Inadequate bandwidth has been singled out as the most widespread problem for businesses, according to a bandwidth survey carried out by the Telecom Regulator's office as part of its quarterly report.

Of those who had difficulties accessing broadband services, 35 per cent said the difficulties had impacted investment decisions in terms of where they decided to locate their points of operation.

The survey of 387 companies, ranging from small and medium-sized enterprises to large corporates, was carried out in April and May.

Other difficulties experienced by users were service levels from telecommunications companies, the range and prices of services offered, and the lack of an alternative supplier.

The majority of companies, 61 per cent, anticipate that their broadband requirements will change over the next 12 months. Almost a quarter of businesses believe they will need "a lot more" and a further two in five envisage needing "a little more" access.

Around half of businesses plan to upgrade their bandwidth requirements further, primarily to accommodate the rise in use, mentioned by 29 per cent of businesses, but also for increasing speed of access, data transfer, use of company websites and e-mail transactions.

The survey also revealed that two-thirds of respondents have been approached by various suppliers offering broadband services in the past year. The regulator, Ms Etain Doyle, said this indicated a significant amount of competition in the sector, adding that this was good news for Irish business as prices should fall as demand stimulates competition.

Of those who had been approached by alternative operators, 16 per cent have switched operator in the past year.

Welcoming the increased confidence of business in expanding their broadband capability, Ms Doyle said: "The recent launch of commercial DSL services by Eircom and Esat will mean that users have new alternatives to meeting their broadband requirements. Further opportunities for local and regional bandwidth will also come on stream in the near future under new ODTR [Office of the Director of Telecommunications Regulation\] plans for fixed wireless access, including wireless LANs."

ISDN is the predominant access technology used by Irish business, the survey said, but respondents indicated that DSL and wireless LANs are access technologies that businesses will depend on more in the future. Of companies that have wireless LANs, four in 10 had introduced the facility in the past 12 months.

The ODTR quarterly report, which covers the period from January 1st, 2002 to March 31st, 2002, showed total revenues for fixed, mobile and broadcasting markets at the end of March stood at an estimated €3.21 billion per annum on an annualised basis, a fall of 1 per cent since the last quarter. But the figure has risen by around 1 per cent since the same period last year.

The telecoms sector is estimated to account for around 2.72 per cent of Irish GDP, a fall of 0.4 per cent since the last quarter and by around 0.28 per cent since March 2001.

New entrants' share of the fixed-line market is approximately 21 per cent, around 1 per cent more than in March 2001.

Irish mobile penetration remains the same since last quarter at 77 per cent. However, the penetration rate has risen by 4 per cent since June 2001. The Republic is ranked seventh in the EU for mobile phone penetration.

O2 has increased its share of the market by 1 per cent to 40 per cent. Vodafone retains a 57 per cent market share, while Meteor controls 3 per cent.  The regulator's report also confirmed the big rise in SMS messaging in the first quarter of 2002. A record number of text messages were sent by Irish people in the past quarter as the half-a-billion barrier was breached. On average, Irish mobile subscribers are sending 62 SMS messages a month, a 20 per cent rise on the previous quarter.

The report also revealed that Irish mobile subscribers are paying the second-highest average-revenue-per-user rates in Europe, according to the results of a new independent survey. Over the past year, 260,000 households have switched from analogue to digital TV, accounting for 20 per cent of all households, the report said.