2 August 2002

By Stuart Corner, The Exchange

Home broadband market for telcos only

With Telstra and Optus bragging about the growth in broadband
services, the head of Pacific Internet in Australia is predicting that
only tier one carriers, in conjunction with media companies, will be
able to make a success of the residential market.
Dennis Muscat, managing director, of Pacific Internet Australia, said that
residential users were unwilling to pay for the large volumes of data which
come with any serious use of broadband services.

PI does not charge for data downloads during the night on its residential
broadband services, and this policy has resulted in peak traffic times
being 1.00-4.00 am.

"People are aware that at 1.00 am it's free, so they turn on all their machines
and download lots of porno, games, linux programs," Muscat told Exchange.
"The mass market wants a lot and does not want to pay. If we were providing
an unlimited service 24 hours a day we would be struggling to stay in
business because people do not want to pay more than $60 per month, and
we would have to keep buying more and more bandwidth."

Muscat predicted that "there will be only about three major players across
the region dominating the residential broadband market."
He told a conference in Sydney this week that the home broadband market
would be dominated by visionaries; long term players, bandwidth rich,
with deep pockets and operating in partnership with media conglomerates
with major brand names.

When asked if there was a future for anyone other than Telstra in the
Australian residential broadband market, Muscat said "that's a damn
good question."

Currently, according to Telstra, there are more than 140 service providers
offering broadband to the Australian market.