AOL NEWS:
Welcome Tom and happy dance with us. ;-)
I received this info from a friend of mine that found it from an online account news report. best regards, Dep
News for AOL
ISP Market Set To Soar - IDC Report
FRAMINGHAM, MASSACHUSETTS, U.S.A., 1999 APR 20 (Newsbytes) -- By Steve
Gold, Newsbytes. A report out from International Data Corp. (IDC)
concludes that the US Internet service provider (ISP) market will
continue to soar, thanks to the arrival of the Internet as a mass
market medium.
The bottom line to the report, entitled "Internet Service Provider
Market Review and Forecast, 1998-2003," is that the US ISP market will
generate almost $4.5 billion-worth of extra revenue annually over the
next three years.
Interestingly, the report notes that many of the most significant
benefits from this surge in revenue will accrue to the market leaders,
which IDC says include America Online and MCI WorldCom.
Delving into the report reveals that IDC predicts revenues in the US
ISP market will soar 41 percent from $10.7 billion in 1998 to $15.1
billion in 1999.
According to IDC, revenues will increase at a compound annual growth
rate of 28 percent through 2003 to $37.4 billion, making the ISP market
the fastest-growing telecommunications market ever.
IDC's report splits the ISP market into four market segments:
corporate access, individual access, wholesale, and value-added
services.
In 1998 the individual access segment was the largest, with $4.7
billion in revenues. According to Mark Winther, the firm group vice
president of worldwide telecommunications, the individual market looks
set to maintain its position as the largest segment until 2003, when
value-added services will wrestle away the top spot.
According to the report, America Online owns the largest share of the
overall market, with 23 percent. MCI WorldCom, meanwhile, is second,
with 17 percent.
"At the broadest level, two companies have clear predominance in the
Internet services markets," Winther said, adding they are MI WorldCom
in the business and wholesale markets and AOL in the consumer and
value-added services markets.
According to Winther, the next closest competitor is MSN with 12
percent of the market. In the corporate access segment, meanwhile, MCI
WorldCom's 1997 share was 27 percent -- almost four times that of its
closest competitor, IBM Global Network, which owned just 7 percent of
the market.
"AOL and MCI WorldCom achieved dominance through a combination of
extremely rapid internal growth and strategic acquisitions," he said,
noting that MCI WorldCom's Internet division is growing revenues in
excess of 70 percent annually, while AOL is growing revenues faster
than 60 percent annually.
Other than AOL and MCI WorldCom, IDC expects significant growth from
AT&T/CERFnet, GTE Internetworking, and PSINet.
However, Winther said that he believes competition will heighten in
the market. "Access will become a commodity and vendors will have
limited opportunity to differentiate or compete other than on cost. To
maintain growth and competitiveness into the first decade of the 21st
century, ISPs will have to invest in value-added services," he said.
According to Winther, the key growth drivers in the near term are a
mix of new customers and existing customers' expanded spending.
"Growth in access will slow in 2001, but value-added services will
pick up the slack. By 2002 and 2003, annual revenue growth will
accelerate and increase by $5.7 billion and $8 billion, respectively,"
he said.
"This reflects the 'coming of age' of ISP opportunities in
value-added services such as e-commerce, virtual office, unified
messaging, multimedia networking, for example," he added.
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