Eight of Australia's 718 Internet Service Providers may control 60 percent of the market but are smaller ISPs ready to bite the dust yet?
Figures released by the Australian Bureau of Statistics (ABS) found that there are eight "very large" ISPs, with more than 100,000 subscribers, which provide Internet access services to 2.3 million of the nation's 3.8 million active subscribers.
Six of the top players include Telstra, OzEmail, Optus, iPrimus, OneNet and AOL, according to Internet research firm www.consult.com.au
Smaller ISPs survive and make money because they provide better, personalised services to business clients, according to consult's Ramin Marzbani.
"The definition of what an ISP is has changed a lot," Marzbani said. With many smaller ISPs acting as "defacto Web designer and systems integrator", he added.
According to the ABS, there are 28 large ISPs (with 10,001 to 100,000 subscribers) that have a 23 percent foothold in the field, and 173 medium ISPs (with 1,001 to 10,000 subscribers) that service 13 percent of the nation's subscribers.
Five hundred and nine ISPs are considered small or very small, and have up to 1000 subscribers.
Smaller ISPs service Australia's half a million small businesses, according to Marzbani. "Telstra can't do that. Small businesses like doing business with other small businesses."
The Internet Industry Association (IIA) agrees that smaller ISPs focus more on business customers and special interest groups but believe they will remain viable through consolidation that commenced during the dot.com boom.
"Small ISPs were offered large premiums for their businesses then," Fair said. "This process of consolidation will continue."
Fair believes that technological advantages in ISP provision means that the market can sustain large numbers of providers.
"The more providers and the more competition there is to get broadband into Australian homes the better," he said.
However, "It's much harder to reach the mass consumer market unless you're part of a large business," he added.
