Australia getting more broadband for its buck

Australian broadband users are getting more out of their Internet connections although prices have remained static, a report from the Internet Industry Association (IIA) has found.

"What our most recent survey found was that the prices haven't changed but the capacities of people's connections are increasing," Peter Coroneos, chief executive of the Internet Industry Association (IIA), said.

According to Coroneos, competition between ISPs is driving increased capacity: "Ours is one of the most competitive industries in Australia in terms of the number of players. We identified as many as 600 ISPs of all descriptions at year's end 2007."

Despite the diversity of Australian ISPs, the IIA research found that it was mainly competition between the big names that was most beneficial to customers.

The report found that data caps, particularly those offered by large providers, were being increased substantially to satisfy the high usage patterns of Australian broadband users.

The report concludes that the average cost of data was AU$80/gigabyte at the start of 2007 but fell to AU$52/gigabyte by the end of the year.

Despite the promising statistics, Coroneos said: "A broader question from the research is what can be done to reduce the underlying cost of data in Australia."

He told ZDNet.com.au today that he believes "Australia still has a way to go in terms of utilising the real possibilities of broadband," and said the relationship between broadband, industry and innovation will be critical in the years to come.

"It will fundamentally become what electricity was to industry 150 years ago," he said. "That's the kind of the trajectory we're on, heading towards the industrialisation of broadband."

The IIA chief executive predicted that 2008 will see even greater competition on the capacity front, as some ISPs prepare their business plans with the increased overseas capacity enabled by the Pipe Pacific Cable in mind.

"How fast is fast enough is really a question of end-user expectations, the Internet as a whole is being underutilised at the moment," he said.

While Coroneos believes that the Pipe cable has already had an effect on the broadband market even before its construction, some industry watchers have been more reserved in their judgement.

Guy Cranswick, senior analyst at research firm IBRS, told ZDNet.com.au that "it is absolutely impossible to say right now" how the cable will affect retail broadband pricing.