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The internet service market in australia
 

The internet service market in australia

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Latest research relating to the emerging digital economy in Australia. ...

Latest research relating to the emerging digital economy in Australia.

This report examines the changing characteristics of the internet access market in Australia in particular; internet service provider service offerings and consumer participation in the digital economy as represented by increased use of the internet and related online services. It builds on previous research released by the ACMA, particularly the Communications report 2009–10 series, Report 1—Australia in the digital economy:The shift to the online environment and Australia in the digital economy: Consumer engagement in e-commerce, providing updates for key data and trends.

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    The internet service market in australia The internet service market in australia Document Transcript

    • The internet service marketand Australians in the onlineenvironmentJULY 2011communicating | facilitating | regulating
    • Canberra Melbourne SydneyPurple Building Level 44 Level 5Benjamin Offices Melbourne Central Tower The Bay CentreChan Street 360 Elizabeth Street 65 Pirrama RoadBelconnen ACT Melbourne VIC Sydney NSWPO Box 78 PO Box 13112 PO Box Q500Belconnen ACT 2616 Law Courts Queen Victoria Building Melbourne VIC 8010 Sydney NSW 1230T +61 2 6219 5555F +61 2 6219 5353 T +61 3 9963 6800 T +61 2 9334 7700 F +61 3 9963 6899 1800 226 667 TTY 03 9963 6948 F +61 2 9334 7799© Commonwealth of Australia 2011This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproducedby any process without prior written permission from the Commonwealth. Requests and enquiries concerning reproductionand rights should be addressed to the Manager, Editorial Services, Australian Communications and Media Authority,PO Box 13112 Law Courts, Melbourne Vic 8010.Published by the Australian Communications and Media Authority
    • The internet service marketand Australians in the onlineenvironmentJULY 2011
    • ContentsIntroduction 1Summary 2Internet service market 7Overview 7Internet subscribers by technology type 9ADSL 10Mobile wireless and mobile phone handset internet 11Hybrid fibre coaxial (HFC) networks 13Satellite broadband 13Dial-up services 14ISP charging models 15Expanded service offerings 15Bundling 16Enhanced interactive services 17Internet connection speeds 19Internet access devices 20Profile of mobile phone handset internet users 23Emerging internet access devices 24Australians in the online environment 25Location of internet use 25Internet activities by age 26Frequency of internet use 28Online behaviours by frequency of internet use 32Trends to watch in online behaviours 34Online communications—VoIP and instant messaging 34Social networking 34Shopping online 35Online video/audio content 36Volume of data downloaded 38Appendix—Research background and methodology 40Data sources 40Counts of internet subscribers versus counts of internet users 40Data analysis 41Sample size 41Rounding 41Previous ACMA research 41 acma | iii
    • IntroductionThe Australian Communication and Media Authority (the ACMA) is an evidence-basedregulator. As such it has an interest in monitoring and understanding the developingdigital economy and its impact on the industries that it regulates, as well as changingconsumer behaviour in response to services innovation. The intent of the research andreporting is to facilitate:> regulation for the citizen in an IP-based media and communications environment, where usage of voice over internet protocol (VoIP), mobile communications and the internet continues to grow. This in turn provides challenges for safeguards, such as access to the emergency call service and online security> support for consumers in making informed purchasing decisions in an environment of ongoing network, device and service innovation> content regulation in an environment where content is increasingly available via multiple platforms including the internet, mobile and traditional broadcasting networks.This report examines the changing characteristics of the internet access market inAustralia in particular; internet service provider service offerings and consumerparticipation in the digital economy as represented by increased use of the internetand related online services. It builds on previous research released by the ACMA,particularly the Communications report 2009–10 series, Report 1—Australia in thedigital economy: The shift to the online environment and Australia in the digitaleconomy: Consumer engagement in e-commerce, providing updates for key data andtrends.Any comments on this report would be welcomed and can be sent toindustry.reporting@acma.gov.au or mailed to:Manager, Communications Analysis SectionAustralian Communications and Media AuthorityPO Box 13112Law CourtsMelbourne Vic 8010The internet service market in Australia is dynamic, characterised by continualinnovation in internet service provider (ISP) service offerings, take-up of innovativeconsumer access devices and increased participation in the online environment. acma | 1
    • SummaryThe internet service market in Australia is dynamic, characterised by continualinnovation in internet service provider (ISP) offerings, take-up of innovative consumeraccess devices and increased consumer participation in the online environment. Thisreport highlights major developments in this market.Consumers using multiple internet access technologiesAt December 2010, there were nearly 10.4 million active internet subscribers inAustralia using fixed and mobile wireless (dongle, datacard, USB mode) services and8.2 million internet subscribers using mobile phone handsets - across the household,business and government sectors.The availability of internet services over mobile networks continues to grow. Mobilewireless subscriber numbers increased by 49 per cent in the 12 months to December2010, while mobile phone handset subscribers increased at a comparable, but slightlylower, rate (21 per cent over the six months to December 2010).However, growth in these services has not occurred at the expense of fixed-lineaccess technologies, with ADSL subscriber numbers also increasing by seven percent over the 12 month period. Fixed-line internet services continue to play a centralrole in driving the digital economy accounting for the majority (91 per cent) of datadownloads in Australia1. During the December quarter of 2010, nearly 175,000terabytes of data were downloaded via fixed-line services in Australia, compared toless than nine per cent of data downloads occurring via mobile wireless services andjust two per cent via mobile phone handset services.Increased take-up of the internet and frequency of online participationMore Australians are going online and becoming more intensive users of the internet.Nearly 15.1 million (83 per cent) persons aged 14 years and over went online duringthe December quarter of 2010, up from 14.2 million during the same period in 2009. AtDecember 2010, 71 per cent of internet users went online at least once a day,compared to 67 per cent at December 2009 and 63 per cent at December 2008.Australians moving to higher speed internet plansOn average, 18.8 gigabytes of data was downloaded per internet subscriber inAustralia during the December quarter of 2010, roughly equivalent to 120 hours ofstreaming video content on YouTube. This compared to 14.6 gigabytes downloadedduring the December quarter of 2009. This is in part a reflection of increasing activityrelating to downloading or streaming video content. During December 2010, 5.5 millionpersons accessed video streaming sites such as YouTube and Google Video fromhome, compared to 5.1 million during March 2010.To support increasing content downloads and online activities Australian are shifting tohigher speed internet services; 46 per cent of internet subscribers in the householdssector now subscribe to internet services with an advertised maximum downloadspeed of 8Mbps or more, compared to 30 per cent at December 2009.Mobile phone handset internet developing as a complementary serviceWhile most Australians who accessed the internet did so via a computer (96 per centduring December 2010), increasing numbers of consumers are doing so via theirmobile phone handsets. Approximately 3.1 million Australians aged 14 years and overaccessed the internet via their mobile phone handset during December 2010,1 89 per cent when factoring in downloads via mobile phone handsets.2 | acma
    • compared to 1.9 million during December 2009. However, mobile handset internet isdeveloping as a complement to the traditional computer, with 98 per cent of theseinternet users also using the internet via a computer. This is also reflected in the lowerlevels of handset internet users undertaking activities like e-commerce online via theirmobile phones, compared to online activities undertaken via their computers.Consumers appear to be utilising each access device according to a specific need andlifestyle requirement.The internet challenging traditional business modelsAustralians continue to value the internet as an important communication channel butthe manner in which internet users communicate online is changing, with increaseduse of alternative online communications channels such as internet telephony (voiceover internet protocol—VoIP) and social networking. The use of these servicesappears to be affecting traditional online communications via email.During December 2010, 2.3 million Australians aged 14 years and over went online tomake a VoIP call via their computer, 2.3 million used instant messaging and 5.4 millionundertook activities relating to blogging and online communities. The number ofpersons who used such media as a substitute to traditional email usage almostdoubled in the twelve months to December 2010 (1.4 million persons, compared to736,000 persons during December 2009).Australians are also increasingly using the internet to transact online and use theinternet to source and compare services across businesses. For example,approximately 7.4 million Australians accessed retail and auction web sites from homeduring December 2010, compared to 6.8 million during March 2010 and 2.2 millionpersons purchased a good or service directly via the internet during December 2010,compared to nearly 2 million during December 2009. The increasing importance ofe-commerce is further reflected in latest ABS figures which show that just under $143billion worth of internet orders were received by Australian businesses in the 12months to June 2010, an increase of 15 per cent since June 2009.Convergence is also enabling the exploitation of a wider range of consumer electronicdevices to access the internet in addition to the mobile phone handset, with morerecent developments centred on the entry of internet-enabled TV sets into theAustralian market place. These developments are generating significant consumerinterest in accessing a wider range of interactive services via the TV. For example, atDecember 2010, 3.4 million and 2.5 million persons respectively were estimated to beinterested in accessing the internet and making a video call via their TV.This report is part of an ongoing research commitment by the ACMA to identify keytrends in the Australian communications market and its impacts on consumers as theyembrace the digital economy. On the evidence available, Australians are movingincreasingly to adopt and use multiple technologies to access the internet as a corepart of their daily lives. acma | 3
