ADSL2+, cable access to grow in Victoria

The penetration of ADSL2+ and cable fixed line broadband services is expected to nearly double in Victoria over the next four years, according to Deloitte Access Economics.

The report (pdf), commissioned by the Victorian Government for the first time since 2010, forecast a 10 percent annual growth rate in the number of "second wave" fixed broadband subscriptions taken up in the state to 2016 due to "demand for faster internet services" and uptake of the National Broadband Network.

The analysts described the "second wave" category as access technologies providing speeds of between 8 Mbps and 50 Mbps download, which is provided today largely through ADSL2+ technology in well-served areas as well as cable broadband.

The category differentiates such technologies from "first wave" broadband of between 256 Kbps and 8 Mbps, and a "third wave" category, used to define services with download speeds of 50 Mbps and above, which is largely dominated by fibre-to-the-home technology.

The "second wave" category of broadband identified in the Deloitte report could also be attributed to lower speed tiers available over the National Broadband Network.

However the analysts noted "availability constraints" and delays associated with construction of the network meant the older technologies would remain the prevalent form of broadband over the next four years.

Connections above 50 Mbps were expected to reach 615,456 homes and businesses in the state by 2016, while "second wave" broadband connections would climb from 939,286 to more than 1.6 million.

Over the same period, dial-up access is forecast to fall significantly from some 134,146 customers to 38,210. Satellite access would also decrease by three-quarters.

The increase in access speeds would also drive up operator revenues, with 50 Mbps-plus broadband access netting $1.2 billion by 2016, while expenditure on "second wave" services would reach more than $1.6 billion annually.

Although much faster speeds were expected to become available sooner to homes and businesses in the state, Deloitte analysts said delays in the rollout of the NBN in the state meant 50 Mbps-plus services would not become the most prevalent until 2018, revised from a previous forecast of 2013.

IDeloitte analysis indicated that "unmet demand" for these services — "those who would adopt a service if it were available to them" — would only rise over the next four to five years as the NBN was rolled out.

Such demand was characterised at 358,201 homes and businesses last year, but would climb to 1.2 million by 2016, predominantly in Melbourne.

"The increase in unmet demand is driven by increased bandwidth needs, as well as greater awareness of the capabilities of FTTP as the rollout of the NBN continues," the report stated.

"Much of this unmet demand will become met as the NBN is completed beyond 2016."

Victorian technology minister Gordon Rich Phillips, who has previously been critical of the Federal Government initiative, used the results to argue the NBN was not being rolled out quickly enough, or meeting high-demand requirements.

"It's clear the Commonwealth's rollout plan is not hitting areas where there is strong demand for services or those areas that would benefit most from adequate services," he said in a statement.

"Delays in the NBN rollout have resulted in much lower coverage of third wave broadband and have exacerbated unmet demand for these services."