Consumer BVAS revenues up 81% in 2006
With over $16 billion in revenues, consumer BVAS became increasingly essential to the financial success of broadband services.
Altogether, consumer BVAS brought in more than 25%, as much revenue as basic broadband access during 2006. Telephone (Voice over IP), TV services (IPTV) and online gaming all did well.
The run-rate for consumer BVAS revenues increased by almost 81% during 2006, from $11.9 billion at the start of the year to $21.6 billion at the end of the year.
This was steeper than the growth rate for the number of consumer broadband lines (34% to 246 million) or the run-rate of broadband access revenues (32% to $71 billion) during 2006.
John Bosnell, Senior Analyst at Point Topic, said ‘Value added services are making an increasingly valuable contribution to overall broadband revenues. Our research shows that broadband value-added services were contributing an extra 30% to basic access revenues by the end of 2006.’
In value terms, the top five contributing services in 2006 were, in order, security, IP telephony, gaming online, home networks and music.
VoIP
IP Telephony, defined as full-service phone-over-broadband offerings, has now overtaken security to be the value added service that generates the greatest revenue. In some markets, such as France, Japan and the USA, IP telephony has won a significant share of the telephone market.
It accounted for around a quarter of all telephony traffic in France by the end of 2006, for example. Even with tariffs that are lower than traditional PSTN charges, the growing size of the IP telephony subscriber base means significant revenue. This is reflected in the growth of IP Telephony revenues in percentage terms, with a 188% increase.
The other variant of VoIP, Internet voice services such as Skype – offering a best-effort level of service – had a similar rate of revenue growth (180%), but much lower actual revenues ($173 million at the end of 2006).
Bosnell commented: ‘Taken together, just two services, IP Telephony and Security, account for 56% of total consumer BVAS revenues. That shows how important it is for ISPs to have a strong position in these areas.’
More consumers using more services
BVAS Average Revenue Per User (ARPU) went from $65 per user per year at the beginning of 2006 to $88 at the end of the year.
This reflects the fact that consumers are using more services. Most BVAS charges are the same as or slightly less than the previous year.
Value-added services therefore contributed an additional 25.5% to broadband access revenues during 2006.
Excluding security, there were 307 million BVAS accounts at end-2006, an average of 1.25 per broadband line. That compares to 0.75 per line at end-2005, 0.59 per line at end-2004 and 0.53 at end-2003.
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