Business BVAS Revenues Up 60 Percent

According to Point Topic, broadband value-added services for business users showed revenue growth of just over 60 percent during 2004. At the start of 2004, revenue was running at a yearly rate of around $2.3 billion. This figure grew to $3.7 billion by year-end. This is the first time that it has been possible to estimate the growth of the new market. Value-added services are extremely important for service providers, who need to find ways of increasing revenues from broadband services. As broadband connection tariffs become more competitive in price, value-added services are the most important way of increasing margins for service providers. This makes these 2004 results important for ISPs serving the business market. Growth in BVAS revenues was lower than the rate of growth in the number of business broadband lines. These grew from 10.6 million to 19 million during 2004, an increase of 79 percent. Most businesses continue to obtain and use their broadband connections just for Internet access and related applications such as email. Relatively few use broadband to increase the efficiency of their internal business processes. Business broadband access revenues (the total revenue from installation and connection charges) grew more slowly than the number of lines during 2004, increasing by just under 50 percent from $13 billion to $19 billion. This was because of reducing average tariff levels during the year.