Point Topic says VAS adds 37% to broadband prices

Thursday, November 24th 2011

Services such as internet security and VoIP are driving up the cost of broadband.

Point Topic says VAS adds 37% to broadband prices

Value-added services (VAS) increased the basic cost of a broadband subscription by more than a third last year, according to new research from Point Topic.

The broadband analyst revealed products such as internet security, internet protocol TV and voice over internet protocol (VoIP) added almost 37 per cent to basic prices, representing an extra .20 (£6.50) on top of the typical monthly broadband subscription of .

From 2009 to 2010, total broadband access revenues rose from 9 billion to 7 billion, representing an overall increase of 14 per cent, while VAS earnings climbed to .5 billion from .8 billion over the same period.

Excluding Skype, VoIP revenues stood at more than billion at the end of last year with 120 million subscribers, leading Point Topic to estimate it is the most valuable addition to broadband services.

In contrast, the revenues generated by Skype were 20 times smaller at 9 million, although the analyst pointed out it offers different features to VoIP and can often be used free of charge.

John Bosnell, senior analyst at Point Topic, claimed the results suggest that VAS broadband add-ons are beginning to level out in terms of overall growth, despite the fact revenues are still continuing to climb.

"The trend we've observed since 2003 reflects the fact that more people are doing more things via their broadband connection," he added.

"We estimate that at the end of 2010 each broadband line supported an average of 1.95 value-added services. That's almost four times the average in 2003.

"It remains to be seen how much, if at all, the figure for 2011 will go up."

At this time last year, Point Topic rated the UK as offering the 24th best-value broadband in the world, far behind Hong Kong in first place.

Japan and Romania also fared well in the survey, taking second and third places respectively.

Point Topic says VAS adds 37% to broadband prices

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