| Last updated at: (Beijing Time) Tuesday, November 13, 2001 |
IDC: ISPs Need to Repackage Service Offerings to Stay Sharp |
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The International Data Corporation (IDC) has concluded that income from subscriber fees alone will not be sufficient for Internet Service Providers (ISPs) to stay competitive.
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The International Data Corporation (IDC) has concluded that income from subscriber fees alone will not be sufficient for Internet Service Providers (ISPs) to stay competitive.
"With the intensification of downward pressure on Internet access fees, IDC believes that service differentiation, additional revenues from value-added services and bundled services will become key factors to continue profitability and growth in this market space," said Gary Hong, Product Manager, Communications Research, IDC Asia/Pacific.
According to a recent IDC report, the ISPs market will grow to more than 12 billion U.S. dollars by end-2001 and to exceed 38 billion dollars by 2005, representing a Compound Annual Growth Rate (CAGR) of 34 percent. In 2000, the ISPs market was valued at 8.8 billion dollars.
IDC believes that the focus will no longer be solely upon building up subscriber numbers.
"More attention is expected to be paid towards improving the quality of provider/subscriber relationships, which will be key to any ISP's potential to up-sell and cross-sell services, and to earn from advertising, eCommerce, or some other additional revenue source," said Hong.
IDC expected that the growth in subscribers of broadband Internet access will accelerate as the entry of new competitors brings access fees down, and as intense rivalry spurs service providers to put greater efforts into winning new customers.
Value added services, which formed about 13 percent of total Internet revenues during 2001, are expected to exceed 19 percent of total Internet revenues by 2005 in Asia/Pacific, according to the report.
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