Value-added services more than double in 2005

Broadband value-added services (BVAS) grew strongly during 2005. Whilst revenues from services to residential customers grew by almost 74% during 2005, business revenues increased from $3.7 billion at the beginning of the year to almost $9 billion at year-end - a growth of around 142%.

The numbers come from the third edition of Point Topic's report 'The Business BVAS Market'. According to the report, business BVAS revenue was running at an annual rate of $9 billion at the end of 2005, with total access revenues valued at $24 billion.

The average revenue per user (ARPU) increased from $15 at the start of 2005 to $26 at the end of the year. "This suggests that a growing number of businesses are using their broadband connection to do more than just access email or the Web faster", says John Bosnell, Senior Analyst at Point Topic.

"They are increasingly using broadband to improve their business processes by introducing VPNs, or reducing capital expenditure by renting software services from an application service provider, for example."

Security remains the dominant service that people pay for, corresponding to 60% of the revenues. "Security spending dominates the value-added services market because it is ubiquitous. Almost every business broadband line has some form of security service on it", points out Bosnell.

Overall, the key value-added services retained similar shares of the market from the beginning to the end of 2005, with no significant 'winners' or 'losers'.