Value-Added Services an ISP Revenue Play as Broadband Growth Flattens, Says Parks

With broadband growth flat, the next ISP revenue growth opportunity is value-added services, blogged Parks Associates' David Drury Thursday. Adoption rate for stand-alone internet service grew from 34% in 2017 to 42% in Q1, said the analyst. Average service rates grew 36% from Q1 2012 to Q3 2019 to $60 monthly. That compares with average monthly rate growth from $107 to $127 for TV and internet service. “Providers have generally used [value-added services] VAS as a marketing tool to attract and retain subscribers," said Drury, so for them to successfully make the transition to a revenue-producing source, "companies need a clear understanding of the gaps in consumer satisfaction and demand for strategic and successful VAS deployments." VAS has little impact on ISPs’ average revenue per user because speed is the primary driver of ARPU, said Drury.