Baby boomers the last frontier for broadband adoption

Telstra's market share has only dropped five percent in the past decade

Around 67 percent of Australian Internet users are on broadband, but according to new research its the 'baby boomers' that are slowing uptake by dragging their feet when it comes to adoption.

In a project entitled "Understanding the next broadband market", Ericsson researched the A/NZ market only to find that boomers account for the bulk of customers yet to adopt broadband.

Broadband adoption is at its lowest for this segment of the market.

The research found there was no rush for adoption because the technology wasn't seen as cutting edge or a must-have by boomers.

In fact, Ericsson Australia strategic marketing manager, Mahssa Hosseini, said boomers think of broadband as a utility.

"They aren't looking for flash, attention grabbing, eye-popping commercials as may be appropriate for 20-somethings; they want simplicity and top line benefits as if they were shopping for a utility," she said.

University of Technology associate professor Elaine Lawrence said service providers need to adapt their messages to the attitudes and values of this group.

"Baby boomers represent a large and affluent market for service providers, if they are approached correctly," Lawrence said.

Next year the Australian telecoms market is expected to top the $37 billion mark, with another $1.5 billion added by 2009, according to Budde Communications.

Analyst Paul Budde said the broadband market is rapidly approaching five million subscribers.

Data revenues, which include broadband and dial-up Internet, will grow from $6 billion in 2007 to $8 billion in 2009.

Budde said Telstra dominates with a 66 percent market share.

Despite all of the federal government's regulatory reform, Telstra's market share has only dropped five percent in the past decade, according to Budde.

"Telstra still dominates two thirds of the total market; Optus is hovering around 20 percent market share and the other 600 providers squabble over the remaining 13 percent," he said.

"The smaller telcos are slowing seeing an improvement in their margins. In 2000, 48 percent of their total revenue went to Telstra in wholesale charges. Now this percentage is 44 percent and this will improve to 42 percent in 2009."

Budde said the move from mobile data to wireless broadband or 4G will be slow, arriving between 2010 and 2012.

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