Broadband Value-Added Services Up 30% in 2009

LONDON - The market for consumer broadband value-added services (BVAS) grew by 30 percent during 2009 in revenue terms, and by 13 percent in terms of subscribers, says the latest  Consumer Broadband Value Added Services report from research firm Point Topic. The run rate for consumer BVAS revenues went from $39.6 billion to $48.9 billion, or 23 percent, during 2009 -- even though plain broadband subscription revenues grew by only 14 percent.

“Value-added services, like VoIP, security and IPTV, grew more quickly than the number of broadband lines in 2009. The operators and ISPs are starting to increase the proportion of their revenues that they generate selling add-on services for broadband -- and they are doing it successfully, at least in revenue terms,” says John Bosnell, senior analyst at Point Topic.

In terms of value, the leading services were VoIP, security, online gaming, IPTV and online music. Services such as security achieve high revenues because they have relatively high penetration. Even if a service has a low unit price and offers a low margin to the supplier, it can be a success if it manages to appeal to enough users.

“Margins for basic broadband access are reducing all the time. That, along with pressure from competitors, is driving operators push bundles. They help operators retain customers and increase revenues, so the importance of value-added services to operators’ revenue stream increases. The increasing penetration of super-fast broadband worldwide will only fuel this significance, and ISPs have to live up to their acronym and service their customers across a range of products,” says Bosnell.

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