It's the Service, Not the Service Provider - 2002 Business ISP Review

In-Stat/MDR forecasts that the US Internet backbone market will have virtually no growth over the next five years, but business access services will continue to grow at a low single digit rate.

In-Stat/MDR also found, based on a survey of 200 US based ISPs, that Internet access remains the number one revenue source for business-oriented ISPs. Access services generate approximately 46.9% of revenues. The most common access services sold by business-oriented ISPs remain dial-up and dedicated access.

Other services generating significant service revenues include Web hosting and value-add services, such as IP-VPN and managed security.

This report contains a five-year revenue forecast for business access and Internet backbone services. Market share for each service is also included. This report also contains results of the In-Stat/MDR 2002 ISP survey. Survey questions include - types of access sold, percent of revenues by service, and ISP attitudes toward selling DSL and cable modem services.

Executive Summary

Methodology

Introduction

Major Market Happenings

Business ISP Services

Access

Access Price Structure

ISPs and the Selling of DSL and Cable Modem Service

Service Level Agreements

Web Hosting

Value-Add Services

Service Forecasts

Market Players

Conclusion

List of Tables

Table 1. Stock Price Performance for Selected Service Providers

Table 2. Selected Service Provider Headcount Reductions for Year 2002

Table 3. US Business-Oriented Internet Access Offerings

Table 4. US Business Internet Access and Backbone Service Revenues, 2001 - 2006

Table 5. US Consumer and Business Internet Access Revenues, 2001 - 2006

Table 6. US Business Internet Access Market Share for Years 2000 and 2001

Table 7. US Internet Backbone Market Share for years 2000 and 2001

Table 8. Percent of 2001 US Business Internet Access Market Share in Chapter 11

Table 9. Percent of US Internet Backbone Market Share in Chapter 11

List of Figures

Figure 1. US Business Internet Access and Backbone Service Revenues, 2001 - 2006

Figure 2. Year 2002 Revenue Breakout for US Business Oriented ISPs

Figure 3. US Business-Oriented Internet Access Offerings

Figure 4. Wireless Spectrum Offering

Figure 5. Internet Pricing Options

Figure 6. Local Loop and Internet Port Bundling

Figure 7. ISP Attitudes towards Successfully Selling DSL or Cable Modem Service

Figure 8. Why ISPs Feel They Can't Successfully Sell DSL or Cable Modem

Figure 9. Percent of ISPs with a Negative Attitude towards DSL and Cable Modem Considering Fixed Broadband Wireless

Figure 10. Service Level Agreement Offering and Reparations

Figure 11. Service Level Agreement Coverage Areas

Figure 12. Basis of Service Level Agreement Reparations

Figure 13. US Business-Oriented Web Hosting Offerings

Figure 14. IP-VPN Service Offerings

Figure 15. Security/Filtering Service Offerings

Figure 16. US Business Internet Access and Backbone Service Revenues, 2001 - 2006

Figure 17. US Consumer and Business Internet Access Revenues, 2001 - 2006

Figure 18. US Business Internet Access Market Share for 2001

Figure 19. US Internet Backbone Market Share for 2001