The digital divide between regional and metropolitan small to medium businesses continues to grow, hampering the competitiveness of regional businesses, according to the latest Broadband Barometer from Pacific Internet.
According to the survey of 452 Internet-enabled small businesses by A.C. Nielsen, 55 percent of metropolitan SMBs in Australia use a broadband connection (defined as an Internet connection of at least 256 Kbps) while only 20 percent of regional businesses use a broadband connection.
"The serious thing is that the gap is getting bigger," Pacific Internet managing director Dennis Muscat told ZDNet Australia . The number of metropolitan businesses using broadband increased by two percentage points between September and December, while the figure for regional businesses was less than one percentage point.
The Barometer found that 37 percent of regional businesses using narrowband technology claimed the primary reason for not using broadband was because it was not offered in their area, despite a three-and-a-half year push by Telstra to improve regional and rural communications. Matthew Dickerson, a network consultant for Axxis Technology -- a systems integrator based in Dubbo -- agreed with this assessment.
"We have a CBD in Dubbo which has an exchange, and you can get broadband for 3.5 km around that. A very high percentage of those businesses use broadband," Dickerson told ZDNet Australia . He said, however, that other "business pockets" around Dubbo had no access to broadband.
"The largest shopping centre in Dubbo is around 5 km from the exchange, and there are around 70 small businesses in there which can't get broadband," said Dickerson, adding that he knew of at least 10 businesses in the shopping centre that were keen to get broadband access.
The situation is best demonstrated by businesses in Warren, a small town of just over 3,000 people about 120 kms north west of Dubbo. SMBs in the region banded together and asked Dickerson to broker a deal with Telstra where the businesses would pay to have the infrastructure installed to provide broadband access. Telstra gave Dickerson a figure of "AU$40,000 to AU$80,000" to upgrade the infrastructure.
When Dickerson returned with the sum, the small business owners said they had AU$80,000 ready to go. This was seen as cost-effective as some of them were paying AU$20-30,000 per month in communication charges, according to Dickerson.
To add insult to injury, Dickerson cited a plan by the National Office of the Information Economy to spend AU$300,000 on a survey in Dubbo to find out the broadband needs of the area. Dickerson believes the money would be better spent simply upgrading the telecommunications infrastructure in the region.
The impact of this dearth of infrastructure on regional Australia is evidenced by the benefits small to medium businesses garner from broadband access compared to narrowband access.
The survey found that of those SMBs using broadband, 86 percent indicated the use of broadband compared to narrowband had significantly increased efficiency and productivity. Forty seven percent reported a significant reduction in operating costs while 17 percent reported the move to broadband had significantly increased revenue as well as national and international trade.
The Broadband Barometer also found a great number of small businesses which used residential broadband plans for their connection. "I think this is something that is of concern to the industry, because the potential of being hacked, of not being able to control unsolicited e-mail and viruses increases on residential plans," said Muscat.
However, small businesses are unlikely to gain much joy from the recent broadband price war initiated by Telstra. Of those SMBs with a broadband connection 78 percent indicated they downloaded more than 500 Mb of data per month -- much greater than the 200 Mb cap on Telstra's lowest plan.