Australia - Broadband billions left hanging as wireless bites back

[smh] Australians are flocking to 3G mobiles and wireless broadband devices, bringing into question some of the assumptions behind the Rudd Government's $43 billion national broadband network.

A report published yesterday by the Australian Communications and Media Authority shows that take up of wireless technology more than doubled last financial year as quicker speeds and more sophisticated handsets made it a viable alternative to fixed-line internet.

''Australians increasingly seek flexibility in where and how they access communications and content,'' the report found.

The number of mobile phone services rose 9.5 per cent in 2008-09 to 24.2 million, and wireless broadband had leapt 162 per cent to 2.1 million by the end of June. This contrasts with the number of fixed-line telephone services, which fell 3 per cent to 10.7 million.

The report backs other evidence of a rise in mobile services. Last month Telstra used such data to explain a reduction of the revenue it expected from fixed-line services.

The embrace of wireless by consumers could prove to be a headache for the Government. The financial viability of its broadband network will rely on much of Australia's internet traffic being directed through its pipes.

The Communications Minister, Stephen Conroy, has argued that wireless would complement the broadband network but lack enough speed to be a direct competitor.

A spokesman for Senator Conroy did not respond to a request for comment. However, the spokesman had previously said of wireless: ''Industry experts agree its popularity does not reduce the need for fibre broadband investment to support Australia's future requirements''.

The broadband network will use fibre-to-the-premises infrastructure to deliver speeds of up to 100 megabits a second to 90 per cent of homes and businesses. The remaining 10 per cent will get a wireless service.

The Opposition communications spokesman, Tony Smith, used the figures to attack the Government, saying it lacked sufficient evidence for its spending on the network.

''This evidence from Senator Conroy's own agency highlights the utter recklessness of the Rudd Government in committing to the [network] without any semblance of cost-benefit analysis.''

Broadband billions left hanging as wireless bites back