Euro Net market too small to support so many ISPs

Expect many fatalities, warns report

Survey ISPs across Western Europe could be in for a torrid time as competition continues to hot up in the marketplace. Although there are some 3000 ISPs in Western Europe chasing a $10 billion industry, those unable to stand the heat will simply be left to fry. That's because Internet demand is exploding, prices are in free fall, and companies are being forced to seek more innovative ways of appealing to customers. In its report Internet Service Providers in Western Europe, Cambridge-based research group Analysys Publications claims the market cannot sustain such a high number of suppliers. "Most of the factors encouraging market growth are short or medium term," said Dr Philip Lakelin, author of the survey. "In the longer term, and that really means only the next few years, the Internet access market will become considerably more streamlined. We expect to see fierce, cutthroat competition among the brand-driven and content-based ISPs in the coming years. "Casualties are inevitable among those that do not have flexible business models or the resources to sustain the losses that ensure continued rapid growth." Analysys believes that branded and content-based ISPs, such as AOL-Bertelsmann Europe, Freeserve and Planet Online, will continue to dominate the market. For other companies, such as retailers, it seems Internet access will be given away free as part of a standard loyalty package. ®

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