The market for consumer broadband value-added services (BVAS) grew by
81 percent during 2006. With over $16 billion in revenues, consumer BVAS
became increasingly essential to the financial success of broadband services.
Altogether, consumer BVAS brought in more than 25 percent as much revenue
as basic broadband access during 2006. Telephone (Voice over IP, VoIP)
and TV services (IPTV) and online gaming all did well.
The run-rate for consumer BVAS revenues increased by almost 81 percent
during 2006, from $11.9 billion at the start of the year to $21.6 billion
at the end of the year. This was steeper than the growth rate for the
number of consumer broadband lines (34 percent to 246 million) or the
run-rate of broadband access revenues (32 percent to $71 billion) during
2006.
The results are from the fourth edition of Point Topic's report 'The
consumer BVAS market', part of the Broadband Money Makers service. These
reports are all based on a consistent research methodology This means
that we can compare the results for the end of 2006 with those for end-2003
and end-2004.
Report author John Bosnell, Senior Analyst at Point Topic, said 'Value
added services are making an increasingly valuable contribution to overall
broadband revenues. Our research shows that broadband value-added services
were contributing an extra 30 percent to basic access revenues by the
end of 2006.'
That figure compares with a contribution of 22 percent at the beginning
of the year, 18 percent at the start of 2005 and 10 percent at the start
of 2004. For the year of 2006 as a whole, Point Topic estimates that consumer
BVAS revenues were $16.3 billion, with access revenues of $62 billion.
Telephony and security account for over half BVAS
revenues
In value terms, the top five contributing services in 2006 were, in order,
security, IP telephony, gaming online, home networks and music. IP Telephony,
defined as full-service phone-over-broadband offerings, has now (August
2007) overtaken security to be the value added service that generates
the greatest revenue. In some markets, such as France, Japan and the USA,
IP telephony has won a significant share of the telephone market. It accounted
for around a quarter of all telephony traffic in France by the end of
2006, for example. Even with tariffs that are lower than traditional PSTN
charges, the growing size of the IP telephony subscriber base means significant
revenue.
This is reflected in the growth of IP Telephony revenues in percentage
terms, with a 188 percent increase. The other variant of VoIP, Internet
voice services such as Skype—offering a best-efforts level of service—had
a similar rate of revenue growth (180 percent), but much lower actual
revenues ($173 million at the end of 2006).
Bosnell commented: 'Taken together, just two services, IP Telephony
and Security, account for 56 percent of total consumer BVAS revenues.
That shows how important it is for ISPs to have a strong position in these
areas.'
More consumers using more services
BVAS Average Revenue Per User (ARPU) went from $65 per user per year at
the beginning of 2006 to $88 at the end of the year. This mainly reflects
the fact that consumers are using more services. Most BVAS charges are
the same as or slightly less than the previous year. Value-added services
therefore contributed an additional 25.5 percent to broadband access revenues
during 2006.
Excluding security, there were 307 million BVAS accounts at end-2006,
an average of 1.25 per broadband line. That compares to 0.75 per line
at end-2005, 0.59 per line at end-2004 and 0.53 at end-2003.
Article appeared originally on ISP-Planet.com
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