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Broadband Value-Added Services Growing

According to Point Topic, Consumer broadband value-added services (BVAS) revenues increased by 74 percent during 2005. At the start of the year, revenues were running at an annual rate of $6.9 billion. This had increased to $11.9 billion 12 months later. And the contribution of value-added services to overall broadband profit margins was bigger in 2005 than in 2004.

The increase in value-added services revenues was steeper than the growth in the number of consumer broadband lines (49 percent increase to 183 million lines) or total broadband access revenues (29 percent increase to $54 billion) during the same period.

Therefore, by the beginning of 2006, value-added services were adding an extra 22 percent to access revenues. This compares with a contribution of 18 percent at the start of 2005 and 10 percent at the start of 2004. For the year 2005 as a whole, Point Topic estimates that consumer BVAS revenues were $9.1 billion, with access revenues of $47.8 billion.

In value terms, the top 5 contributions were, in order, security, IP telephony, online gaming, home networks and music downloads. While security and home networks are support tools that enable the use of broadband, VoIP, gaming and music are all services that need broadband to work effectively. These results show that value-added services revenues are steadily increasing in relative importance, when compared with revenues from the supporting technologies and infrastructure of broadband.

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