There are too many ISPs in Western Europe, says the UK-based telecoms consultancy Analysys in a new report released Thursday.
Although prices have been in free fall, the number
of ISPs at the end of 1998 was over 3,000 — and many more have been launched
in the past few months.
The report, entitled “Internet Service Providers in Western Europe,” notes that the
market cannot sustain such a high number of ISPs.
“Most of the factors encouraging market growth are short or medium term,” said the author of the survey, Dr, Philip Lakelin. “In the longer term, and that really means only the next few years, the Internet access market will become considerably more streamlined.”
According to Analysys, the countries with the most ISPs are Spain and Germany, with
600 each. Spain, with a population of under 40 million, has an Internet base
of just 2.5 million users, compared to the UK’s Internet base of 10.6 million
users and half the number of ISPs.
Lakelin goes on to say that the ISP industry in Western Europe is being driven
through parallel cycles of fragmentation and consolidation. Diversity will
remain, but the major players will be those who provide extensive services with
strong branding, such as AOL-Bertelsmann Europe, Freeserve and Planet Online.
According to the report, revenue sources for ISPs will shift entirely away
from access provision towards advertising, ecommerce transactions and content