-
The Company
The Company
- Ericsson is shaping the way the world communicates. Read on to discover more about our company, its history and vision.
-
Thinking Ahead
Tech Talk
- Do you want to know what the Social Web of Things is and how we can benefit? Watch our latest Tech Talk film
Thinking Ahead
- All our insights, research, and discussions are here in one place. Use them for Thinking Ahead.
-
Your Business
- Government
- Transport Industry
- Utilities Industry
- Developer Portal
- Equipment Manufacturers
- Channel Partner Program
Your Business
- Take a closer look at how Ericsson can help your business excel in a rapidly evolving market.
-
Our Portfolio
Our Portfolio
- Find out more about Ericsson’s comprehensive portfolio of innovative products, operator solutions and services.
-
Careers
Careers
- A career with Ericsson offers outstanding opportunities for professional and personal development in a truly global organization.
Content key for broadband development
Consulting firm Arthur D. Little's recent report on broadband markets worldwide, Making Broadband Profitable, estimates that global broadband revenues will top USD80 billion by 2008, double the estimate for 2004. Content is expected to account for 20% of total revenues in four years' time. The largest share of revenue, though, will remain access fees.
January 29, 2004
With the exception of South Korea and Hong Kong, all other countries in the world have yet to reach broadband market maturity.
The fastest-growing broadband markets are in Europe, with a compound annual growth rate of 193%, and Latin America, with 169%. South Korea, Japan and the United States account for more than half of all broadband subscriptions.
The report says that content will be the main driver for broadband development, supported by trends such as higher access speed and increasing interoperability of devices.
Customer confidence
Services such as Apple's iTunes Store, which allows consumers to buy and download music on-line, and X-Box Live, which allows gamers to play online, are helping to increase consumer confidence in on-line content delivery. As this confidence grows, more content providers are expected to enter the market, further enriching the services and content available for broadband users.
Internet service providers (ISPs) and network service providers (NSPs) have the chance to increase their revenues. ISPs can, for example, establish partnerships with content providers to charge for new services, or they can offer consumers added-value services such as portals, mature content filters control and virus protection.
Content providers can also capitalize on the success of content services by developing micro-billing mechanisms of their own or exploiting online gaming opportunities.
The study shows that, as markets mature, average revenue per user decreases due to increased competition, regulatory intervention and pay-as-you-go-access.
Demand for greater bandwidth ISPs and NSPs can introduce new traffic-based pricing models or offer added-valued services such as increased bandwidth on demand and new higher-bandwidth services. As content's role increases, demand for greater bandwidth will follow suit.
The study recommends that ISPs and NSPs that wish to stay ahead of the game develop partnerships with content providers, and that content providers need to consider the timing of their market entries carefully. ISPs and NSPs should develop long-term relationships with customers by bundling services and introducing advanced services.
Broadband players that focus on access and speed, have business models without content and services, and adhere to single proprietary standards,will be the big losers.
The transition from growing to mature markets offers great opportunities as well as dangers. Only companies prepared for the changes to come will succeed.
