juLY 2011
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acma | 1
Contents (Continued)
Introduction
Summary
Internet service market
Overview
Internet subscribers by technology type
ADSL
Mobile wireless and mobile phone handset internet
Hybrid fibre coaxial (HFC) networks
Satellite broadband
Dial-up services
ISP charging models
Expanded service offerings
Bundling
Enhanced interactive services
Internet connection speeds
Internet access devices
Profile of mobile phone handset internet users
Emerging internet access devices
Australians in the online environment
Location of internet use
Internet activities by age
Frequency of internet use
Online behaviours by frequency of internet use
Trends to watch in online behaviours
Online communications—VoIP and instant messaging
Social networking
Shopping online
Online video/audio content
Volume of data downloaded
Appendix—Research background and methodology
Data sources
Counts of internet subscribers versus counts of internet users
Data analysis
Sample size
Rounding
Previous ACMA research
acma | 1Introduction
The Australian Communication and Media Authority (the ACMA) is an evidence-based regulator. As such it has an interest in monitoring and understanding the developing digital economy and its impact on the industries that it regulates, as well as changing consumer behaviour in response to services innovation. The intent of the research and reporting 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 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.
Any comments on this report would be welcomed and can be sent to or mailed to:
Manager, Communications Analysis Section
Australian Communications and Media Authority
PO Box 13112
Law Courts
Melbourne Vic 8010
The internet service market in Australia is dynamic, characterised by continual innovation in internet service provider (ISP) service offerings, take-up of innovative consumer access devices and increased participation in the online environment.
Summary
The internet service market in Australia is dynamic, characterised by continual innovation in internet service provider (ISP) offerings, take-up of innovative consumer access devices and increased consumer participation in the online environment. This report highlights major developments in this market.
Consumers using multiple internet access technologies
At December 2010, there were nearly 10.4 million active internet subscribers in Australia using fixed and mobile wireless (dongle, datacard, USB mode) services and 8.2 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. Mobile wireless subscriber numbers increased by 49 per cent in the 12 months to December 2010, while mobile phone handset subscribers increased at a comparable, but slightly lower, rate (21 per cent over the six months to December 2010).
However, growth in these services has not occurred at the expense of fixed-line access technologies, with ADSL subscriber numbers also increasing by seven per cent over the 12 month period. Fixed-line internet services continue to play a central role in driving the digital economy accounting for the majority (91 per cent) of data downloads in Australia[1]. During the December quarter of 2010, nearly 175,000 terabytes of data were downloaded via fixed-line services in Australia, compared to less than nine per cent of data downloads occurring via mobile wireless services and just two per cent via mobile phone handset services.
Increased take-up of the internet and frequency of online participation
More 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 during the December quarter of 2010, up from 14.2 million during the same period in 2009. At December 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 plans
On average, 18.8 gigabytes of data was downloaded per internet subscriber in Australia during the December quarter of 2010, roughly equivalent to 120 hours of streaming video content on YouTube. This compared to 14.6 gigabytes downloaded during the December quarter of 2009. This is in part a reflection of increasing activity relating to downloading or streaming video content. During December 2010, 5.5 million persons accessed video streaming sites such as YouTube and Google Video from home, compared to 5.1 million during March 2010.
To support increasing content downloads and online activities Australian are shifting to higher speed internet services; 46 per cent of internet subscribers in the households sector now subscribe to internet services with an advertised maximum download speed of 8Mbps or more, compared to 30 per cent at December 2009.
Mobile phone handset internet developing as a complementary service
While most Australians who accessed the internet did so via a computer (96 per cent during December 2010), increasing numbers of consumers are doing so via their mobile phone handsets. Approximately 3.1 million Australians aged 14 years and over accessed the internet via their mobile phone handset during December 2010, compared to 1.9 million during December 2009. However, mobile handset internet is developing as a complement to the traditional computer, with 98 per cent of these internet users also using the internet via a computer. This is also reflected in the lower levels of handset internet users undertaking activities like e-commerce online via their mobile phones, compared to online activities undertaken via their computers. Consumers appear to be utilising each access device according to a specific need and lifestyle requirement.
