broadband allowance, according to a research report just completed by Market Clarity.
This year saw the emergence of a surprising business model in broadband services, with the launch of Terabyte (and more recently unlimited) monthly download allowances from providers like TPG, iiNet, iPrimus, Internode, Optus, Adam Internet, Westnet, Dodo … the list goes on.
Even before the “Terabyte wars” began, however, Australian broadband users were already the lucky beneficiaries of growing download allowances. That trend, most apparent since around 2008, led Market Clarity to wonder whether there might not be a gap between the allowances customers receive when buying broadband plans, and their consumption of broadband data.
For this analysis, we drew on several sources: Market Clarity’s internal databases, which include long-term analysis of residential broadband SIOs (services in operation), ARPU and revenue; as well as historical capture of ISP’s broadband plans going back to 2006; and the Australian Bureau of Statistics’ ongoing Internet Activity Australia series of publications.
Our conclusion is that since around 2008, there has been a widening gap between the average user’s broadband allowance and that user’s consumption. While there is undoubtedly a small population of hard-core users that consumes as much data as they can, most users these days probably get nowhere near their cap.
If we look at residential users only, the ABS Internet Activity Australia data suggests the average Australian residential user consumes around 6.7 GB per month (as measured across all plan types), while the huge growth in plan allowances gives the average customer a theoretical upper limit of close to 45 GB. Back in 2006, on the other hand, the gap was much smaller: users bought around 5 GB per month on average while using around 2.4 GB.
However, for most users, the upwards migration of broadband data allowances has been more-or-less invisible. Providers have, for some years, been upgrading their plan offerings without any adjustment to prices. The broadband bonanza has been a double benefit for users: not only is the average user unlikely to run into cap or excess fee issues (especially compared to four years ago), they’re getting this benefit without paying more. While there have been adjustments by individual ISPs in their plan structure, on an industry-wide basis, there has been very little change in price points since 2006.
Market Clarity’s study covered a sample of consumer plans offered by ISPs that currently represent close to 92% of the Australian residential fixed broadband market.
Market Clarity is offering this report, Broadband Download Behaviour in Australia — The Disconnect Between Allowance and Usage, as a free download from our Website.
The Digital Divide and Access to Services
Some time back, Malcolm Turnbull pointed out in Parliament the ongoing association between Internet access and incomes.
Mr Turnbull correctly noted that most people with annual incomes over $120,000 are connected to the Internet, but relatively few within incomes under $40,000 – but he overlooked a further correlation between income, where people live and the type of telecommunications infrastructure available in a given area.
Internet access follows income: and both access and income follow geography.
In the broadband debate, this is important. People far distant from Internet infrastructure are less likely to use the Internet because they’re less likely to get a decent connection; and households further than 3 Km from ADSL-enabled exchanges are unlikely to be connected (other than via mobile broadband, which is more expensive than fixed broadband on a per GB basis.)
To illustrate this association, Market Clarity conducted a quick analysis of the distribution of household incomes in NSW according to the 2006 Census. The map below is based on our calculation of the average annual household income in each of NSW’s Census Collection Districts (CDs).
Normally, a map like this would include the outline of NSW. We’ve omitted the outline for a reason: it would obscure those very small red-shaded areas in NSW in which the CD has an average annual household income of over $120,000 (you’ll see some tiny red zones in Sydney and nowhere else).
The table below shows the relationship between income and distance to fixed broadband services (for ADSL services only).
Average Annual Household Income for Census Collection District
Average Distance from Centre of Census Collection District to DSL-enabled Exchange
|Up to $40,000||4.9 Km|
|Over $40,000, up to $80,000||3.4 Km|
|Over $80,000, up to $120,000||1.7 Km|
|Over $120,000||1.3 Km|
Although this is only a superficial analysis, the illustration makes it crystal clear that the less-connected households in NSW — those with low incomes — also have less access to services because of their location.
