Broadband Growth Boosts Dwindling Telecom Revenue - InformationWeek

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Broadband Growth Boosts Dwindling Telecom Revenue

Revenues from traditional telephone services are negatively affecting telecom providers but will be partially offset by the growth of broadband, according to an In-Stat report released Wednesday.

As revenues from traditional telephone services continue to negatively impact telecom providers, the decline in revenues will be partially offset by the growth of broadband services and cable television, according to a report released Wednesday.

In-Stat said total consumer spending on communication services will fall to $106.7 billion in 2009 from $114.8 billion in 2004. The bright spot in the gloomy report, however, is broadband, which is expected to grow from a 28.6 percent market penetration in 2004 to nearly 50 percent by the end of 2009.

"The migration from dial-up to broadband is good news for service providers, as the monthly fees for broadband will remain substantially higher than for dial-up," said In-Stat analyst Amy Cravens in a statement. "With $13.7 billion in broadband revenues in 2004 versus $10.9 billion in dial-up revenues, broadband has already outpaced dial-up as a revenue-generating opportunity."

In-Stat said about 35 percent of the respondents to its Consumer Telecom Survey said they currently buy a bundle of telecom services from a single provider.

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