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The Future of the Independent ISP Product Image

The Future of the Independent ISP

  • Published: June 2006
  • 16 pages
  • Ovum

With double and triple play on the rise, the appeal of single-play broadband is fast diminishing in the face of bundles offering customers significant savings as well as convenience. In addition, the decline in the price of entry-level broadband access subscriptions, which, on average, amounted to 14.5% in the two years to December 2005, means that revenue growth is not keeping pace with subscriber growth. The biggest threat of all to their business model is the arrival of ‘free’ broadband to market, where it is used as a loss leader to attract customers, add value to their proposition and drive up revenues in other areas.

We expect these trends to fuel further consolidation, as independent ISPs become targets, not just from traditional predators such as other ISPs and telcos, but also TV providers and mobile operators seeking to capitalise on convergence.

Although the outlook looks grim for many independent ISPs, those that find their niche and perform well within it are well placed to fight back and survive. Differentiation from the mass-market players is essential, and there are a number of routes for independent ISPs to achieve this.

Key messages

Small fish in a big pond

The independent ISP

Background
Market position today
The challenges ahead
The future: fewer, more diverse, players
Survival strategies for independent ISPs

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