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Ericsson predicts the Death of Dial-Up

Ericsson predicts the Death of Dial-Up

Survey shows majority of Internet users will go broadband by early 2007

Ericsson has released the results of its trans-Tasman “Death-of-Dial-Up” study, which indicates that the number of residential broadband Internet users in New Zealand will overtake the number of dial-up Internet users by early 2007.

Ericsson commissioned the study into broadband usage and expected uptake in both New Zealand and Australia, with the support of the Melbourne Business School (Melbourne University).

Stephen Inglis, Ericsson’s General Manager for Broadband in New Zealand and Australia, says the study builds on research undertaken by Ericsson during 2003 regarding the economic impact of broadband development.

“Broadband is a critical factor for the economic development of New Zealand moving forward and there are very serious impacts that we’ll have to face as broadband increases the gap between the ‘haves’ and ‘have nots’.”

“New Zealand and Australian broadband availability certainly needs to be accelerated if we want our countries to operate on par with the rest of the developed world,” he says.

Momentum building for broadband

The study predicts that more than 50% of residential Internet users in New Zealand will connect via broadband by around the beginning of 2007. Australian residential broadband users are expected to overtake dial-up users by early-mid 2006, almost a year earlier than New Zealand.

“Overall Internet penetration is strong in New Zealand, and the challenge is to migrate existing dial-up subscribers to broadband.”

“Significant marketing efforts will be necessary to continue the momentum behind broadband uptake in New Zealand at the moment. Without such efforts, New Zealand broadband penetration will continue to lag behind Australia and the rest of the world,” says Inglis.

Reasons and behaviours for broadband

The study also looked at the behaviours of both dial-up and broadband users, and the reasons why users would switch to broadband.

Dr. Pat Auger, Associate Professor of Information Systems and eCommerce at the Melbourne Business School, says the key drivers for switching to broadband in both New Zealand and Australia include the higher data transfer speeds and the freeing-up of the phone line for calls while on the Internet.

“Previous experience of broadband, for example at work or an educational institution, is another important driver,” he says.

The research showed that consumers considered the cost of monthly fees for broadband as the most important factor when choosing a broadband connection. Installation fee and download limits are moderately important, while contract length and charges for excess downloads are least important.

Usage patterns of broadband and dial-up subscribers

The majority of broadband subscribers use the Internet more often after switching to broadband from dial-up. New Zealanders spend on average 19 hours per week on the Internet using dial-up access but 22 hours per week if using broadband. Australians spend on average 17 hours per week on the Internet using dial-up access and 23 hours if they are on broadband.

New Zealand and Australian broadband subscribers most commonly noted downloading music and films/video as an activity undertaken more often following the move to broadband. Instant messaging and online games are also prominent activities for broadband users.

The research showed that subscribers who have switched to broadband report a greatly reduced satisfaction with dial-up. “The survey results indicate that once users switch to broadband, they won’t go back to dial-up,” says Inglis.

Background to Survey

The Death of Dial-Up Study is an initiative of Ericsson ConsumerLab, which has been researching end users since 1995. At a global level Ericsson interviews over 13,500 people, aged 15 to 64, in 10 countries (including China, Japan, France, Germany, Great Britain, Italy, Spain, Sweden, USA and Canada) each year.

For the Death of Dial-Up study, the research team interviewed 644 end-users in October 2004 across Australia and New Zealand (approximately 300 users in New Zealand). This representative metropolitan sample covered a diversity of people and attitudes regarding Broadband. The study is based on current broadband penetration, consumer interest and planned household uptake of broadband.

The full ConsumerLab results are shared with Ericsson customers around the world through Ericsson’s Advisory services. Ericsson has delivered more than 300 business-consulting projects in market and service launch strategies in over 60 countries worldwide. Ericsson is shaping the future of Mobile and Broadband communications through its continuous technology leadership. Providing innovative solutions in more than 140 countries, Ericsson is helping to create the most powerful communication companies in the world.

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