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Consumer value added services are set to triple from US$125 billion worldwide in 2011, to $420 billion in 2020, says Oliver Johnson, CEO of Point Topic. Services are critical to provider revenues. broad

 

The analyst firm says as competition reduces margins in the broadband business and with increasing penetration of broadband value-added services, their contribution to revenues is becoming increasingly important. VoIP is currently the top revenue earner, however, the forecast is this will be trumped by IPTV by 2020. Growth may not be easy for some services, particularly when faced with competition from online and offline services.


“Development may be harder for some markets than other. For example, security already has a penetration rate of over 85%, so being able to grow this further will depend on developing other security related services, or on the advent of a virulent and destructive online threat,” says Johnson.

Access revenues, subscriptions charged for a broadband service, are similarly a tough area to grow revenue, especially as saturation permeates through more and more markets. Offering the right bundles for their consumers in a particular market, signing the right deals and maintaining a customer base in the face of global competition will be the mark of a successful ISP in the next few years.

Get it wrong and they won’t see growth – get it right and their prize will be an income base worth several multiples of its yearly value. “Challenges lie ahead for all and the Internet can be fickle, but the right player with the right service, or more likely set of services, has the chance to sweep all before them,” he adds.

-----Point Topic

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