    • 2Table 1 Key indicators—internet subscribers by sector, technology type and maximum advertiseddownload speed Indicator Dec 09 Dec 10 % change Total number of internet subscribers (‘000) 8,951 10,446 17 Internet subscribers by sector Household subscribers (‘000) 7,340 8,149 11 Business and government subscribers (‘000) 1,611 2,298 43 Internet subscribers by technology 3 ADSL subscribers (‘000) 4,178 4,458 7 Mobile wireless broadband subscribers—dongles, 2,838 4,230 49 datacard, USB modem subscribers (‘000) Dial-up subscribers (‘000) 891 707 –21 Other subscribers (cable, fibre, ISDN, satellite, etc) 4 1,044 1,051 1 (‘000) 5 Mobile phone handset internet subscribers (‘000) 6,781 8,197 21 (June 2010) Distribution of household internet subscribers by advertised maximum download speeds Less than 8Mbps (‘000) 5,138 4,400 –14 8Mbps or greater (‘000) 2,202 3,749 70Note: Subscriber counts are for ISPs with 1,000 or more subscribers. Subscriber counts for cable services not separately provided bythe ABS due to confidentiality reasons. Data for mobile phone handset internet subscribers not collected by ABS before June 2010.Sources: ABS, Internet Activity Survey.2 A subscriber differs from a user or person/business as one user may have multiple accounts with a singleISP, or accounts with more than one ISP. Conversely, there are single ISP subscriber accounts that provideinternet access for multiple persons/organisations (e.g. universities). Numbers exclude mobile phonehandset subscribers.3 Includes all copper-based access technologies relating to DSL, ADSL and ADSL2+.4 ABS does not produce separate estimates for cable subscribers due to confidentiality reasons.5 Calculated percentage change relates to six months of data.4 | acma
    • Table 2 Key indicators—volume of data downloaded by internet subscribers in Australia Dec Dec % quarter 09 quarter 10 change Total downloaded (excludes mobile phone handsets) 127,954 191,839 50 (terabytes) Fixed-line networks inc. dial-up 113,704 174,848 54 Mobile wireless broadband 14,251 16,990 19 Mobile phone handset 717 4,029 6 462 (June 2010)Note: Relates to ISPs with 1,000 or more subscribers. Data for mobile phone handset internet subscribers not collected by ABS beforeJune 2010. Sources: Sources: ABS, Internet Activity Survey.Table 3 Key indicators—household consumer take-up and use of the internet Indicator Dec 09 Dec 10 % change 7 Internet users 14 years+ (million) 14.2 15.1 6 Persons 14 years+ with selected internet services in the home 8 ADSL (million) 4.8 6.4 33 Mobile wireless broadband (dongles, datacards, n/a 3.7 n/a USB modems) (million) Mobile phone handset internet users 14 years+ (million) 1.9 3.1 66 Internet users 14 years+ going online via selected consumer access devices Computer (desktop and portable) (million) 12.2 12.9 6 Both mobile phone handset and computer (million) 1.8 3.0 63 Mobile phone handset only (million) 0.030 0.074 147 Internet users 14 years+ going online at 10.4 11.6 11 least once a day (million) Internet users 14 years+ using VoIP via their computer, instant messaging or social networking to communicate 0.74 1.4 90 instead of email (million) Internet users 14 years+ making a online purchase (million) 2.0 2.2 10 Internet users 14 years+ streaming video/TV (million) 1.2 2.7 125 9 Internet users 2 years+ accessing selected March 10 Dec 10 % change categories of website from home 10 Retail shopping/auction websites (million) 6.8 7.4 9 Social networking websites (million) 8.0 8.4 5 11 Internet video distribution sites (million) 5.1 5.5 8n/a: not available.Sources: Roy Morgan Research for estimates about internet users aged 14 years and over.Nielsen Online for website traffic statistics for population aged 2 years and over.6 Calculated percentage change relates to six months of data.7 Internet use from any location during the December quarters of 2009 and 2010.8 Includes all copper-based access technologies relating to DSL, ADSL and ADSL2+.9 Calculated percentage change relates to nine months of data.10 Refers to websites classified as ‘mass merchandiser’ by Nielsen Online.11 Refers to selected online video distribution sites (Table 9). acma | 5
    • Table 4 Key indicators—select online activities undertaken by access device during December 2010 Mobile phone Computer (desktop Indicator handset (%) and portable, %) Research and information activities 43 75 Communication activities (email/VoIP/ instant messaging) 53 75 Banking and finance 23 67 Entertainment and amusement activities 36 50 Buying, selling, shopping 10 35Note: Relates to internet users aged 14 years+. Source: Roy Morgan Single Source.6 | acma
    • Internet service marketOverviewAt December 2010, there were 10.4 million active internet subscribers in Australia, 12across the government, business and household sectors. This represents nearly a10 per cent increase on the June 2010 figure of 9.5 million subscribers and a 17 per 13cent increase on the December 2009 figure of 9 million. In addition, the ABS reportsthat there were 8.2 million mobile phone handset internet subscribers in Australia atDecember 2010, a 21 per cent increase on the 6.8 million subscribers recorded at 14June 2010.Household internet subscribers accounted for 78 per cent of the total number ofinternet subscribers in Australia at December 2010, a two percentage point decline 15since June 2010. The remaining 22 per cent of subscribers were accounted for bythe business and government sectors (Figure 1).Figure 1 Distribution of internet subscribers by household, business and government sectors Business and government subscribers Household subscribers 100 % of total number of internet subscribers 90 80 70 60 82 80 78 84 50 40 30 20 10 18 20 22 16 0 Jun 2009 Dec 2009 Jun 2010 Dec 2010 Quarter endingNote: Figures are for ISPs with more than 1,000 subscribers. Excludes mobile handset internet subscribers.Source: ABS, 8153.0–Internet Activity, Australia, December 2010.The shift away from dial-up internet access has continued, with broadbandconnections (offering advertised maximum download speeds of 256kbs or greater)12 A subscriber differs from a user or person/business as one user may have multiple accounts with a singleISP, or accounts with more than one ISP. Conversely, there are single ISP subscriber accounts that provideinternet access for multiple persons/organisations (e.g. universities). Numbers exclude mobile phonehandset subscribers.13 ABS, 8153.0–Internet Activity, Australia, December 2010.14 ABS did not collect statistics on the number of mobile phone handset subscribers prior to June 2010.Includes payment plans that provide internet access whether or not used.15 Excludes mobile phone handset subscribers as ABS does not collect subscriber counts for business,government and household sectors separately. acma | 7
    • making up 93 per cent of the total number of internet subscribers in Australia atDecember 2010, compared to 92 per cent at June 2010 and 90 per cent at December2009. At December 2010, approximately 94 per cent of household subscribers wereclassified by the ABS as broadband subscribers compared to 92 per cent for business 16and government subscribers.The ISP sector in Australia has been identified as the fastest growing sector in thetelecommunications industry. IBISWorld reports a 3.9 per cent per annum growth inindustry revenue for this sector for the five years to 2010–11 largely driven by 17increased adoption of higher speed broadband services. The ABS reports that at theend of December 2010, there were 104 ISPs operating in the Australian market with1,000 or more subscribers, which shows a marginal decline from the 107 recorded atJune 2010. The decrease could be a reflection of a number of prominent mergers andtakeovers occurring in the Australian market, such as iiNET’s takeover of AAPT’sresidential services, and a general trend to industry consolidation in an attempt to take 18advantage of economies of scale. There were 12 ISPs operating in the Australianinternet service market with more than 100,000 subscribers. The market is dominatedby four ISPs: Telstra (BigPond), Optus, TPG and iiNet. Table 5 provides a snapshot ofthe number of internet services in operation for each of these ISPs.Table 5 Services in operation (SIO) for key internet service providers in Australia ISP Internet SIO, 31 December 2010 19 Telstra (BigPond) 3.551 million fixed internet subscribers including: > 2.394 million retail broadband services > 919,000 wholesale broadband services > 238,000 dial-up services 1.318 million ISDN access (basic access line equivalents) 2.167 million mobile wireless broadband services (datacards). 1.011 million fixed internet subscribers including: 20 21 Optus > 946,000 HFC, ULL and business-grade broadband 1.19 million mobile wireless broadband subscribers* 22 † iiNet 650,000 broadband subscribers 23 ‡ TPG 516,000 broadband subscribers*Wireless broadband subscribers are defined as those provisioned with a High Speed Packet Access (HSPA) broadband service.Excludes data packs attached to voice services. †Includes acquisition of AAPT’s Consumer Division in September 2010. ‡TPG Figuresare at January 2011 and include on-net bundle, on-net and off-net services. Note: Table excludes 3G mobile phone handset services.HFC refers to hybrid fibre coaxial cable.16 ABS, 8153.0–Internet Activity, Australia, December 2010.17 IBISWorld, IBISWorld Industry Report J7124: Internet Service Providers in Australia, February 2011.18 ACMA report, Communications report 2009–10 series, Report 4—Changing business models in theAustralian communications and media sectors: Challenges and response strategies, January 2011.19 Telstra, Telstra Corporation Limited Financial Results for the Half Year ended 31 December 2010,www.telstra.com.au/abouttelstra/investor/financial-information/financial-results/index.htm, 10 February 2011.20 SingTel, Management discussion and analysis of financial condition, results of operations and cash flows.For the third quarter and nine months ended 31 December 2010www.optus.com.au/aboutoptus/About+Optus/Media+Centre/Financial+Results/Financial+Results+-+The+SingTel+Group, 10 February 2011.21 ULL refers to unconditioned local loop. This involves use of unconditioned communications over copperwire pairs between boundaries of a telecommunications network at a customer’s premises and a point ofconnection with a service provider—usually other than the owner of the unconditioned network.22 iinet, iinet delivers another strong set of results , www.iinet.net.au/press/releases/110221-half-year-results.html, 21 February 2011.23 TPG Telecom,1, 2011 Half-year results presentation, www.tpg.com.au/about/investorrelations.php,accessed 22 March 2011.8 | acma
