15/01-04   -   Pressmeddelande

Consumer Dial - Down But Not Out, Says IDC

Although the decline of consumer dial Internet access - relative to broadband Internet access - is now well underway, it will be a long-term process, and consumer dial services are unlikely to disappear any time soon. This is just one of the predictions made in IDC´s
latest study, entitled Western Europe Consumer ISP Market Analysis, 2003. The study suggests that the decline in dial has started across most of Western Europe, as the uptake of broadband begins to have an effect on the shape of the market. Nevertheless, in some markets dial services continue to grow, and in recent months the market has even seen the introduction of new flat-rate dial offerings and wholesale FRIACO (flat rate Internet access call origination) products.

The ongoing importance of dial services needs to be clearly understood by the market´s leading consumer ISPs, many of which continue to put an overriding emphasis on their broadband service portfolios. Of the four largest ISPs, Tiscali´s and AOL´s broadband customers represented 7% and 9% of their total Western European (consumer) customer base at the end of 2Q03. In contrast, incumbent-owned T-Online´s and Wanadoo´s broadband customers represented 25% and 20% of their total (consumer) Internet customers. Meanwhile, in their home markets the broadband share of the total is considerably higher, with broadband users representing 28% of T-Online´s Internet consumer customers in Germany and 33% of Wanadoo´s consumer customers in France.


In Germany, T-Online faces competition from freenet.de, which launched a broadband service in 1Q03, and Arcor, whose broadband customers represented just 3% of total active users. Meanwhile in France, Wanadoo´s second largest dial competitor, Free.fr, had a broadband customer base that represented 7% of its total customer base. These differences demonstrate the extent to which the incumbents have a lead on their main dial competitors in the area of broadband service rollout. They also demonstrate the extent to which many ISPs will continue to be dependent on revenue from dial services in the short to medium term.

The study asserts that, between 2003 and 2007, Internet usage in Western Europe will continue to grow. According to Chris Drake, a senior analyst with IDC´s European IP Services research service, "As providers of both dial and broadband services seek to migrate their dial customers to broadband, they must ensure that they continue to support the needs of dial customers. Some providers are already discovering that disillusionment with their dial service can lead to churn, with dial customers moving to the broadband (or dial) offerings of rival ISPs." Drake suggested that "it remains the case that many Internet access consumers have no immediate intention or even ability to migrate to broadband. ISPs therefore need to ensure that a broad range of dial access offerings and pricing plans are available, and that the introduction of new value-added services and online content is not purely reserved for broadband customers."

Western Europe Consumer ISP Market Analysis, 2003 (IDC #HC02K) provides detailed analysis of the status and development of the consumer Internet access market in 16 West European countries. It presents an overview of the market´s largest consumer ISPs and analyzes the key trends that are likely to shape the market over the next few years - including the development of online content services. Market share data for 4Q02 to 2Q03 is provided for the leading ISPs in all 16 countries.

This study is available to purchase from your local IDC office.

About IDC
IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

IDC is a subsidiary of IDG, the world´s leading technology media, research, and events company. Additional information can be found at www.idc.com
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For more information, contact:
Chris Drake
+44 (0) 20 8987 7147
cdrake@idc.com