What Do SMEs Want Out Of Broadband?

And are the big telecommunications companies really willing to give it to us?

It’s election time and the political parties and the big telecommunications companies are trying to nail each other on a better broadband network.

But where do WE stand?

Let’s have a look at two articles which appeared in last Tuesday’s Australian Financial Review and see how, in an election year, the broadband plot gets more complex than faster, bigger and cheaper.

Broadband: How Fast Is Enough – Australian Financial Review, 29/5/07

A front page story which appeared last week making the point that some business owners like Andrew Bryson who runs a Morambo Creek vineyard near Padthaway, a small town near the Victoria-South Australia border, are perfectly happy with the broadband connections they already have.

“Andrew Bryson isn’t sure he needs the new, faster broadband connection that the phone companies and the politicians want him to have.”

He’s happy with the ADSL broadband service, (which runs about the same speed as many connections in our big cities), he’s getting from a a small telephone exchange that Telstra built in Keppoch, four kilometres south of his vineyard.

Also speed isn’t such an issue in nearby Mount Gambier where Bill Hood, who runs one of the area’s ISPs, told the AFR that only one or two per cent of his customers want bigger bandwidth.

Those in the area who are too far away from telephone exchanges for ADSL to be viable, take advantage of government subsidised satellite dishes.

It was pointed out in the article that currently most high use broadband users do so privately for watching television and movies, and not by business….

Which helps support an argument by Joshua Gans of the Melbourne Business School at Melbourne University that, rather than a nationwide build out of broadband infrastructure, there should be local targeting of investment, so areas that need and want faster broadband get it, and those that don’t need it don’t get it.

Slow Broadband Hurts SMEs – The Australian Financial Review

Yet, only 15 pages later the newspaper speaks to businesses like Sydney based scenic and trick flight operator, Red Baron, who claim that fast broadband is “fundamental to long-term growth.”

Red Baron’s managing director, Joel Haski told the AFR that through the internet:

“I’ve started getting customers booking from the UK, Sweden, Denmark, Germany and Spain. That’s a result of having the internet and we see that as a key factor to the expansion of our business, to get a more global market and to capture more of the Australian market.”

Other than for marketing, Red Baron use the internet to do resarch, place orders with overseas businesses and check the weather.

The article pointed to a new Australian telecommunications survey of 5000 businesses which found that for SMEs, “price (for 85 per cent) is the key factor when choosing a provider for fixed line and mobile services, while download speed (35 per cent) is the key deciding factor for internet services.”

More to the point, and here’s the bigger contradiction to the previous article, 25 per cent of businesses are using Voice Over Internet Protocol (VoIP, or to be put simply, internet phones) and a 47 per cent of those who don’t already have it, are considering removing their fixed line and replacing it with VoIP to conduct their day to day business communication.

Wow.

Let’s quote ourselves in a Pigs Will Fly posting, Fast and CHEAP Broadband For All:

The whole structure of the market is changing. But the big old carriers ‘don’t get it’.

Voice phone calls, especially fixed land line phone rentals have traditionally been the Telcos’ favorite cash cow but Australians have taken on less profitable mobile phones in a big way.

Also VoIP (internet phones) is catching on, which means even less money for the Telcos.

The network is changing in its nature and the customer or consumer is becoming much more powerful in terms of the applications and services.

For example, Dwight Walker of Orange based company, WWWalker Web Development, told the AFR he got broadband so he could avoid the STD rates of speaking to Sydney by switching to VoIP and also Red Baron are considering to change to VoIP so they can deal with close companies in New Zelaand and the United States.

There, in only two examples, thousands of dollars the big telcos will lose.

Note: We’d link to the actual source pages but The Australian Financial Review’s website makes it almost impossible for bloggers like us to link to their archived stories.