"Net users are flocking to wireless broadband" gushes Lia Timson in today's Sydney Morning Herald. According to the Australian Bureau of Statistics, wireless broadband use grew 400% in 18 months.
The figures deserve a closer look. The overall market grew 11% in that period to a total of 6.65 million subscribers, of that 186,000 were wireless. That's actually 2.8%, not the 5% reported in the SMH report and the ABS media release the article is based upon.
The figures need to be further taken with a grain of salt by a number of market factors that were happening over that 18 months. The biggest wireless broadband providers, iBurst and Unwired were marketing heavily in that period. In regional areas, local providers such as Wirefree and Cirrus Communications were using wireless in areas where ADSL isn't feasible.
Looking at our customer base, 3% is about right. Despite the hype, wireless broadband isn't for everyone. ADSL and cable are far cheaper and more reliable alternatives.
Wireless broadband does have a role to play. For people moving around and those in difficult to reach areas it's the most feasible option. I can see this niche being up to 15% of the market over time as more service companies, sales people, taxis, couriers and the like start using it.
It's just a shame the SMH and press release writers at the ABS have to hype up the figures. The growth is impressive, but it's started off a low base. I pity investors who get into these ventures without understand the figures or the market.
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