ISPs look for the value-add

Internet service providers (ISPs) are shifting from simply growing subscriber numbers to the longer-term goal of increasing revenues per user by developing new services.

Broadband value added services revenues are running at the rate of $3.3bn a year globally. But a relatively small number of services account for the majority of value-added revenue.

Tim Johnson, publisher at broadband market research firm Point Topic, told vnunet.com: "Broadband has been sold to consumers based around the benefits of 'speed' and 'always-on'.

"But this is no longer enough. Consumers want to do a lot more with their connections."

He added that existing value added services often had lots of users, but do not generate much revenue.

For example, peer-to-peer file sharing services places high demand on networks, yet provides ISPs with little in the way of revenue.

Security is the most lucrative value added service, generating $1bn in revenue worldwide, followed by online gaming ($839m) and home networking ($778m).

Teleworking services were found to be generating very little revenue. "Lots of people use broadband for teleworking, but we found few ISPs offering value added services," said Johnson.

"Most teleworkers would really appreciate a company that came along and solved all their problems."

Nick Godsell-Fletcher, sales and marketing manager at ISP Proweb, said that his company offers services including security, anti-spam and antivirus.

"We offer services to Boots, Derbyshire Constabulary and solicitors, and many of these are data sensitive," he explained, adding that after-sales is also an important value-added service.

Additional reporting by Arif Mohamed.