ISP Market To Soar To $37 Billion, Researchers Report

Revenues in the U.S. Internet service provider (ISP) market are expected to soar 41% from $10.7 billion in 1998 to $15.1 billion in 1999, based on research conducted by International Data Corp. (IDC), a Framingham, Mass.-based market research firm specializing in information technology. They will increase at a compound annual growth rate of 28% through 2003 to $37.4 billion, making the ISP market the fastest-growing telecommunications market ever, according to the report. "The key growth drivers in the near term are a mix of new customers and existing customers' expanded spending," says Mark Winther, vice president, worldwide telecommunications, IDC. "Growth in access will slow in 2001, but value-added services will pick up the slack. By 2002 and 2003, annual revenue growth will accelerate and increase by $5.7 billion and $8 billion, respectively. This reflects the coming of age of ISP opportunities in value-added services such as e-commerce, virtual office, unified messaging, multimedia networking, etc." IDC splits the ISP market into four market segments: corporate access, individual access, wholesale, and value-added services America Online owns the largest share of the overall market, with 23%. MCI WorldCom is second, with 17%.