Malcolm Turnbull was right — the digital divide endures. However, it’s more than income that’s at stake. If the NBN is about access to services — and if it can deliver services at a price that’s affordable to all income levels — then it could be a vital component in reducing that digital divide.
Note: Market Clarity offers GIS-based data analysis for general market, territory, demographic and competitive assessment needs. If you need to know more about the relationship between your operations, your customers, and Census data we can assist.
The Australian Internet Market: Market Tracker History and Forecast 2000-2015
With the government’s huge investment in the National Broadband Network, it’s more important than ever for carriers, ISPs, vendors, policy makers and other interested parties to have access to detailed information about Australia’s Internet market.
Market Clarity’s latest Internet forecast covers Broadband and Narrowband technologies, giving an insight into how the market has developed over the last ten years and provides growth forecasts to 2015 in 6-month increments.
This forecast incorporates data from NBN Co’s Dec 2010 business plan, the latest ABS Internet data and ISP results. This research focuses on the fixed Internet market, but also includes key data on emerging mobile broadband trends.
The Australian Internet Market Tracker: History and Forecast 2000-2015 Report provides a year-by-year analysis of the market for Broadband, Narrowband and overall Internet services, covering:
- Services In Operation (SIOs)
- Monthly Average Revenue Per User (ARPU)
- Market Share by Services in Operation (SIOs) in Dec 2009
- Market Share by Revenue in Dec 2009
- Segmentation by Retail and Wholesale Markets
- Segmentation by Residential and Business Markets
- Segmentation by Business Size
- Segmentation by Industry
- Segmentation by State (Overall, Residential, Business)
- Segmentation by Metro and Regional (Overall, Residential, Business)
- Segmentation by Speed (Overall, Residential, Business)
- Segmentation by Technology
This publication comes in the form of a spreadsheet-style report covering 26 retail and 8 wholesale ISPs. With over 70 tables of detailed historic and forecast data, this report has a wealth of data for anyone interested in Australia’s fixed and mobile Internet market.
Additional information is available here.
Australia’s Wireless Market: Analysing NBN Co Deployment Plans
How well would Australia’s existing fixed wireless and 3G mobile infrastructure serve the needs of the “last 7%” — Australians that live outside the NBN (National Broadband Network) fibre footprint?
In Australia’s Wireless Market: Analysing NBN Co Deployment Plans, Market Clarity has examined the relationship between current infrastructure, NBN Co’s published maps and proposed POI locations, and the population / cost modelling conducted for the NBN Implementation Study — and offers a geospatial analysis in a presentation-style report.
Market Clarity also examines various scenarios for rolling out wireless infrastructure in an NBN world, and examines other options for broadband services beyond the proposed NBN fibre deployment.
With the right technology, relationships and re-use of infrastructure, Market Clarity believes wireless delivery may turn out to have better coverage, and be more efficient than we expect. While only around 4,400 households are within 7 Km of existing remote (for the purposes of this exercise, “remoteness” was defined as people living more than 50 Km from an urban centre or locality) cellular and broadcast tower infrastructure (ignoring terrain), the choice of technology will be vital.
By contrast, over 955,000 people, in more than 330,000 remote households live within 50 Km of some kind of cellular or broadcast tower.
One of the interesting findings of this geospatial analysis was the large number of existing remote cellular or broadcast towers sitting in the middle of NBN Co’s planned satellite service footprint.
By leveraging the right combination of existing infrastructure and radio technology, terrestrial wireless delivery could become an increasingly viable option for NBN connectivity in geographies that are currently targeted for satellite services.
Dark Fibre Connectivity Options
Earlier this year, Market Clarity conducted an in-depth analysis of the availability of fibre suitable for ISP backhaul operations. This report, Dark Fibre Connectivity Options, provides information on the proximity of fibre from 11 infrastructure owners to 353 DSL-enabled exchanges.
Our thanks to Internode, who has sponsored this report.