Global broadband revenues to decline, analysts predict

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Global broadband revenues to decline, analysts predict

Despite a growing demand for enterprise broadband access, falling prices could mean a decline in global broadband revenues during the next five years, analysts say.

According to analyst and consulting firm, Ovum, enterprise uptake of Voice over IP (VoIP), network-based applications and next-generation technologies are expected to drive demand for broadband access.

Ovum expects broadband connections to grow from 59.8 billion connections globally in 2007 to 87.6 billion in 2012, representing a compound annual growth rate (CAGR) of 8 percent.

However, subscriber growth will be insufficient to support revenues through an overall decline in broadband access pricing during the next five years.

Enterprise demand is expected to grow revenues from $59.4 billion in 2007 to $62.4 billion in 2009. However, revenues are expected to decline to $55.6 billion in 2012.

Analysts expect the decline in revenue to be driven by high competition and falling broadband prices in developing markets.

According to Melbourne-based Ovum analyst Claudio Castelli, the developing markets of China and India will overtake Western Europe to become the region with the largest rate of adoption of DSL.

“We see high competition for services and continued pressure on DSL pricing; however, demand is growing and counteracts this revenue loss,” he said.

“We forecast revenue increases in the China/India region with revenues rising from $18.1 billion to $23.1 billion in 2012, which will be more than 40% of the global market,” he said.

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