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Survey: ISPs Predict High Revenue from Business Community

Internet Service Providers believe most of their projected revenue growth will come from business customers, according to the results of a recent survey.

Conducted by KPMG and Planet Direct, a localized content provider for ISPs, the survey polled close to 250 ISPs throughout the month of February, with a 15% response rate.

The results show that ISPs expect an 86% growth rate from 1997 to 1998. Close to 128% of this growth rate is projected to come from the business sector and 66% from residential consumers, even though currently most of their existing customer base is residential. ISPs earn $33.95 per business subscriber versus $13.50 per residential consumer.

In addition, ISPs responding to the survey reported that business customers are less likely to cancel their subscription--with a 1.6% cancellation rate--as opposed to a 3% drop-out rate for residential subscribers.

The survey also found that smaller ISPs, with 10,000 customers or less, are reporting greater profitability than larger scale ones, and that the costs for customer support are not rising as more subscribers are added to their client base.

Furthermore, ISPs reported an increase in marketing efforts, with 66% focusing their campaigns in the educational sector, 34% the government, and 31% other groups.