Rural Victoria left off the broadband map: Minister

The accusation follows the release of a state commissioned report that, according to Minister Marsha Thomson, shows regional Victoria is the fastest growing market for telecommunications use. However, she says, demand for increased services are still unmet.

Thomson said the results of the report, "Spend/Demand - Telecommunications in Regional and Rural Victoria", should be an incentive for the federal government to meet regional customers' needs.

"Residents and businesses in regional Victoria have not been getting the access to broadband internet services that they need," Thomson said. "More and more regional Victorians want to plug in to broadband rather than relying on slower, less reliable dial-up internet connections."

Thomson blames the lack of broadband availability as the reason behind Australia's slipping from 9th to 12th in the ranks of international broadband take-up, as was reported by IDC last month.

She said the telecommunications report, conducted by ACIL Tasman, will inform the federal government and telecommunication providers on the potential for services to be marketed in regional areas and help promote an environment for competition and new telecommunication investment.

"This report highlights that for many areas in Victoria demand is already strong enough to justify broadband supply," she said.

-The fact that the federal government refused to undertake any of this type of analysis before pursuing ad-hoc solutions such as the Higher Bandwidth Incentive Scheme (HIBIS) raises fears that HIBIS will turn out to be merely a pork barreling exercise for areas that should already have broadband and that real areas of need will continue to miss out."

Released yesterday the report examines the existing telecommunications market in Victoria, which includes broadband ADSL and cable Internet, satellite broadband Internet, narrowband, fixed line telephone, mobile phone and pay TV.

The report also assessed the unmet demands from would-be broadband subscribers, the expenditure of telecommunications service in the region and predictions of the industries evolution up until 2008.

The total expenditure for telecommunications in Victoria for 2003 was around AU$8.79 billion, according to the report, with over 76 percent or AU$6.65 billion of that total stemming from the metropolitan Melbourne area.

The report stated that businesses accounted for over 50 percent of the total state telecommunications expenditure or AU$4.5 billion; followed by the residential spending tally of AU$3.91 billion (44.5 percent), and the government accounting for the remaining AU$0.38 billion or 4.3 percent.

State-wide fixed line telephones accounted for AU$4.55 billion (52 percent) of the total spend making it the highest expense out of all the telecommunications services; followed by mobile telephones at AU$2.01 billion (24 percent); ADSL and cable broadband with AU$699 million (8 percent); narrowband Internet with AU$490 percent (6 percent) and lastly pay TV with AU$318 million.

Research into the current coverage of broadband services found that 75.9 percent of the population is covered by ADSL and cable services. In demographic terms, this statistic equates to 77.67 percent of Victorian households having ADSL and cable broadband coverage and 74.61 percent of all businesses.

According to the report there is an unmet demand for broadband services by approximately 36,120 customers in areas that are not covered by ASDL and cable broadband services.

The report predicts that mobile and broadband telecommunication services will "provide for most of Victoria's future telecommunications expenditure growth" over the next four years to 2008.

It predicts that the total telecommunications expenditure in Victoria will rise by around 50 percent to over AU$13 billion in 2008, with the increase driven by population growth, an increase in the availability of services and the maturing of the broadband, mobile and pay TV markets.

However, the report also states that unmet demand for broadband will also increase to 67,762 by 2007 before it begins to decline in 2008 as the coverage area continues to grow over 93 percent of the Victorian population.

Yet customers in the remote areas of Alpine, Baw Baw, East Gippsland and West Wimmera will continue to miss out due to the low population and an expansive geographical area making it difficult to service.

The report states that the number of ADSL and cable broadband customers will increase six fold by 2008.