Monday, April 2, 2007

Small ISPs get squeezed in SME market

INTERNET service providers will need to look to provide value-added broadband managed services if they are to sustain small and medium-sized customer spend, research consultants Analysys said.

The company reports that while the SME spend on simple broadband access is expected to peak in about 2009, the market for managed services is set for a period of strong growth through to the end of 2011.

The Analysys European research is based on a survey of 184 SME’s, but its finding can be broadly applied as trends in the Australian market.

The report found that broadband managed services – that is, services enabled by or delivered over a broadband connection – were already in string demand.

Among SMEs, 65 per cent of companies preferred to buy their telecom services from a single supplier. This means that broadband providers with the right portfolio of bundled and non-bundled services have the opportunity to increase the average revenue per (SME) user.

“In order to sustain revenue growth, providers targeting the SME sector must introduce complementary services, and provision of broadband managed services is a key area for exploitation,” the report’s author Simon Sherrington said.

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