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broadband to put pstn under pressure in 2006 Broadband to put PSTN under pressure in 2006: IDC
By Stan Beer

The Australian broadband market will evolve with the introduction of naked DSL services within the next 12 to 18 months, having a dramatic impact on traditional telephony according to a new report.

IDC has recently released the report "Australia Broadband Market 2004-2009 Forecast: Naked DSL to Become Lethal to PSTN." According to the report, the broadband market is set to evolve to the next phase with the introduction of naked DSL services within the next 12 to 18 months and take full advantage of the Unbundled Local Loop (ULL). This will have dramatic impacts on traditional telephony and will give a boost to residential VoIP services.

"Looking back at the first half of 2005, Bigpond has successfully grabbed a larger proportion of the new broadband subscribers, and remains the champion in broadband net adds market share terms with 43.5% of new subscribers for 1H05, compared to 40% in 2H04", said Shing Quah, associate analyst, telecommunications.

Dial-up subscribers have peaked in 2004 and growth in the Internet access market in Australia from 2005 onwards will be exclusively driven by broadband adoption. However, dial-up subscribers will continue to outpace broadband subscribers until the end of 2006, at a ratio of 51% dial-up subscribers to 49% broadband subscribers.

"Taking a closer look at the broadband household penetration, IDC estimates that 30% of Australian households will have a broadband subscription at the end of 2005, and this is projected to be close to the 50% mark or 1 out of 2 households to have a broadband connection by year-end 2008," added Landry Fevre, research director, telecommunications.

IDC has outlined seven updated recommendations that would take Australia's broadband market to the next phase:

- Offer naked DSL services (broadband service without landline),
- Lower ULL and enforce
- Uncap broadband speed
- Mobile broadband as an alternative
- Local council involvement and broadband funding,
- Divest hybrid fibre coaxial (HFC)
- Divest Foxtel.

With the current momentum of alternative service providers rolling out their own DSLAMs in Telstra exchanges, IDC believes total number of ULL will surpass 1.28 million unbundled lines at the end of 2009 at a CAGR of 98%.

The Australia broadband market has generated total revenues in excess of $1.1 billion in 2004 and IDC predicts that it will continue to rise beyond the $2 billion mark in early 2006 and reach $3.5 billion by 2009.