Market Reports

PRESS RELEASE

LESS THAN 30% OF ALL CORPORATE & GOVERNMENT DATA SERVICES UTILISE BROADBAND CONNECTIONS

Price is a Major Inhibitor to Broadband Take-up

Sydney, September 2002 - One of the surprise findings in Telsyte's recently completed data services study was the low take-up of broadband (defined as services at 2 Mbps or higher) in the corporate/government sector. Upon aggregating service connections across data networks using Frame Relay, ATM, Managed IP based on ATM/FR/MPLS, Managed IP based on Ethernet or POS (Packet over SDH) and Leased Line/Clear Channel technologies, Telsyte found that broadband services accounted for only 29% of all connections. In fact, over 38% of all enterprises still connect their networks with access speeds of 64 Kbps or less. Telsyte has been monitoring the Australian data services market for the past four years and has just released its latest suite of reports covering these services.

Shara Evans, Telsyte's Managing Director, said: "As an industry we've been beating ourselves up about the lack of broadband in the residential and SME sector, yet our largest companies and government organisations continue to use low speed connections." Evans believes that the main inhibitor to higher speed services is price.

Using an example of Frame Relay, Evans illustrates the impact on telco service revenues — and corporate/government expenditure — if existing connections shifted to higher speeds at current market prices. "Today, the Australian Frame Relay market is worth over $700 million per annum. However, if Frame Relay access links migrated to 2 Mbps connections — using existing committed information rates (reserved bandwidth for site-to-site connectivity) — the market would be worth over $1.6 billion. If committed information rates rose to just one quarter of the access speed (512 Kbps) the market would be worth close to $2 billion."

Clearly, the extra $1.3 billion revenue would have to come from somewhere. While this would be great for telco company bottom lines, the corporate/government sector would have to dig deep to pay for this.

Although technologies such as DSL or Ethernet can be used to provide lower cost high-speed services, Telsyte has found that very few traditional data services use DSL technologies for access connectivity.

The 2002 Edition of Telsyte's Industry Profile: Australian Data Services provides a comprehensive supply-side view of Australian market demographics, growth projections, service options and equipment utilisation for the following data services:

1. Frame Relay
2. ATM
3. Managed IP based on ATM/FR/MPLS
4. Managed IP based on Ethernet or POS (Packet over SDH)
5. Managed IP Remote Access
6. Managed Internet-based VPNs
7. Leased Line/Clear Channel

Participants in the Telsyte's study include: AAPT/TNZA, AARnet, Agile, Amcom/Rescue Technology Group, Asia Global Crossing, Austar United Broadband, Chime, CITEC, COMindico, Datafast, Equant, ETSA, FLOW Communications. IiNet, Infonet, Macquarie Corporate Telecommunications (MCT), Nava Networks, Neighborhood Cable, Nextgen Networks, NTL Telecommunications, NTT Australia, Optus, PanAmSat, Panaseer, PowerTel, Primus, Request, SITA, Swiftel, Telecasters Communications, Telstra, TPG, TransACT, Uecomm, WorldCom and XYZed.

ABOUT TELSYTE

Telsyte Pty Ltd is an independent telecommunications strategic planning consultancy and research organisation that specialises in broadband technologies. The focus of the firm includes the technical analysis of networking technologies, the financial analysis of telecommunications services, the comparative analysis of service and product options and the application of telecommunications/networking products and services to solve business requirements.

A full 50% of Telsyte's time is spent researching both the Australian market and broadband technologies. This primary research allows Telsyte to bring up-to-date, hard-to-find information to client projects.

Ms. Evans was recently appointed to the CeNTIE (CSIRO-led Research Network Consortia) Advisory Panel and was a participant in the Broadband Advisory Group's recent Sydney forum.

FOR FURTHER INFORMATION, PLEASE CONTACT:

Michael Carpena
Starbuck Management Services (Telsyte's Public Relations Firm)
Phone: 0412 244 925
mcarpena@optusnet.com.au

Shara Evans
Managing Director, Telsyte
Phone: (02) 8297-4650
info@telsyte.com.au

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