    • Internet subscribers by technology typeGrowth in internet subscribers in Australia continues to be dominated by mobilewireless broadband (dongle, datacard and USB modem based services), whichincreased by 49 per cent in the 12 months to December 2010. However, the increasein mobile wireless broadband subscriber numbers has not been at the expense ofmainstream fixed-line services with ADSL subscribers (covering all copper basedaccess technologies relating to DSL, ADSL and ADSL2+) increasing by approximatelyseven per cent during the same period. Mobile wireless broadband has continued togain in popularity such that subscriber numbers are now marginally below ADSLsubscriber numbers (see Figure 2). At the end of December 2010, ADSL accountedfor 43 per cent of all internet subscribers in Australia marginally down from 44 per centat the end of June 2010. In comparison, mobile wireless broadband subscribersaccounted for 40 per cent of all internet subscribers, up from 36 per cent at the end ofJune 2010.Figure 2 Non-dial-up internet subscribers, ADSL versus mobile wireless broadband ADSL Mobile wireless* 5,000 4,458 4,171 4,178 4,212 4,230 4,000 3,453 Number of subscribers (000) 2,838 3,000 2,024 2,000 1,000 0 Jun 2009 Dec 2010 Jun 2010 Dec 2010 Quarter ending*Mobile wireless broadband includes services provided via dongles, datacards and USB modems. Excludes mobile handset internet.Relates to ISPs with 1,000 or more subscribers. Includes household, business and government sectors.Source: ABS, 8153.0–Internet Activity, Australia, December 2010.Australian household consumers have access to a range of relatively high-speedinternet services in the home. Of these services, ADSL, mobile wireless broadbandand mobile phone handset internet are the most frequently reported internet accesstechnologies available in the home (see Figure 3).Approximately 14 per cent of the total population aged 14 years and over (2.6 millionpersons) did not have access to the internet at home nor use it via a mobile phonehandset. Key characteristics of this group included:> 53 per cent were aged 55 years or more> 62 per cent had personal annual incomes of less than $25,000.Consumers in non-capital city areas were more likely to not have internet access athome or use the internet via a mobile phone handset. During December 2010, 18 per acma | 9
    • cent of the population aged 14 years and over in non capital city areas did not haveaccess to the internet at home or use the internet via a mobile phone compared to 12per cent for capital cities.However it should be noted that 31 per cent of these persons made use of the internetoutside their home at locations such as work, an education institution, a public libraryor a friends’ house; a factor also likely to contribute to their decision not to have a 24home internet connection. Data for June 2010 identified the main reasons quoted forconsumers deciding not to connect to the internet at home. Approximately 50 per centof persons without some form of internet access in their home at June 2010 reportedthat the internet was not relevant to their lifestyle and 42 per cent cited that the cost of 25connecting to the internet at home was too expensive.Figure 3 Internet access available in Australian households, December 2010 ADSL 35 Mobile wireless broadband* 20 Access internet via mobile phone handset 17 Cable 12 Dial-up internet 6 ISDN 2 Satellite 1 No internet access at home and do not use 14 internet via mobile phone handset 0 5 10 15 20 25 30 35 40 % of total population aged 14 years+Note: Multiple responses allowed.*Includes services provided via dongles, datacards and USB modems. Excludes internet use via mobile phone handset.Source: Roy Morgan Single Source, December 2010.ADSLADSL broadband (covering all copper-based access technologies relating to DSL,ADSL and ADSL2+) is the most common internet connection platform used byAustralian internet subscribers, accounting for 4.46 million (business, government and 26households) at December 2010. At this time, approximately 35 per cent of householdconsumers aged 14 years and over (6.4 million persons) had access to an ADSLservice in their home (see Figure 3).24 Roy Morgan Single Source, December 2010.25 Roy Morgan Single Source, June 2010.26 ABS, 8153.0–Internet Activity, Australia, December 2011.10 | acma
    • Adoption of ADSL services has been facilitated by a number of ISPs rolling out theirown digital subscriber line access multiplexers (DSLAMS) into Telstra exchanges. Thishas enabled these ISPs to provide internet services using unconditioned local loop 27lines. Nearly all these lines (97 per cent at June 2010) were located in exchanges in 28central business districts and major metropolitan areas. However, Telstra continuesto provide the infrastructure upon which much of Australia’s internet access is madeavailable. At December 2010, approximately 67 per cent of ADSL services in operation 29in Australia were provided through Telstra’s wholesale and retail services.Competition among ADSL providers is intense, according to Market Clarity,approximately 85 per cent of ISPs offered ADSL broadband services in July 2010.Approximately 39 per cent of ISPs offering ADSL services also offered higher 30bandwidth ADSL2+ services, predominantly in areas of high population density.Naked DSL, which provides a fixed-line broadband internet service without connectionto an analogue telephony service, has been available in Australia since 2007 and iscurrently offered by many ISPs, some of which bundle the service with free or low costVoIP calls. Availability of naked DSL is restricted to those areas that are serviced byan ADSL2+ exchange and is therefore more likely to be adopted by consumers livingin metropolitan areas.Mobile wireless and mobile phone handset internetThrough 3G mobile phone networks, Australians are able to access internet serviceseither via a mobile wireless broadband service using a dongle, datacard or USBmodem connected to a computer or via an internet-enabled mobile phone handset.The combined coverage of 3G networks was reported to be in excess of 99 per cent of 31the Australian population at June 2010.At December 2010, there were 4.2 million mobile wireless broadband subscribers and8.2 million mobile phone handset internet subscribers (mobile phone payment planswhich provide internet access whether or not used) in Australia across the business, 32government and household sectors.The increasing penetration of mobile wireless and mobile phone handset internetservices among Australian household consumers’ internet access choices is furtherreflected in consumer survey data. At December 2010, 20 per cent of persons aged 14years and over (3.7 million persons) were estimated to use a mobile wirelessbroadband service via a dongle, datacard or USB modem at home. In addition, 3.1million persons aged 14 years and over used the internet directly via their mobilephone handset during December 2010 compared to 1.9 million during December 332009.The majority of mobile wireless broadband users (dongle, datacard or USB modemservices) did not utilise other internet access technologies in the home while 22 percent accessed the internet via their mobile phone handset; three per cent had an27 This involves using unconditioned communications over copper wire pairs between boundaries of atelecommunications network at a customer’s premises and a point of connection with a service provider—usually other than the owner of the unconditioned network.28 ACMA, Communications report, 2009–10, December 2010.29 ACCC, Snapshot of Telstra’s customer access network as at 30 December 2010,www.accc.gov.au/content/index.phtml/itemId/853523, accessed 11 April 2011.30 Market Clarity Database, July 2010.31 ACMA, Communications report 2009–10, December 2010.32 ABS, 8153.0–Internet Activity, Australia, December 2011.33 Roy Morgan Single Source, December 2010. acma | 11
    • ADSL service in the home and one per cent a cable service. For persons with accessto a mobile wireless broadband service in the home:> 59 per cent resided in capital cities> 50 per cent were aged 25–49 years 34> 65 per cent made use of internet access at sites outside of the home.In comparison, nearly 90 per cent of users of the internet via a mobile phone handsethad other internet access technologies in their home; 42 per cent an ADSL service, 27per cent a mobile wireless service (dongle, datacard or USB modem) and 14 per centa cable service. The high level of crossover between mobile phone internet use anduse of other internet access services could be attributed to a number of factors. Theseinclude perceived functionality of mobile handsets relative to computers (screen andkey board size for example) and the higher costs associated with accessing the 35internet via mobile phone handsets in comparison to other services. Approximately11 per cent of mobile phone handset internet users did not have access to otherinternet technologies in their home. Key characteristics of these persons included:> 66 per cent resided in capital cities> 57 per cent were female 36> 70 per cent were aged 18–34 years.Price reductions, increases in maximum data speeds and the expansion of availablebandwidth may have contributed to a rise in the number of mobile wireless 37connections in the past year. However, according to research by Market Clarity,mobile internet access (covering dongle, datacard, USB modem and mobile phonehandset services) continues to be more expensive than fixed-line internet services withlarge variations in prices for services between:> internet service providers 38> prepaid and post-paid payment plans.High demand for mobile broadband services has also encouraged the industry toharness new technologies, such as long-term evolution (LTE), and to develop an 39advanced and competitive wireless infrastructure. In February 2011, Telstraannounced that it would upgrade its 3G network with LTE technology in the central 40business districts of Australia’s capital cities and selected regional centres. Futurenetwork expansions are expected, with both Optus and Telstra announcing plans toenhance wireless broadband capacity in regional and rural Australia through the 41acquisition of additional licences on the 2.1GHz band. For further information on34 Roy Morgan Single Source, December 2010.35 For example, 3G services such as mobile phone handset internet often attract higher charges when usedvia a prepaid plan. See ACMA, Communications report 2009–10 series, Report 2—Take-up and use ofvoice services by Australian consumers, November 2010.36 Roy Morgan Single Source, December 2010.37 ACMA, Communications report 2009–10, December 2010.38 Market Clarity, The Cost of Mobility: Comparing the Value of Fixed and Mobile Broadband, May 2011.39 Long-term evolution (LTE) is a wireless broadband technology widely promoted as the successor to 3G. Itpotentially provides much faster data rates for both uploading and downloading, transmitting data attheoretical peak speeds of 340Mbit/s; Ovum, Straight talk: LTE Focus, Telecoms Q1 2010.40 Telstra, Telstra to launch 4G mobile broadband network by end 2011,www.telstra.com.au/abouttelstra/media-centre/announcements/telstra-to-launch-4g-mobile-broadband-network-by-end-2011.xml, 15 February 2011.41 Optus, Optus to acquire new 2100 MHz spectrum licences to increase 3G mobile capacity in regionalAustralia, 14 July 2010,www.optus.com.au/aboutoptus/About+Optus/Media+Centre/Media+Releases/2010/Optus+first+to+acquire+new+2100MHz+spectrum+licences+to+increase+3G+mobile+capacity+in+regional+Australia, accessed12 | acma
    • emerging wireless technologies, see the ACMA’s 2010 report Technology 42developments in the digital economy.Hybrid fibre coaxial (HFC) networksHFC, or cable internet, services are operated in Australia by Optus, Telstra andNeighbourhood Cable, providing bandwidth typically of up to 30 Mbps. Together,Telstra and Optus’s HFC networks pass over 2.7 million homes in Melbourne, Sydney, 43Adelaide, Brisbane, the Gold Coast and Perth. Neighbourhood Cable, a subsidiary ofCanberra-based TransACT Communications, operates in regional Victoria, reaching 44over 90,000 households in Mildura, Ballarat and Geelong.New HFC technologies such as DOCSIS 3.0 offer much higher speeds, reaching up to100 Mbit/s, and are currently available in selected parts of Melbourne, Brisbane and 45Sydney through the Telstra and Optus networks. Neighbourhood Cable also offers 46DOCSIS in selected areas of rural Victoria, including Ballarat, Geelong and Mildura.According to the ABS, there were 909,000 cable and fibre subscribers in Australia atDecember 2009 covering the business, government and household sectors (figures for 47December 2010 not reported separately by ABS for confidentiality reasons).Consumer survey data shows that approximately 12 per cent of the Australianpopulation aged 14 years and over (2.1 million persons) had access to a cable internetservice in the home at December 2010 (see Figure 3).Satellite broadbandSatellite broadband is an internet service connected via satellite. It is available acrossAustralia’s entire land area but—due to its higher cost to consumers and problemswith latency and speed—is chiefly used in areas with poor or no coverage from other 48service delivery platforms. At June 2010, satellite internet services were provided by 4935 ISPs and accounted for less than two per cent of internet subscribers in 50Australia. On 1 July 2011, the National Broadband Network (NBN) interim satelliteservice to rural and remote areas became available. The service from Optus and 51IPStar is expected to offer peak speeds of 6 Mbps downlink and 1 Mbps uplink. AtDecember 2010, approximately 163,000 household consumers aged 14 years and 52over had a satellite internet service at home. ABS reports that at June 2010, there27 October 2010; Telstra, Telstra to boost wireless broadband capacity in regional Australia,www.telstra.com.au/abouttelstra/media-centre/announcements/telstra-to-boost-wireless-broadband-capacity-in-regional-australia-.xml, 25 October 2010.42 ACMA, Technology developments in the digital economy,www.acma.gov.au/WEB/STANDARD/pc=PC_312249, August 2010.43 ACMA, Communications report 2009–10, December 2010.44 www.ncable.net.au/_site/about.asp?cat=19, accessed 17 June 2010.45 Telstra, www.telstra.com.au/bigpond-internet/cable/, accessed 10 June 2010; Optus,www.optus.com.au/aboutoptus/About+Optus/Media+Centre/Media+Releases/2010/Optus+upgrades+cable+broadband+to+deliver+supersonic+speeds+in+Brisbane,+Melbourne+and+Sydney, accessed 27 October2010.46 Neighbourhood Cable, Neighbourhood Cable to upgrade its network to DOCSIS 3.0,www.ncable.net.au/_site/feature-single.asp?ID=81, accessed 27 May 2010.47 ABS, 8153.0–Internet Activity, Australia, December 2009.48 For example, one ISP charges four times more for the same amount of data delivered via satellite than viathe wireless network.49 Market Clarity Database, July 2010.50 ABS, 8153.0–Internet Activity, Australia, June 2010.51 http://www.arnnet.com.au/article/392175/nbn_co_kicks_off_interim_satellite_services/, accessed 1 July2011.52 Roy Morgan Single Source, December 2010. acma | 13
    • were 111,000 satellite internet subscribers across the household, business and 53government sectors.Dial-up servicesDial-up services connect the subscriber to the internet via a dial-up modem andsoftware using the public switched telephone network. The ABS reported that atDecember 2010, there were 707,000 dial-up internet subscribers in Australia acrossthe business, government and household sectors. At December 2010, an estimated1.2 million persons in Australia aged 14 years and over (6 per cent of the population)had a dial-up internet service in their home.> 54 per cent of these persons resided in capital cities> 52 per cent were aged 50 years or older, while 54> 47 per cent used the internet from locations outside the home.Nearly 980,000 Australians aged 14 years and over only had access to a dial-upinternet service in the home and did not use internet via a mobile phone handset. Interms of regional variations, 7 per cent of persons aged 14 years and over residing innon-capital city areas only had a dial-up internet service in the home and did not use 55the internet via a mobile handset compared to 5 per cent for capital cities.In addition to dial-up, approximately 418,000 persons in Australia aged 14 years andover were estimated to have access to an internet service via the integrated services 56digital network (ISDN), 2 per cent of the population.53 ABS did not publish satellite internet subscriber numbers separately for December 2010.54 Roy Morgan Single Source, December 2010.55 ibid.56 Roy Morgan Single Source, January−December 2010.14 | acma
    • ISP charging modelsWithin the competitive Australian internet service environment, ISPs typically makehousehold broadband available to consumers under a variety of plans, with dataallowances changed according to connection type; data speed; price level; andwhether the plan is prepaid, post-paid or bundled with other services. Australian ISPs’usual charging models are outlined in Table 6.Table 6 Typical Australian ISP charging models Charging model Description of plan Post-paid cap, Service is offered under a fixed-term contract (from one month to 36 months in fixed contract length) for a set price each month, which includes a monthly data allowance that may be divided into peak and off-peak times (determined by the ISP). Once the monthly data allowance is reached or exceeded, data speeds may be slowed (‘shaped’) and/or an excess usage fee charged. Usage of data above the nominated amount per billing period may be charged at an alternative rate. Post-paid cap, As above, without a fixed-term contract. Costs per megabit are typically higher no fixed contract than those charged under a contract. Prepaid Service is offered for a set period (between one month and one year) with a set data allowance. Data access typically stops once the data allowance is reached or the specified set period has lapsed, unless the account is recharged. Prepaid internet is most commonly offered for mobile/wireless broadband services. Pay-as-you-go Service is charged on a per megabit basis, typically at a considerably higher rate than other plans and as an add-on to another service, such as a mobile phone plan. Available with or without a contract. Bundled plans Service is provided on a post-paid plan, bundled with another service or services for an overall lower cost than if the services were purchased separately. The bundled services (internet, fixed-line telephone, mobile phone and subscription television) are most commonly provided by one company or partner companies. These plans are usually established on a fixed-term contract for the bundled services.ACMA consumer survey data shows that financial considerations appear to be thestrongest driver in consumer selection of an internet service provider (ISP) for a homeinternet service, with 45 per cent of survey respondents citing ‘price’ as the reason fortheir ISP choice. Service speed (25 per cent) and download limits (16 per cent) werealso commonly cited, while package deals such as bundling were mentioned by 13 per 57cent of respondents.Expanded service offeringsIn addition to continued innovation in pricing of internet access services, ISPs havesought to retain market share through service innovation, especially the bundling ofvoice and content services to customers (Figure 4). The majority of ISPs have movedbeyond the traditional single service provider model, diversifying their product offeringsto provide additional services in conjunction with internet access. Most commonly, 58ISPs offer internet access as only one component of a multi-part package or bundle ,which may offer incentives such as free or discounted voice services, or free line 59rental. Internet security services, subscription television packages, VoIP and mobilephones are among other products offered by ISPs, either individually (such as a web-57 ACMA-unpublished data, November 2009.58 The practice of joining related products together for the purpose of selling them as a single product.Bundling arrangements usually feature special pricing arrangements that make it cheaper for consumers tobuy products and services as a bundle rather than individually.59 For example, at 11 April 2011, an ISP was offering a broadband service with free or $1.00 line rental. acma | 15
    • connected fixed-line telephone) or bundled with another service in return for an overalldiscount. The ABS reports that at December 2010, 71 per cent of ISPs offeredadditional services to subscribers, most commonly email content filtering products,VoIP (60 per cent) and home telephone services (49 per cent).Figure 4 Additional services offered to internet subscribers by Australian ISPs, December 2010 Email content filtering services 71 VoIP 60 Home telephone 49 Free SPAM Filter 45 Mobile telephone 33 Naked DSL 33 Web content filtering services 26 No services offered 11 Other services offered 10 IPTV 6 0 20 40 60 80 100 % of ISPsIn addition, several ISPs have partnered with internet content providers, offering freedownloads from specific websites as part of their business models. For example, theAustralian Broadcasting Commission (ABC) content is available as unmetereddownloads to iiNet and Internode users, providing the ABC with access to a potentiallywider online audience, and the ISPs with an additional method of retaining customersor attracting potential customers. Further details of content provision by internetservice providers are provided in the ACMA’s 2010 report IPTV and internet video 60delivery models: Video content services over IP in Australia.BundlingAt December 2010, approximately 42 per cent of households (3.5 million households)in Australia were estimated to have two or more telecommunications services provided 61via a bundling arrangement with their telecommunication service provider. Seventy-eight per cent of these households included their internet access as part of thebundling arrangement with their communication service provider. Discounts, value-formoney and convenience of dealing with a single service provider are the main driversfor consumers when considering bundling telecommunication services. Twenty-six percent of households with two or more telecommunication services bundled atDecember 2010, identified financial discounts as the main benefit from servicebundling, 25 per cent identified convenience of dealing with a single service providerfor billing purposes, 22 per cent access to free services (for example, free local or60 This report is available at www.acma.gov.au/WEB/STANDARD/pc=PC_312195.61 Roy Morgan Single Source. Percentage is of all households with or without a fixed-line telephoneservice.16 | acma
    • mobile calls) and 18 per cent convenience of dealing with one service provider for 62enquiries, complaints and other issues (18 per cent) (see Figure 5).The ACMA’s draft Reconnecting the Customer Inquiry report noted that: While these offers can deliver real benefits to consumers, particularly savings and convenience, some submitters to the inquiry claim they add to the complexity that consumers must face in the market. Some service providers use bundling arrangements to shift their customers to higher value content and data services. They also operate as a heightened disincentive to switching for all consumers, including 63 those who are dissatisfied.Figure 5 Consumer perceptions of the main benefits of bundling telecommunication services,December 2010 Financial discounts (e.g.% off my bill or connection fees) 26 Convenience of dealing with one provider for billing 25 Free services (e.g. Free local or mobile calls, SMS etc) 22 Convenience of dealing with one provider for enquiries, complaints and other issues 18 Other incentive 8 Not sure of the benefits 5 Do not receive any benefits 2 0 5 10 15 20 25 30 % of households bundling two or more telecommunication servicesSource: Roy Morgan Single Source.Enhanced interactive servicesTechnological convergence has transformed traditional telecommunication networksand consumer access devices allowing service providers to deliver triple play 64services to consumers through communication devices such as mobile phonehandsets. However, convergence is also enabling the exploitation of a wider range ofconsumer electronic devices, with more recent developments centred on the traditional 65television (TV) set—as evidenced by the entry of internet televisions into the62 Roy Morgan Single Source.63 ACMA, Reconnecting the Customer draft public inquiry report, June 2011,engage.acma.gov.au/reconnecting.64 Voice, data and video.65 ‘An internet-enabled TV is factory-designed to connect directly to the web and display content such asYouTube videos, weather reports and streaming movies or television shows. These sets differ fromtelevisions that double as computer monitors—although many can do that as well—because no computer oroutside equipment is required to display the web-based content.’ Seehttp://tv.about.com/od/frequentlyaskedquestions/f/InternetTVFAQ.htm, accessed 27 May 2011. acma | 17
    • Australian marketplace and recently reported industry plans to expand delivery of TV 66content via the internet to Australians homes.As communications and media players, such as ISPs, seek to expand their serviceofferings the prospects of delivering internet and interactive services to households 67through the next generation of TV sets is increasingly a reality. The delivery of anexpanded array of interactive services to consumers through TV sets is dependent ona range of factors, with consumer interest in accessing these services (Figure 6) beinga critical factor in the ongoing transformation of digital media service delivery toAustralian homes. While the majority of Australians aged 14 years or over currentlyhave limited or no interest in accessing the internet or related services through theirhome TV, a sizeable minority of the population were for example estimated to beinterested in accessing the internet (18 per cent—3.4 million persons) and makingvideo calls directly via their TV (14 per cent—2.5 million persons). As with anyemerging technology or service, usage is expected to increase as the cost of theinternet-enabled TVs declines and the provision of service offerings and consumerawareness increases.Figure 6 Consumer use of, and attitudes to, enhanced television service offerings, December 2010 Already do Would like to do Not interested Cant say 100 90 19 18 19 19 19 16 16 % of total population aged 14 years+ 24 80 70 40 60 48 50 61 61 70 67 62 73 40 30 30 25 20 12 10 18 6 14 11 12 14 5 9 7 0 Pay to access Pay to access Do my Make video Use my TV to Network my Set up my TV Pause or sporting movies on shopping and calls through access the TV to a recording via rewind live TV events on demand access my TV internet computer the internet programs demand information on device to play while watching goods & music, photos TV services or videos through my TVSource: Roy Morgan Single Source.66 Lara Sinclair, ‘Optus set to bring TV into the home via internet’, The Australian, 16 May 2011,www.theaustralian.com.au/business/media/optus-set-to-bring-tv-into-the-home-via-internet/story-e6frg996-1226056329073, accessed 27 May 2011.67 ACMA, IPTV and internet video delivery models: Video content services over IP in Australia, June 2010.18 | acma
    • Internet connection speedsConnection speeds offered by ISPs in Australia vary significantly according toconnection type and access technology. While ongoing developments in wirelesstechnology are increasing data rates, fixed-line broadband continue to offer users thehigher download speeds. Figures 7 and 8 present an overview of the changingcomposition of household and business/government internet subscriber market inAustralia by advertised download speed.In the household sector, there is a shift to higher speed internet services, specifically1.5 Mbps or greater, and a parallel decline in dial-up and lower speed broadbandservices. At December 2010, household internet subscribers with advertised maximumdownload speeds of 1.5 Mbps to fewer than 8 Mbps accounted for 35 per cent of totalhousehold subscribers (compared to 33 per cent at June 2010 and 31 per cent atDecember 2009). Households with speeds of 8 Mbps or more accounted for 45 percent of subscribers at December 2010 (compared to 38 per cent at June 2010 and30 per cent at December 2009).The overall increase in take-up of services with higher download speeds appearsdriven by a combination of factors, including upgrading of network capacity (in thecase of mobile networks) and ongoing reductions in data download unit prices,particularly for high-speed services where competition has intensified.68 The trendtowards downloading increasing amounts of data and accessing high bandwidthservices such as video streaming and movie downloads is also likely to influencehousehold consumer decisions to upgrade to higher speed internet services. (This isdiscussed further on pages 36 to 38.)Figure 7 Household internet subscribers by advertised maximum download speed Less than 256 Kbps 256 Kbps to less than 512 Kbps 512 Kbps to less than 1.5 Mbps 1.5 Mbps to less than 8 Mbps 8 Mbps to less than 24 Mbps 24 Mbps or greater 100 6 6 8 % of household internet subscribers 10 90 80 23 24 30 70 35 60 26 31 50 33 40 35 15 30 16 20 17 16 13 10 10 5 3 13 10 8 6 0 Jun 2009 Dec 2009 Jun 2010 Dec 2010 Quarter endingNote: Figures are for ISPs with more than 1,000 subscribers. Excludes mobile handset internet subscribers. In some cases, figures maynot add up to 100 per cent due to rounding.Source: ABS, 8153.0–Internet Activity, Australia, December 2010.68 Venture Consulting, Internet Industry Association Broadband Index, 9th Edition, November 2009, atwww.iia.net.au/index.php/initiatives/786-australias-upside-down-broadband-market.html, accessed 14December 2010. acma | 19
    • In the business and government sectors, the growth in internet subscriber market hasoccurred in services with advertised maximum download speeds of 8 Mbps or greaterwith these services accounting for 33 per cent of internet subscribers in this sector atDecember 2010 compared to 20 per cent at June 2010 and 15 per cent at December2009 (Figure 8).Figure 8 Business/government internet subscribers by advertised maximum download speed Less than 256 Kbps 256 Kkbps to less than 512 Kbps 512 Kbps to less than 1.5Mbps % of business and government internet subscribers 1.5 Mbps to less than 8 Mbps 8 Mbps to less than 24 Mbps 24 Mbps or greater 100 3 2 2 3 90 11 13 18 80 30 70 60 50 56 50 55 40 51 30 12 10 20 9 11 7 5 10 4 2 15 12 10 8 0 Jun 2009 Dec 2009 Jun 2010 Dec 2010 Quarter endingNote: Figures are for ISPs with more than 1,000 subscribers. Excludes mobile handset internet subscribers.Source: ABS, 8153.0–Internet Activity, Australia, December 2010.Internet access devicesWhile internet-enabled mobile handsets and tablet PCs are becoming increasinglypopular, the desktop or laptop computer—when connected to a fixed-line—remainsthe primary access device through which most of Australia’s data traffic flows(Figure 9). Ninety-six per cent of internet users aged 14 years and over in Australiawent online via a desktop or portable computer at December 2010, consistent with97 per cent recorded at December 2009. However, mobile phone handset internetusage has seen significant increases in Australia, perhaps reflecting continuedinnovation in mobile handset technology, network performance and service pricing.During December 2010, 23 per cent of internet users in Australia aged 14 years andover were estimated to have used the internet via their mobile phone handsetcompared to an estimated 15 per cent during December 2009 (Figure 9). However,this has not been at the expense of use of computers, with nearly 98 per cent ofmobile handset internet users also accessing the internet via a desktop or portablecomputer. This suggests mobile phone handset internet services are developing as acomplementary service and not as a substitute to traditional computer based internet 69access.69 Roy Morgan Single Source, December 2010.20 | acma
    • Figure 9 Personal internet access devices used during December 2009 and 2010 Dec-09 Dec-10 100 97 96 90 % of internet users aged 14 years+ 80 70 60 50 40 30 23 23 20 15 15 10 0 Mobile handset Computer Both mobile handset and computerNote: Multiple responses allowed. Computer also includes laptops.Source: Roy Morgan Single Source, December 2010.The complementary nature of these two internet access devices is further reflected inthe type of activities undertaken online via these devices. The proportion of mobilephone handset internet users undertaking online activities via their handsets wassignificantly lower than levels reported by computer internet users (Figure 10). Forexample:> only 10 per cent of mobile phone handset internet users undertook e-commerce activities (buying, selling, shopping), online via their mobile handsets during December 2010, compared to 35 per cent for persons using the internet via a computer> 23 per cent of mobile phone handset internet users undertook banking or financial related activities online via their handsets compared to 67 per cent for persons using the internet via a computer.Social networking was the only identified area of online activity where proportionallythe level of activity undertaken via mobile phone handsets during the month ofDecember 2010 was comparable to levels recorded via computers (39 per cent and41 per cent respectively). acma | 21
    • Figure 10 Activities* undertaken online by consumer access device during December 2010 Online activities via computer Online activities via mobile phone handset Research & information 75 43 Communication activities (email, internet 75 telephony, instant messaging) 53 Banking & finance 67 23 General activities (browsing/surfing) 62 43 Entertainment & amusement activities 50 36 Activities relating to blogging and online 41 communities (inc. social networking) 39 Buying, selling, shopping activities 35 10 Advertising-related** 33 11 Other interactive activities *** 26 5 0 20 40 60 80 % of internet users aged 14 years+*Relates to activities undertaken from any location.**Refers to viewing advertisements online or accessing websites as a result of off-line advertising.***Refers to entering competitions, registering at a website or creating or managing one’s own website.Note: The category ‘computer’ includes desktop or portable computers.Source: Roy Morgan Single Source, December 2010.It should be recognised that some activities are less suited or impractical to accessonline via mobile phones compared to computers. For example, when examining thetype of information accessed online, online information activities via mobile phonehandsets are mainly focused on a narrower set of activities compared to computeruse. These include accessing information about the weather (55 per cent of mobilephone handset internet users), accessing maps or directions (49 per cent), and sportnews (24 per cent). While these information activities are also undertaken viacomputers, online information activities via computers also cover activities likesearching for jobs, accessing travel information or undertaking academic research,etc. These activities, given handset limitations, do not feature prominently in the online 70activity profile of mobile phone handset internet users.Communication-related activities were the most frequently reported activity undertakenonline via a mobile phone handset during December 2010. During this period, 1.4million persons aged 14 years and over used email, 420,000 using instant messagingand 174,000 made a VoIP call via their mobile phone handset during December 2010.In comparison during December 2009, 712,000 persons used email via their mobilephone handset, 361,000 instant messaging and 123,000 made a VoIP call. Otheractivities of note undertaken online via a mobile phone handset during December2010 included accessing information and general browsing activities (1.3 millionpersons aged 14 years and over respectively).70 Roy Morgan Single Source, December 2010.22 | acma
    • The continued dominance of the computer in terms of online activities is furtherreflected in ABS figures. During the December quarter of 2010, Australiansdownloaded nearly 175,000 terabytes of data via computers connected to fixed-linenetworks in comparison to nearly 17,000 terabytes of data downloaded via computersconnected to datacards, dongles or USB modems and 4,029 terabytes downloaded 71via mobile phone handsets.Profile of mobile phone handset internet usersThe use of the internet via mobile phone handset in Australia is largely dominated byyounger adults; specifically persons aged 18–34 years (Figure 11). Persons aged 25–34 years and 18–24 years accounted for 30 per cent and 24 per cent respectively ofmobile handset internet users in Australia during December 2010, a slight increase ofthree percentage points in each age group over the figures recorded for December2009. This is in contrast to the more evenly distributed profile of persons accessing theinternet via a computer where 39 per cent of users were aged 18 to 34 years inDecember 2010. The key characteristics of mobile phone handset internet users were:> 53 per cent were male> 71 per cent resided in capital cities 72> 50 per cent were in full-time employment.Figure 11 Age profile of persons going online by access device during December 2009 and 2010 14–17 18–24 25–34 35–44 45–54 55–64 65 years and over 35 30 30 27 25 24 % of internet users 21 20 20 19 20 20 18 19 19 16 14 14 15 13 13 13 13 10 10 10 10 9 7 6 6 6 5 3 2 0 Mobile handset Mobile handset Computer Computer Dec 09 Dec 10 Dec 09 Dec10Source: Roy Morgan Single Source, December 2010.71 ABS, 8153.0–Internet Activity, Australia, December 2010.72 Roy Morgan Single Source, December 2010. acma | 23
    • Emerging internet access devicesOther internet devices are also becoming available to Australian consumers, with fixedand portable games consoles, media players such as TiVO and tablet computers now 73available to web users. Tablet computers such as the iPad have been particularlypopular. Research undertaken by GfK and reported on indicates that 188,000 tabletcomputers had been sold in Australia by September 2010, the majority being iPads. Inaddition, awareness of tablet computers was at 80 per cent of those interviewed, with12 per cent of these respondents stating that they intended to purchase a tablet 74computer in the coming year. Telstra now offers the T-Hub and the T-Box, fixed-linevariations of the tablet’s touch screen interface, which were introduced in May 2010 in 75an attempt to address the decline in fixed-line customers. Promotional material forthe T-Hub stresses that the unit operates in a similar way to a mobile phone(highlighting the importance of multi-functionality as a feature of communicationsdevices), although the unit offers only limited internet access in addition to PublicSwitched Telecommunications Network (PSTN) voice services. The T-Box is an online 76television service bundled with a fixed-line and broadband connection. Telstrareported that at December 2010, approximately 128,000 T-Hub and 107,000 T-Boxes 77had been sold.74 R. Catanzariti, ‘Tablet mania hits Australia as iPad sweeps all before it’, ARN, 3 November 2010,www.arnnet.com.au/article/366668/tablet_mania_hits_australia_ipad_sweeps_all_before_it/.75 A. Colley, ‘Telstra presses on with launch of T-Hub touchscreen phone’, The Australian, 6 April 2010,www.theaustralian.com.au/australian-it/telstra-presses-on-with-launch-of-t-hub-touchscreen-phone/story-e6frgakx-1225850065097, accessed 30 May 2011.76 ACMA, Communications report 2009–10 series, Report 4—Changing business models in the Australiancommunication and media sectors: Challenges and response strategies, January 2011.77 Telstra, Telstra Corporation Limited Financial Results for the Half Year ended 31 December 2010, 10February 2011.24 | acma
    • Australians in the onlineenvironmentWhile the previous section identified a range of ways in which Australian consumersconnect to the internet, this section considers how they interact with onlineenvironment and utilise the internet once connected. It specifically examines how thetypes of activities undertaken online vary with consumer age and frequency of internetuse.Location of internet useApproximately 15.1 million persons in Australia aged 14 years and over (83 per cent ofthe total population aged 14 years and over) used the internet during the Decemberquarter of 2010. This compared to 14.2 million (80 per cent) during the December 78quarter of 2009 and 13.9 million (80 per cent) during the December quarter of 2008.Australians used the internet from a variety of locations (Figure 12) however the homeand work environments continued to remain the most frequently reported sites ofinternet use. Ninety-five per cent of persons aged 14 years and over who used theinternet during the December quarter of 2010, did so from home, 48 per cent at work 79and 14 per cent an educational institution.Figure 12 Locations where internet used Quarter ending Dec 08 Quarter ending December 2009 Quarter ending December 2010 100 94 95 % of persons aged 14 years+ using the internet from 91 90 80 70 60 any location 50 46 46 48 40 30 21 19 20 20 13 14 14 11 11 12 9 10 5 5 6 3 5 5 6 6 0 Home Work Educational Library Internet Friends Wireless Other institution cafe place hotspotNote: Multiple responses allowed.Source: Roy Morgan Single Source, December 2010.78 Percentages for 2009 and 2008 are similar due to rounding and the total population increasing in line withthe increase in the number of internet users.79 Roy Morgan Single Source, December 2010. acma | 25
    • More Australians are accessing the internet from multiple locations. For example,approximately 6.9 million Australians aged 14 years and over (38 per cent of the totalpopulation 14 years and over) used the internet both from home and work during theDecember quarter of 2010, compared to 27 per cent during the December quarter of2005. For these persons, an increasing proportion indicated they use the internet athome and work equally (42 per cent during the December quarter of 2010 comparedto 34 per cent during the same period during 2009). Figure 13 demonstrates thisincrease and the corresponding decrease in the proportion of these internet users whoidentified work only as their main location of internet use.Figure 13 Locations where internet mainly used Home Work Home and work equally % of persons aged 14 years+ using the internet 100 90 34 33 34 37 80 41 42 70 at home and work 60 50 28 28 26 24 21 20 40 30 20 38 39 39 39 38 38 10 0 Dec-05 Dec-06 Dec-07 Dec 08 Dec 09 Dec 10 Quarter endingSource: Roy Morgan Single Source, December 2010.Internet activities by ageFigure 14 presents an overview of activities undertaken online across age groups inAustralia. In general, for most Australians going online is about communicating (email,internet telephony and instant messaging), undertaking research and accessinginformation. However, reflecting different attitudes to the internet and life stages,entertainment and amusement based activities are most frequently undertaken onlineby persons aged 14–17 years, declining steadily with age.Banking and transactional activities become increasingly common among personsover the age of 18 years, perhaps reflecting the transition to full-time employment, 80careers, having more disposable income, and being increasingly ‘time-poor’. Evenfor retirees, banking and finance activities continue to feature prominently in theironline activity profile, a reflection of the integral nature of these services to the dailylives of most Australians.80 IBISWorld, ‘A click away: Time-poor, cash-rich shoppers are driving the industry forward’, Industry ReportX004, Online Shopping and Mail-Order Houses in Australia, March 2011.26 | acma
    • Figure 14 Activities* undertaken online by age during December 2010 General activities (browsing/surfing) Communications (email, internet telephony, instant messaging) Banking & finance Buying, selling, shopping Blogs & online communities Other interactive** Research & information Entertainment & amusement Advertising-related *** 90 83 82 81 77 79 79 78 77 80 76 75 76 % of internet users 74 74 71 69 69 67 67 67 67 69 68 70 65 62 59 60 56 58 56 56 60 53 49 50 50 42 44 41 40 38 38 37 39 40 35 36 33 34 31 29 30 32 31 32 28 28 30 24 25 23 21 17 17 18 17 20 13 15 10 0 14–17 18–24 25–34 35–44 45–54 55–64 65 years+ Age group*Relates to activities undertaken from any location.**Refers to entering competitions, registering at a website or creating or managing one’s own website.***Refers to viewing advertisements online or accessing websites as a result of off-line advertising.Source: Roy Morgan Single Source Australia, December 2010. acma | 27
    • Frequency of internet useThe internet has become ingrained into the lifestyle of many Australians; 71 per cent ofthe online population aged 14 years and over were estimated to use the internet atleast once a day at December 2010 compared to 67 per cent at December 2009 and63 per cent at December 2008 (Figure 15).In terms of location, 62 per cent of persons with access to the internet at their workplace went online at their workplace more than once a day. This compares to 53 percent of persons with home internet access going online at home more than once a dayand just 14 per cent for persons with access to the internet at locations other than 81home or work.Figure 15 Frequency of internet use Dec-08 Dec-09 Dec-10 70 59 60 54 % of internet users aged 14 years+ 50 50 40 30 20 16 13 13 12 14 12 10 7 7 6 5 6 5 3 2 2 3 3 2 2 1 1 1 1 1 0 More Once a A few Once a A few Once a A few Once a Less Cant say than day times a week times a month times a year often once a week month year dayNote: Internet use from any site.Source: Roy Morgan Single Source Australia, December 2010.The key characteristics of frequent internet users (persons accessing the internet morethan once a day) were:> Personal income level (see Figure 16)—frequency of internet use increases with personal income. Those with annual incomes of $90,000 to $99,999 had the highest representation of frequent internet users (81 per cent), followed by those with annual incomes of $100,000 or more (79 per cent). Online Australians earning $20,000 to $24,999 use the internet less frequently on average, with 42 per cent going online more than once a day. The comparatively high level of daily internet use among persons with annual incomes of under $15,000 (53 per cent) may relate to the significant number of persons in this income range currently undertaking some form of study.81 Roy Morgan Single Source, December 2010.28 | acma
    • > Age (see Figure 17)—there appears to be a strong relationship between age and frequency of internet use. For example, 67 per cent of internet users aged 18–34 went online more than once a day during December 2010, compared to 36 per cent of internet users aged 65 years or older.> Gender—on average, men use the internet slightly more often than women, with daily usage at 66 per cent and 61 per cent respectively.> Location—internet users residing in metropolitan (capital cities) locations are more likely (63 per cent) than persons living outside capital cities (53 per cent) to use the internet at least once a day. acma | 29
    • Figure 16 Frequency of internet use by annual personal income, December 2010 More than once a day Once a day A few times a week Once a week A few times a month Once a month A few times a year Once a year Less often Cant say 90 81 79 80 77 70 68 % of internet users aged 14 years+ 70 66 59 60 53 54 49 50 46 42 40 30 20 10 0 Under $15,000– $20,000– $25,000– $30,000– $40,000– $50,000– $60,000– $70,000– $80,000– $90,000– $100,000+ $15,000 $19,000 $24,999 $29,999 $39,999 $49,999 $59,999 $69,999 $79,999 $89,999 $99,000 Personal annual income rangeSource: Roy Morgan Single Source Australia, December 2010.30 | acma
    • Figure 17 Representation of frequent internet users in Australia’s online population, December 2010 More than once a day Once a day A few times a week Once a week A few times a month Once a month A few times a year Once a year Less often Cant say 100 4 6 6 5 5 5 8 2 6 5 5 90 6 7 11 80 15 7 9 12 13 12 10 14 70 12 13 % of internet users 12 60 13 18 50 17 40 67 67 63 30 61 59 53 20 36 10 0 14–17 18–24 25–34 35–44 45–54 55–64 65 years and over Age groupSource: Roy Morgan Single Source Australia, December 2010.Regardless of socio-economic characteristics, the majority of Australian internet usershave over time become more frequent participants. This is possibly a result ofincreasing:> knowledge about the benefits of going online> familiarity with the information and services accessible over the internet> availability of services on the internet.Figure 18 further reinforces the relationship between experience in using the internetand frequency of use—with the exception of persons under 18 years, 80–86 per centof internet users who go online more than once a day had over five years experiencewith the internet. These findings further support research findings previously reportedby the ACMA that the digital economy is becoming more central to the daily lives of 82Australians.82 ACMA, Communications report 2009–10 series, Report 1—Australia in the digital economy: The shift tothe online environment, November 2010; ACMA, Australia in the digital economy: Consumer engagement ine-commerce, November 2010. acma | 31
    • Figure 18 Years of online experience for persons using the internet more than once a day,December 2010 Less than 3 months 3 months to 12 months Over 1 year to 2 years Over 2 years to 3 years Over 3 years to 5 years Over 5 years to 9 years 10 or more years Cant say 100 90 28 80 41 49 56 54 54 70 62 % of internet users 60 50 37 40 40 31 30 30 29 22 30 22 20 12 12 10 7 8 10 9 6 1 3 3 3 3 5 0 14–17 18–24 25–34 35–44 45–54 55–64 65 years and over Age groupSource: Roy Morgan Single Source, December 2010Online behaviours by frequency of internet useNot surprisingly, the degree to which Australians engage in activities online is alsocorrelated with the frequency of their internet usage. Persons accessing the internetmore than once a day are more likely to engage in a broader range of activities onlinethan infrequent internet users (Figure 19). While an increasing variety of activities areundertaken online, Australians’ use of the internet is predominantly about searchingfor information, communicating and undertaking financial transactions, regardless offrequency of internet use.32 | acma
    • Figure 19 Activities* undertaken online during December 2010 More than once a day Once a day A few times a week Once a week A few times a month or less 79 Research & information activities Communication activities (email, VoIP, 79 instant messaging) 73 Banking & finance 68 General activities (browsing, surfing) 58 Entertainment & amusement activities Activities relating to blogging and online 48 communities (inc. social networking) 39 Buying, selling, shopping activities 31 Other interactive activities** 33 Advertising-related*** 0 20 40 60 80 100 % of internet users aged 14 years+*Relates to activities undertaken from any location.**Refers to entering competitions, registering at a website or creating or managing one’s own website.***Refers to viewing advertisements online or accessing websites as a result of off-line advertising.Source: Roy Morgan Single Source Australia, December 2010. acma | 33
    • Trends to watch in online behavioursSeveral emerging trends within the online activity profiles of internet users in Australiahave the potential to significantly change how persons communicate and interactsocially and economically, and the structure of existing business models. A few ofthese trends are outlined below.Online communications—VoIP and instant messagingWhile email remains the cornerstone of online communications, Australians are 83increasingly using other services such as VoIP, instant messaging and socialnetworking are increasingly featured in the online communication activities ofAustralians. In some cases consumers are substituting these services entirely fortraditional email or using email less often.During December 2010, approximately 2.3 million Australians aged 14 years and overmade a VoIP call via their computer and 2.3 million used instant messaging. Incomparison, during December 2009, 1.7 million persons made a VoIP call via their 84computer and 2.6 million used instant messaging. Approximately 1.4 million personsused services such as VoIP, instant messaging or social networking to communicateonline instead of email during December 2010 compared to 736,000 during December 852009. The ‘real time’ characteristics of services such as VoIP are perhaps the mainattraction for users of these services over email although Roy Morgan survey data alsoshows a lower level of usage of instant messaging during December 2010 relative toDecember 2009.Social networkingThe use of online social networking services (a service, platform or website thatfocuses on building social relations among persons) has wide appeal amongAustralians. Social networking enables internet users from different socio-economicbackgrounds to interact online and to complement ‘off-line’ social and, increasingly,work relationships. Within Australia, approximately 8.4 million persons accessed socialnetwork sites such as Facebook from home during December 2010, compared to 868 million during March 2010. Social networking also increasingly has a business andservice delivery dimension. Growing numbers of businesses and governmentorganisations are recognising the potential of social networking channels to raise their 87organisational profiles and improve customer service delivery. Table 7 provides anoverview of the number of internet users in Australia accessing a selection of onlinesocial network sites from home during December 2010.83 Instant messaging is when two or more persons logged into a particular instant messaging (IM) serviceexchange text messages in real time. It is more interactive than email because messages are sentimmediately, whereas email messages can be queued up in a mail server for seconds or minutes.84 Roy Morgan Single Source, December 2010.85 ibid.86 Nielsen Online, December 2010.87 ACMA, Communications report 2009–10 series, Report 1—Australia in the digital economy: The shift tothe online environment.34 | acma
    • Table 7 Australians visiting selected social networking sites from home, December 2010 Site Number of persons accessing site (000s) Facebook 7,383 Blogger 2,428 WordPress.com 1,055 Twitter.com 1,000 Myspace.com 756 LinkedIn 563 Yahoo!7 Groups 331Note: Relates to home internet users aged 2 years and over.Source: Nielsen Online, December 2010.Shopping onlineFor consumers the internet has made it easier to access information on the cost andavailability of products and services and to compare offerings across companies. Forbusiness, the internet presents opportunities and challenges. The internet has enabledthe development of online marketing and distribution channels, complementing ‘brick 88and mortar’ operations. It also continues to present challenges to businesses withcustomers able to move beyond traditional geographic boundaries and access agreater number of service providers, regardless of their location.However, the issue of the internet disrupting traditional business models is not justconfined to the retail sector. For example, the traditional news’ print sector is alsofaced with the challenge of changing consumer preferences for news consumptionwhere the internet provides ready access to a greater variety of news and information 89sources generally free of charge.According to Nielsen Online, an estimated 7.4 million internet users in Australiaaccessed mass merchandising web sites providing retail trade services (e.g. clothing,books, groceries, etc) from home during December 2010. This is compared to 6.8 90million during March 2010.Roy Morgan Research data also shows that 1.6 million Australians aged 14 years andover also used price comparison web sites (sites which enable consumers to compareprices of goods and services across businesses) during December 2010 when makingdecisions to purchase a product or service. Examples of such sites includeGetprice.com.au, Myshopping.com.au and Webjet.com.au.Approximately 2.2 million Australians aged 14 years and over purchased a good or 91service online during December 2010 compared to 2 million during December 2009.Online shopping activity has been found to vary according to age, gender, householdincome, level of education and employment in general. More information can be foundin previous research published by the ACMA report Australia in the digital economy— 92Consumer engagement with e–commerce.88 ACMA, Communications report 2009–10 series, Report 1—Australia in the digital economy: The shift tothe online environment, 11 November 2010.89 ACMA, Communications report 2009–10 series, Report 4—Changing business models in the Australiancommunication and media sectors: Challenges and response strategies, January 2011.90 Data for December 2009 not available.91 Roy Morgan Single Source, December 2010.92 ACMA, Australia in the digital economy—Consumer engagement with e–commerce, November 2010,www.acma.gov.au/WEB/STANDARD/pc=PC_312364. acma | 35
    • ABS reports that approximately $143 billion worth of internet orders were received byAustralian businesses during 2009–10, representing an increase of 15 per cent in the12 months to June 2010. These figures include business to consumer and business to 93business transactions.Table 8 presents data on the number of Australians visiting a selection of retailshopping, auction and price comparison sites from home during December 2010.Table 8 Australians visiting selected retail/ auction websites from home, December 2010 Site Number of persons accessing site (000s) eBay 4,240 Amazon 1,698 Shopping.com.au Network 1,340 GetPrice 1,290 Lasoo.com.au 1,154 Big W 988 JB Hi-Fi 897 Harvey Norman 811 Myshopping.com.au 796 Gumtree 780 DealsDirect.com.au 773 Kmart Australia 743 Dick Smith Electronics 688 Target Australia 672 MYER 640 OO.com.au 613 The Good Guys 607 PriceDumper.com 588 Rewards Central 574 Coles 574 Cudo.com.au 571 NexTag Network 530 Grays Online 498 BigPond Trading Post 484 Borders 479 Webjet 449Note: Relates to home internet users aged 2 years and over.Source: Nielsen Online, December 2010.Online video/audio contentWith developments in software applications and ready and cheaper access toincreased internet connection speeds, online Australians are accessing video andaudio content in increasing numbers. For example, Nielsen Online data shows that anestimated 5.5 million persons accessed one or more of the online video distributionsites identified in Table 9 during December 2010, compared to 5.1 million duringMarch 2010. Approximately 5.3 million persons accessed YouTube from home duringDecember 2010, compared to 4.8 million in March 2010.93 ABS, 8166.0 – Summary of IT Use and Innovation in Australian Business, 2009–10, June 2011.36 | acma
    • Bandwidth heavy activities in particular are becoming increasingly common amonginternet users as more content is offered over the web through various services. Theseinclude user generated content services, such as YouTube, commercially-producedcontent available through channels such as iTunes movie and BigPond Movies andcatch-up viewing services of television broadcasts such as the ABC’s iView service.Table 9 provides an overview of the number of home internet users in Australiaaccessing a selection of video content distribution sites. At present digital contentdistribution via the internet in Australia is dominated by the user generate content siteYouTube.Table 9 Australians visiting selected video sites from home, December 2010 Site Number of persons accessing site (‘000s) YouTube 5,326 Google Video 894 Vimeo 350 ABCiview 283 Metacafe 225 Dailymotion 197 NineMSN Video 133 BigPond Movies 188 Bing Videos 118Note: Relates to home internet users aged two years and over.Source: Nielsen Online, December 2010.In addition, many sites, such as online news sites, are providing streamed videocontent for consumers as a complement to traditional news text. Online news sitesattract large numbers of Australians with an estimated 6.2 million internet users 94accessing these sites from home during December 2010. The growing significanceof online digital video and audio activities is also reflected in Roy Morgan Researchsurvey data presented in Figure 20 while the growth in the volume of data beingdownloaded via the internet in Australia is reflected in Figure 21.94 Nielsen Online, December 2010. acma | 37
    • Figure 20 Select digital content activities undertaken online during December 2009 and 2010 Dec 09 Dec 10 3,500 Number of persons aged 14 years+ (000s) 2,911 3,000 2,702 2,745 2,518 2,606 2,500 1,959 2,024 2,000 1,460 1,500 1,293 1,182 1,000 500 0 Streamed audio Downloaded Played games Streamed video Downloaded or radio online video clips, TV online clips or television music or programs, programs audio/video feature-length podcasts moviesSource: Roy Morgan Single Source, December 2010.In terms of Australians accessing digital content online, the biggest growth area inonline activities relates to streaming video clips or television programs (Figure 20).During December 2010, 2.7 million Australians aged 14 years and over streamedvideo clips or television programs online compared to 1.2 million during December2009, a 125 per cent increase.Volume of data downloadedThe increasing level of activity undertaken online appears a product of growth in thenumbers of internet users and more data being downloaded per internet user. During 95the December quarter of 2010, 191,839 terabytes of data were downloaded via the 96internet, compared to 155,503 terabytes downloaded during the June quarter of2010 and 127,954 terabytes during the December quarter of 2009 (Figure 21). Thiswas an increase of 23 per cent compared to the June quarter of 2010 and 50 per centcompared to the December quarter of 2009. According to the ABS, the bulk of datadownloads continues to occur via fixed-line services, accounting for 91 per cent ofdownloads during the December quarter of 2010, (excluding downloads over mobile 97phone handsets).In terms of data downloaded per subscriber, during the December quarter of 2010, anaverage of 18.8 gigabytes of data was downloaded per subscriber. This is roughlyequivalent to 120 hours of streaming video on YouTube or 60 hours of watching95 This increases to 195,868 when including downloads via mobile phone handsets. ABS only begancollecting mobile phone handset downloads in June 2010.96 This increases to 156,220 when including downloads via mobile phone handsets.97 This falls to 89 per cent when downloads over mobile phone handsets are considered—ABS, 8153.0–Internet Activity, Australia, December 2010.38 | acma
    • 98television programs on the internet. This compared to an average of 16.8 gigabytesdownloaded per subscriber during the June quarter of 2010 and 14.6 gigabytes during 99the December quarter of 2009.In addition, the ABS reports that a comparatively smaller 4,029 terabytes of data wasdownloaded via mobile phone handsets during the December quarter of 2010,compared with 717 terabytes downloaded during the June quarter of 2010. While thisis a significant increase of over 462 per cent in six months, it represents only two percent of the overall volume of data downloaded by Australians via the internet duringthe December quarter of 2010. On average 0.5 gigabytes of data was downloaded permobile phone handset internet subscriber during the December quarter of 2010, wellbelow the average download volume recorded for other internet subscribers(18.8 gigabytes).Figure 21 Volume of data downloaded via fixed-line and mobile wireless internet services 250,000 200,000 191,839 Terabytes downloaded 150,000 155,503 127,954 100,000 99,249 81,352 50,000 0 Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Quarter endingNote: For consistency of time series, figure excludes data downloaded via mobile phone handsets. ABS began collecting volumeof downloads via mobile phone handsets from June 2010. The ABS undertakes its Internet Activity Survey biannually for theJune and December quarters.Figures are for ISPs with more than 1,000 subscribers, and include downloads by household, business and governmentsubscribers.Source: ABS, 8153.0–Internet Activity, Australia, December 2010.98 These figures were derived from properties of the streaming files on the catch-up ABC or SBS websitesand from the properties of the ACMA video clips on the YouTube site.99 Calculated on the basis of ABS data sourced from 8153.0–Internet Activity, Australia, December 2010.Average data downloaded includes fixed and mobile wireless broadband (dongle, datacard and USBmodem) subscribers and excludes mobile phone handset subscribers. acma | 39
    • Appendix—Researchbackground and methodologyData sourcesThe data in this report are drawn from a number of sources, including:> Roy Morgan Single Source, for estimates about the online population in Australia 14 years and over, drawn from a large-base survey sample (more than 25,000 per year in Australia), December 2010> the Australian Bureau of Statistics, 8153.0–Internet Activity, Australia, December 2010 for counts of internet subscribers for ISPs with 1,000 or more subscribers> Nielsen Online, for estimates of the number of home internet users visiting websites.Supply-side data is drawn from a range of sources, including:> internet service provider websites and annual reports> Australian Bureau of Statistics> Market Clarity Database, which provides a listing of service providers in the voice and internet service markets in Australia.Table 10 provides an overview of the sample sizes for key estimates in this report.Table 10 Sample sizes for key digital economy estimates Estimate Sample size Roy Morgan Single Source % of the Australian population 14 years+ with any internet service at home 18,967 % of the Australia population 14 years+ using the internet via their mobile phone 15,463 % of the Australia population 14 years+ with broadband at home 11,165 Nielsen Online Estimates of website traffic during December 2010 7,000Counts of internet subscribers versus counts of internet usersThis report uses two types of metrics to formulate an overview of internet adoption inAustralia:> Counts of internet subscribers—a subscriber differs from a user or person/business as one user may have multiple accounts with a single ISP, or accounts with more than one ISP. Conversely, there are single ISP subscriber accounts that provide internet access for multiple persons/organisations (for example, universities).> Estimates of persons with internet access and internet users—these estimates are derived via sample surveys and, depending on the sample size, have a level of variability (standard error) associated with an individual estimate.These two sources of data can be used simultaneously to validate market directions(the shift from narrowband to broadband, for instance), but subscriber metrics are nota substitute for household or business sector surveys. Subscriber counts areaccounting or billing points, and they provide only a limited picture of internet and,more specifically, broadband adoption in Australia, in what is essentially a supply-sideview of internet take-up. Subscriber metrics do not provide important information aboutissues such as the actual number of broadband users, online behaviours and40 | acma
    • attitudes, nor on characteristics (age, gender, personal income, location) of internetusers.Data analysisResults from the survey were analysed using descriptive analysis techniques andsocioeconomic and demographic factors to identify any areas with significant patternsor differences. Only results with significant differences are reported in this research.Sample sizeThe sample size limits some analysis by smaller subgroups; for example, data at statelevel or by both gender and age.RoundingDiscrepancies may occur between the sums of the component items and totals due tothe effects of rounding.Previous ACMA researchThis report also draws on the following key ACMA reports:> the annual ACMA Communications report series, http://engage.acma.gov.au/communications-report-2009-series/> the 2010 ACMA report Emerging digital content services: Video content services over IP in Australia> the 2010 ACMA report Australia in the digital economy—Consumer engagement with e-commerce. acma | 41
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