Internet services mkt to hit $634 m in 2004: IDC study

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The value-added Internet services segment is projected to fuel growth in the Internet service provider (ISP) market and is likely to grow to $634 million by 2004 from $4 million in 2000, according to a study by IDC (India).

Called ‘ISP Market in India’, the study analyses the future trends in the ISP market, with special focus on the future roadmap of value-added services. According to the study, the explosive growth in the ISP market is likely to come from a host of value-added services that would pick up in India in the coming years.

Business models of ISPs may slowly move away from revenue streams focused on the basic access services to value-added services, as a result of the excess capacity created in the form of fibre optic cables and bandwidth.

The motivator for adoption of these value-added services is going to be cost-reduction and productivity enhancement through cheaper and better communication capabilities.

The value-added services market is still quite nascent, but is likely to grow at a compounded annual growth rate (CAGR) of more than 159 per cent for the period 2000-2004, according to IDC study. The real drive in the value-added services marketspace is expected to come after 2002, when the monopoly of BSNL ends in the voice market.

The study projects that the hosting services and application services market will start taking shape around 2003 as the domestic bandwidth availability situation improves in India (due to increased availability of international bandwidth and creation of extensive fiber optic backbone infrastructure).