Issue: 40/08

ATUG Annual Awards for the Effective Use of Broadband

October 15, 2008

Australia’s NBN vision is a world leading initiative – 98% of premises with a minimum of 12 megabits per second broadband in five years achieved with a Government contribution to funding of $4.7 billion.

ATUG’s regulatory framework submission highlighted a number of key issues for end users:

•	The Policy objective for the NBN regulatory framework must remain The Long-term Interests of End Users.
•	Affordability is key to take-up. Regulation should support cost effective build. Competition is the strongest tool for delivering affordable prices. An entry level “safety-net” package should be developed.
•	Choice – network topology is central to competition and choice. Designs that foreclose competition should not be accepted. When infrastructure competition is not possible, service competition based on open access and equivalence must be possible.
•	Equivalence in practice – can only be assured by a new and independent body, NBN Australia, with the task of implementing the Open Access and Equivalence Frameworks for Australia’s NBN
•	Customer Experience in the NBN environment must be managed for success, from the initial migration through service contracting to service switching and repair experiences. Service quality and security standards must reflect the key role of the NBN in the lives of all Australians.
•	Ubiquity – all Australians must be connected to the NBN. Ubiquity is not only about network availability but also about affordability and accessibility. When all Australians are connected to the NBN, the real potential of this capability for productivity, growth and innovation will be open to end users in all parts of the economy and community, and in all regions of Australia.

With the future in mind it is interesting to look at where we are at now:
Statistical Snapshot of the Digital Economy in Australia – background paper for the Digital Economy Forum

Australian SME Use of the internet
The Sensis e-Business Report: The Online Experience of Small to Medium Enterprises, July 2008, indicates that during the past 13 years, small to medium enterprises (SMEs) have established internet connections from almost no connections in 1995 to nearly 100% saturation in 2008.
The single most important reason for use of the internet (as identified by 98% of all internet-connected SMEs) remains email (to communicate with clients, customers and suppliers). The second most important use of the internet was to look for information about products and services (89%), while the third highest usage was to get reference information or research data (84%).

Only 55% of SMEs have a website, but another 12% intend to have a website. This indicates that there are still a substantial number of SMEs that could possibly increase their potential/market reach if they were to establish a website.

In terms of website effectiveness, a majority of SMEs (65%) indicated that their website increased their business effectiveness. The reason most SMEs provided was that the website had made it easier for people to access information about their businesses.

The trend in online selling continued to grow during the past year. The percentage of SMEs taking orders online has increased from 48% in 2007 to 54% in 2008.

Online selling as a share of total sales activities saw solid improvement over the course of the year among e-commerce oriented businesses. The proportion of online businesses that indicated they took more than 5% of their total sales orders online increased over the year from 59% in 2007 to 61% in 2008. Some 17% of SMEs who used e-commerce to sell made the majority of their sales online.

July 2008, indicates that the past year has seen solid growth in the use of the internet for procurement purposes. This is reflected in the strong increase from 59% to 67% in the proportion of SMEs that are now placing orders for products and services online over the past year.

The most common online purchases made by SMEs during the year were airline bookings, software, equipment and stock and merchandise.

While 57% of online businesses use e-commerce and a further 9% have indicated that they thought they could use it, some 34% of online SMEs believed they could not use e-commerce.

The number one SME concern in relation to e-commerce was once again security and the ability of people to hack into their systems (46% of SMEs feel that people being able to hack into their computer is a major concern. This has increased by 12% since 2000).

Australian consumers/households use of the internet

ABS data on Internet access at home 2008 shows:

A growing proportion of Australians have access to the internet at home – the rate of access has quadrupled in recent years, from 16% of Australian households in 1998 to 64% in 2006-07.

In just two years, the rate of broadband internet connections increased from 16% of Australian households in 2004-05 to 43% in 2006-07, becoming more prevalent than dial-up connections (20% of households in 2006-07) for the first time.

While people use the internet at home for a variety of purposes, personal and private reasons (including sending and receiving emails and online shopping) were the most common in 2006-07. Almost all (98%) of the 9.9 million Australians who used the internet at home reported using it for this purpose.

Just over half (53%) used the internet for education or study and a similar proportion (52%) used it for work related purposes.

The December 2007 ABS data shows during 2006-07, the proportion of households online in metropolitan areas increased from 19% (in 1998) to 67%, while non-metropolitan areas recorded an increase from 10% (in 1998) to 57%.

In 2006-07, of the estimated 11.3 million people who accessed the internet, 61% used the internet to purchase or order goods or services for private purposes.

Use of the internet by individuals decreased with increasing age, although all age groups recorded strong levels of use except the 65 years and over group (23%). Internet use percentages for the other age groups were: 15 to 17 years (92%), 18 to 24 years (90%), 25 to 34 years (85%), 35 to 44 years (80%), 45 to 54 years (74%), and 55 to 64 years (58%).

