Broadband operators see value-add service bonanza

Broadband value-added services grew strongly during 2005 across global business and residential markets, new research has revealed.

Analyst firm Point Topic found that revenues from services to residential customers grew by almost 74 percent during 2005.

Business revenues increased from US$3.7bn at the beginning of the year to almost US$9bn at year-end, representing growth of around 142 percent.

According to the report, business broadband value-added services revenue was running at an annual rate of US$9bn at the end of 2005, with total access revenues valued at US$24bn.

The average revenue per user increased from US$15 at the start of 2005 to US$26 at the end of the year.

"This suggests that a growing number of businesses are using their broadband connection to do more than just access email or surf the Web faster," said John Bosnell, senior analyst at Point Topic.

"They are increasingly using broadband to improve their business processes by introducing virtual private networks, or reducing capital expenditure by renting software services from an application service provider, for example."

Security remained the dominant service for which companies are paying, corresponding to 60 percent of the revenues.

"Security spending dominates the value-added services market because it is ubiquitous. Almost every business broadband line has some form of security service on it," explained Bosnell.

Overall, the key value-added services retained similar shares of the market from the beginning to the end of 2005, with no significant 'winners' or 'losers'.