The internet challenging traditional business models
Australians continue to value the internet as an important communication channel but the manner in which internet users communicate online is changing, with increased use of alternative online communications channels such as internet telephony (voice over internet protocol—VoIP) and social networking. The use of these services appears to be affecting traditional online communications via email.
During December 2010, 2.3 million Australians aged 14 years and over went online to make a VoIP call via their computer, 2.3 million used instant messaging and 5.4 million undertook activities relating to blogging and online communities. The number of persons who used such media as a substitute to traditional email usage almost doubled in the twelve months to December 2010 (1.4 million persons, compared to 736,000 persons during December 2009).
Australians are also increasingly using the internet to transact online and use the internet to source and compare services across businesses. For example, approximately 7.4 million Australians accessed retail and auction web sites from home during December 2010, compared to 6.8 million during March 2010 and 2.2 million personspurchased a good or service directly via the internet during December 2010, compared to nearly 2 million during December 2009. The increasing importance of
e-commerce is further reflected in latest ABS figures which show that just under $143 billion worth of internet orders were received by Australian businesses in the 12 months to June 2010, an increase of 15 per cent since June 2009.
Convergence is also enabling the exploitation of a wider range of consumer electronic devices to access the internet in addition to the mobile phone handset, with more recent developments centred on the entry of internet-enabled TV sets into the Australian market place. These developments are generating significant consumer interest in accessing a wider range of interactive services via the TV. For example, at December 2010, 3.4 million and 2.5 million persons respectively were estimated to be interested 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 key trends in the Australian communications market and its impacts on consumers as they embrace the digital economy. On the evidence available, Australians are moving increasingly to adopt and use multiple technologies to access the internet as a core part of their daily lives.
Table 1 Key indicators—internet subscribers[2] by sector, technology type and maximum advertised download speedIndicator / 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
ADSL[3] subscribers (‘000) / 4,178 / 4,458 / 7
Mobile wireless broadband subscribers—dongles, datacard, USB modem subscribers (‘000) / 2,838 / 4,230 / 49
Dial-up subscribers (‘000) / 891 / 707 / –21
Other subscribers (cable, fibre, ISDN, satellite, etc) (‘000)[4] / 1,044 / 1,051 / 1
Mobile phone handset internet subscribers (‘000) / 6,781
(June 2010) / 8,197 / 21[5]
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 / 70
Note: Subscriber counts are for ISPs with 1,000 or more subscribers. Subscriber counts for cable services not separately provided by the ABS due to confidentiality reasons. Data for mobile phone handset internet subscribers not collected by ABS before June 2010. Sources: ABS, Internet Activity Survey.
Table 2 Key indicators—volume of data downloaded by internet subscribers in Australia
Dec
quarter 09 / Dec
quarter 10 / % change
Total downloaded (excludes mobile phone handsets) (terabytes) / 127,954 / 191,839 / 50
Fixed-line networks inc. dial-up / 113,704 / 174,848 / 54
Mobile wireless broadband / 14,251 / 16,990 / 19
Mobile phone handset / 717
(June 2010) / 4,029 / 462[6]
Note: Relates to ISPs with 1,000 or more subscribers. Data for mobile phone handset internet subscribers not collected by ABS before June 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
Internet users 14 years+ (million)[7] / 14.2 / 15.1 / 6
Persons14 years+ with selected internet services in the home
ADSL[8] (million) / 4.8 / 6.4 / 33
Mobile wireless broadband (dongles, datacards,
USB modems) (million) / n/a / 3.7 / n/a
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
least once a day (million) / 10.4 / 11.6 / 11
Internet users 14 years+ using VoIP via their computer, instant messaging or social networking to communicate instead of email (million) / 0.74 / 1.4 / 90
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
Internet users 2 years+ accessing selected
categories of website from home / March 10 / Dec 10 / % change[9]
Retail shopping/auction websites (million)[10] / 6.8 / 7.4 / 9
Social networking websites (million) / 8.0 / 8.4 / 5
Internet video distribution sites (million)[11] / 5.1 / 5.5 / 8
n/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.
