Canadian ISP market continues to grow, says report

Despite the threat of an economic slowdown the market for Canada’s Internet Service Providers (ISP) will actually continue to grow, an industry research firm predicts.

Over the next four years ISP revenues in Canada will grow by a compounded annual rate of over 20 per cent between 2000 and 2004 and the number of subscribers will grow by more than 25 per cent annually over the same period, said NBI/Michael Sone Associates, a telecommunications research firm.

Last week, the research firm released their 185-page tome entitled the Canadian Internet Service Providers Market Report, 2001 Edition. According to the research firm the report examined all aspects of the market including market sizing, share and forecasts for dial-up, high-speed and dedicated service, marketing trends, regulatory issues, technology drivers and future directions.

In an interview with IT World Canada, Michael Sone said that the growth in Internet subscribers would occur as the Internet sees increased penetration. While Canadians do have access to the Internet through their workplace, schools and public libraries – the number of subscribers, or those who actually purchase Internet services, was only 6.5 million Sone’s research indicated.

However, for ISPs the revenues generated from access and connectivity alone will not be able to sustain them in the future and they will have to generate new sources by becoming application service providers (ASP) with hosting and professionals services, Sone said.

“An ISP can no longer differentiate themselves from their competition by price it’s the same as what happened in the long distance industry,” commented Sone.

Already Canada’s ISPs are making the conversion from an ISP to an ASP as NBI/Michael Sone Associates reported that less than 80 per cent of ISPs revenue comes from access and connectivity.