North American internet traffic is set to grow by 85% in 2002 but revenues are unlikely to rise accordingly. These are the findings of a new report by telecoms market research firm, RHK.
RHK’s quarterly market update report reveals that revenue growth will remain flat, quarter-over-quarter, totalling $15.7 billion for the year. Revenue-per-bit is set to fall by 46% as a result of price reductions, better use of higher bandwidth pipes by enterprise customers and declines in wholesale dial-up business.
“The major impediment to more rapid revenue growth is strong downward price pressure for Internet services,” said Shing Yin, Senior Analyst for RHK’s Network Traffic & Revenue Analysis program. “Inevitably, pricing plans will become more closely correlated with usage in order to derive greater revenues from the heaviest bandwidth users.”
According to RHK, AT&T is set to emerge as North America’s leading traffic carrier. However, despite its well documented financial problems, WorldCom still leads the way in terms of revenue. “Any impact on WorldCom’s network and customers due to its current troubles will take months to play out,” said Yin.