Table 4 Key indicators—select online activities undertaken by access device during December 2010
Indicator / Mobile phone handset (%) / Computer (desktop 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 / 35
Note: Relates to internet users aged 14 years+. Source: Roy Morgan Single Source.
Internet service market
Overview
At December 2010, there were 10.4 million active internet subscribers in Australia, across the government, business and household sectors.[12] This represents nearly a 10 per cent increase on the June 2010 figure of 9.5 million subscribers and a 17 per cent increase on the December 2009 figure of 9 million.[13] In addition, the ABS reports that there were 8.2 million mobile phone handset internet subscribers in Australia at December 2010, a 21 per cent increase on the 6.8 million subscribers recorded at June 2010.[14]
Household internet subscribers accounted for 78 per cent of the total number of internet subscribers in Australia at December 2010, a two percentage point decline since June 2010.[15] The remaining 22 per cent of subscribers were accounted for by the business and government sectors (Figure 1).
Figure 1 Distribution of internet subscribers by household, business and government sectorsNote: 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 broadband connections (offering advertised maximum download speeds of 256kbs or greater) making up 93 per cent of the total number of internet subscribers in Australia at December 2010, compared to 92 per cent at June 2010 and 90 per cent at December 2009. At December 2010, approximately 94 per cent of household subscribers were classified by the ABS as broadband subscribers compared to 92 per cent for business and government subscribers.[16]
The ISP sector in Australia has been identified as the fastest growing sector in the telecommunications industry. IBISWorld reports a3.9 per cent per annum growth in industry revenue for this sector for the five years to 2010–11 largely driven by increased adoption of higher speed broadband services.[17] The ABS reports that at the end of December 2010, there were 104 ISPs operating in the Australian market with 1,000 or more subscribers, which shows a marginal decline from the 107 recorded at June 2010. The decrease could be a reflection of a number of prominent mergers and takeovers occurring in the Australian market, such as iiNET’s takeover of AAPT’s residential services, and a general trend to industry consolidation in an attempt to take advantage of economies of scale.[18] There were 12 ISPs operating in the Australian internet service market with more than 100,000 subscribers. The market is dominated by four ISPs: Telstra (BigPond), Optus, TPG and iiNet. Table 5 provides a snapshot of the number of internet services in operation for each of these ISPs.
Table 5 Services in operation (SIO) for key internet service providers in AustraliaISP / Internet SIO, 31 December 2010
Telstra (BigPond)[19] / 3.551 millionfixed 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).
Optus[20] / 1.011 million fixed internet subscribers including:
946,000 HFC, ULL[21] and business-grade broadband
1.19 million mobile wireless broadband subscribers*
iiNet[22] / 650,000 broadband subscribers†
TPG[23] / 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 Figures are 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.
Internet subscribers by technology type
Growth in internet subscribers in Australia continues to be dominated by mobile wireless broadband (dongle, datacard and USB modem based services), which increased by 49 per cent in the 12 months to December 2010. However, the increase in mobile wireless broadband subscriber numbers has not been at the expense of mainstream fixed-line services with ADSL subscribers (covering all copper based access technologies relating to DSL, ADSL and ADSL2+) increasing by approximately seven per cent during the same period. Mobile wireless broadband has continued to gain in popularity such that subscriber numbers are now marginally below ADSL subscriber numbers (see Figure 2). At the end of December 2010, ADSL accounted for 43 per cent of all internet subscribers in Australia marginally down from 44 per cent at the end of June 2010. In comparison, mobile wireless broadband subscribers accounted for 40 per cent of all internet subscribers, up from 36 per cent at the end of June 2010.
Figure 2 Non-dial-up internet subscribers, ADSL versus mobile wireless broadband*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-speed internet services in the home. Of these services, ADSL, mobile wireless broadband and mobile phone handset internet are the most frequently reported internet access technologies available in the home (see Figure 3).
Approximately 14 per cent of the total population aged 14 years and over (2.6 million persons) did not have access to the internet at home nor use it via a mobile phone handset. Key characteristics of this group included: