US Business Data Services Spending Headed for Slow Decline

In-Stat Total US business end-user data service expenditures will grow 0.3% to $36.6 billion by the end of 2005. Expenditures will increase slightly again in 2006, fueled by broadband Internet access and shifts to IP environments, but start a gradual decline in 2007 as a result of mounting pricing and competitive pressure. The wireline transport arena is becoming increasingly dynamic as many businesses migrate to lower-cost data services, such as IP VPN, and service providers of traditional data services respond with lower prices and shrinking margins. Business customers enjoy more alternatives and have the ability to increase bandwidth capacities without a proportionate increase in total cost of ownership.

• Carriers need to continue to diversify and integrate data services to meet business customers’ needs.

• Carriers should promote service bundling and integrated service offerings to sell managed and value-add services to the SOHO and small business markets.

• By the end of 2005, there will be approximately 4.7 million DSL and cable modem business subscribers in the US, an increase of nearly 1 million subscribers since 2004.

, Pressure Mounting: Wireline Transport Services 2005 Publ 20060207 VPN? Wikipedia Red Viking