Sensis July 2008 data shows the uptake of technology in Australian households was lower than was the case for SMEs. Some 89% of households reported having a computer of some description, with 84% of households being internet enabled and 73% having broadband connections. Overall, 57% of Australians had made purchases online in the past year.

The two major increases in terms of what Australians are doing online from 2007 to 2008 are: online banking (up by 8% from 54% in 2007 to 62% in 2008) and use of the internet to make phone calls (up 8% from 14% in 2007 to 22% in 2008).

The demographic that most influenced use of social networking sites was age, with younger Australians much more likely to use a social networking site. The heaviest users were 14 to 17 year olds, where 91% reported using social networking sites. Usage decreased progressively with age, with only 4% of those aged 65 and above reporting using these sites.

The frequency of usage was also very high, with 17% using them several times a day, and 23% using them daily––overall four in ten users accessing social network sites at least daily. Only 23% reported usage less than once a week.

ACMA Research into communications take-up and use

As part of its research program ACMA is publishing a series of reports on attitudes towards take-up and use of telecommunications services across consumer, small business and the farm sectors of the community. All the reports are available here

Consumer attitudes to take-up and use of Internet Services – pg 16-23

Factors influencing take-up include Income – those earning more than $80,000 a year were more likely to have broadband (79%); occupation – those working in professional or managerial positions were more likely to have broadband (74%); age – those between 18 and 24 were more likely to have broadband (72%).

23% of survey respondents did not have any internet service at home. Of those, a third (7%) plan to connect in the future. 5% of respondents who had an internet service in the household did not use it.

Take-up and use by SME – Internet services page 15- 21

Small business in metro (91%) and non-metro (88%) have similar rates of broadband take-up. Medium businesses in metro (99%) and non-metro (96%) have similar rates of take-up indicating that business size rather than geographic location may be a leading determinant of broadband take-up.

SMEs in the finance and insurance industry sector have the highest take-up (96%) and those in the health and community services sector have the lowest levels of take-up (83%).

Among SMEs without broadband, 38% perceived a lack of broadband availability to be the main reason they had not adopted broadband. The most common other reasons for not taking up broadband related to SMEs own perceptions such as not understanding the value or benefits of broadband to their business or not seeing a need for broadband in their business.

Farming sector attitudes to take-up and use of internet services - pg 9

Data from April 2007 showed that 75% of farm respondents were connected to the internet but were more likely to have a dial-up connection than overall household respondents, with 35% of farm respondents having broadband compared to 68% if overall households.

Farm respondents with the highest internet take-up were based in WA (78%) or SA (77%) were intensive crop farms particularly cotton farms (93%) or were farms with over 2000 hectares (86%). Farm respondents least likely to have connected to the internet were based in Tasmania (66%) or were farms under 400 hectares (66%).

Farms with broadband were more likely to be located in NSW (53%), cotton farms (58%) or 2000 hectares (63%). In contract farms with dial-up or ISDN were more likely to be in Tasmania (70%), beef and cereal farms (55%) or between 400 and 799 hectares (55%).

Farmers are increasingly using the internet for business purposes. Results indicated that 84% used the internet for both business and personal use, 11% solely for business and only 5% only for personal use.

Next Steps

Digital Economy Future Directions Paper

The Digital Economy Future Directions Paper announced by the Minister at the Digital Economy Forum will provide a platform to discuss how Australia can realize the benefits of the NBN and other digital economy investments to become a world leading digital economy. The directions Paper will be published early in 2009.
The Minister said:

"The Government is determined to increase effective use of the internet by consumers and all businesses to drive higher productivity growth and community participation in the digital economy. We need to consider now the potential business models, social and economic challenges, skills and capacity requirements to meet our objective."

ATUG Future Forum on Emerging Issues

In coming months ATUG will be established a Future Forum on Emerging Issues to enable a discussion among members of all the issues involved in creating the capability, confidence and content to realise this vision.

ATUG Broadband Awards

More immediately ATUG has launched its 2009 National Awards for the Effective Use of Broadband. 2009 will see the 3rd annual Broadband Awards. ATUG’s shares the vision that Australia will be a leader in the effective use of broadband. The Awards are designed to raise awareness of the benefits of broadband by focusing on the successful applications of broadband in categories such as Business, Government, Community, Sales/Marketing, Agriculture, Education and Health sectors. Award nominations close on 10th February 2008. Award nominees are asked to provide a non-technical example of effective broadband use via the ATUG website – Click Here. The Awards will be presented at the ATUG 2009 Gala Dinner event on 12th March 2009.