Canadian Businesses Still Using Dial-Up for Net Access

Canadian businesses claim they are ready to purchase the latest data services for their quickly growing bandwidth needs, but 70 percent of Canadian midsize businesses still have dial-up Internet access, according to a survey by Dataquest Inc.

ISDN is the second most-widely used service among midsize Canadian businesses at 56 percent, and DSL follows at 26 percent.

“Even where dial-up access bandwidth has increased from 28.8 Kbps to 56 Kbps, many customers cannot practically obtain this speed due to network instability for data transmission, although it is not a problem for analog voice communications,” said Charles Carr, senior analyst for Gartner Dataquest’s worldwide Telecommunications and Networking group. “These network shortcomings and the ever-increasing bandwidth needs of applications continue to be a strong driver for cost-effective wideband/broadband access solutions.”

Although it is trailing ISDN in Canada, Gartner Dataquest predicts DSL is positioned to become the more accessed service. “Emerging broadband services, such as DSL, have made significant penetration into the market over the last couple of years, but the lack of infrastructure, irregular bandwidth distribution and technical problems have delayed their widespread acceptance in the business community,” Carr said. “However, as infrastructure is built and prices drop, DSL services are set to have the greatest growth potential, 15 percent, over the next year within the midsize business market, while dial-up service will have the greatest decrease, 43 percent.”

Dataquest also found that the most important criteria for a business selecting a service provider is the ability of the local telephone company to be able to provide all of the telecommunications requirements, as well as the ability to obtain all telecommunications services from a single provider.

Midsize enterprises that have been building and maintaining their own networks will move away from internally operated and managed networks toward outsourced and managed services because it is becoming less viable in the highly complex and quickly changing telecommunication/networking environment.

“Managed services will provide the largest new revenue growth opportunity for carriers over the next five years to offset profit margin erosion in native data services and will improve product line differentiation and brand, while decreasing the overall cost of network ownership,” Carr said.

High-speed Internet access has also been slow to catch on with Canadian consumers. According to the winter 2001 CyberTRENDS report from ComQUEST Research two-thirds of Canadian adults now have Internet access, but less than 15 percent havehigh-speed access. Not surprisingly, the 15 percent of the population with high-speed access are technologically and Internet savvy, and are leading the way in virtually every aspect of Internet usage.