DSL's Value-Added Services Will Position the Industry for Revitalization; A Potential Market Opportunity Valued at Up to $26 Billion Annually
BOSTON--(BUSINESS WIRE)--May 24, 2001--The DSL industry is experiencing hard times. Service providers and equipment manufacturers are struggling to remain financially viable. These struggles are not a reflection of the technology per say, but the growing pains of a young industry. Can the implementation of value-added services breath life into the struggling DSL industry? The latest report from Pioneer Consulting, "Enabling Value-Added Services Over DSL Networks: Market Opportunities for Service Providers and Equipment Suppliers," takes a comprehensive look at these value-added services and the sizeable market opportunities they represent for DSL service providers and equipment manufacturers.
"Current weakness in DSL markets reflects the growing pains of a nascent industry," said Paul Kellett, senior director of research at Pioneer Consulting. "Service providers and equipment manufacturers have not yet tapped the full potential of the market, which is poised for a revitalization from the introduction of DSL-enabled value-added services."
Table 1.2: Value-Added Service Penetration: 2001-2005 (Thousands)
2001 EOY 2002 EOY 2003 EOY 2004 EOY 2005 EOY
Total DSL Subs 4,483 10,982 13,743 15,328 16,165
Total Value-Added
Services 1,524 6,071 11,891 18,178 25,029
% Value-Added
Services 33.99% 55.28% 86.52% 118.60% 154.84%
Services Per
Subscriber 0.34 0.55 0.87 1.19 1.55
Source: Pioneer Consulting, LLC
According to Pioneer's new study, over 16 million DSL customers will subscribe to over 25 million value-added services by 2005. Value-added services are defined as enhancements to a basic DSL access product that are enabled by that product. Some examples of these services include: Video-On-Demand (VOD), Voice-Over DSL (VoDSL), MPEG Music, Multi-Player Gaming, Videoconferenceing, Broadcast Television and Virtual Private Networking (VPN). Pioneer estimates that value-added services represent a market opportunity varying from $15.8 billion to $26.6 billion per year, depending on pricing selected by service providers.
"Each of the value-added services mentioned in the report will generate considerable interest among subscribers. However, VPN services will clearly lead the pack in terms of revenue and number of subscribers," said Michael Lowe, senior market analyst on emerging broadband research at Pioneer Consulting. "This is because VPN services have become so important to the operations of many businesses where other services will be seen as more of a luxury. It is important to note though, that many of these services will be delivered in the form of a bundle."
The report offered by Pioneer examines the market for value-added services in the United States between 2001-2005 and highlights the benefits for service providers and equipment suppliers, analyzes the demand and forecasts the U.S. market share.
The report also provides insight to several questions including: Which value-added services will be most profitable? What service providers and equipment suppliers must do to take advantage of the market potential? What pitfalls to avoid? At its conclusion, the report demonstrates that the optimal way to achieve profitability, sustained growth and increased end-user loyalty, is through the implementation of value-added services.
About "Enabling Value-Added Services Over DSL Networks: Market Opportunities for Service Providers and Suppliers" The "Enabling Value-Added Services Over DSL Networks: Market Opportunities for Service Providers and Suppliers" report can be purchased in both hard copy and electronic formats. A table of contents and executive summary are available at www.pioneerconsulting.com or by contacting Pioneer Consulting at (617) 424-5200. |
