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Value-added services provided by broadband operators such as VoIP and IPTV added nearly 37% to basic broadband subscription revenues in 2010 and generated almost US$ 60bn worldwide, according to UK-based analyst firm Point Topic.

In aggregate terms, total broadband access revenues increased from US$ 129bn worldwide in 2009 to US$ 157bn in 2010, according to the report, based on a calculated average monthly broadband cost of US$ 28 at the end of 2010.

During the same period, total value-added services revenues are estimated to have increased from US$ 48.8bn in 2009 to US$ 57.5bn in 2010.

“The trend we’ve observed since 2003 reflects the fact that more people are doing more things via their broadband connection," said John Bosnell, senior analyst at Point Topic. "We estimate that at the end of 2010 each broadband line supported an average of 1.95 value-added services. That’s almost four times the average in 2003."

In terms of revenue generated, Voice over IP is believed to be the most valuable service, with managed services that offer a substitute for PSTN generating just over US$ 17bn in 2010 through 120mn subscribers.

“In contrast, Skype generated revenues 20 times smaller, with US$ 859mn earned during 2010, although this is for a service that offers different features to the ‘full service’ VoIP, and which most users enjoy for free,” stated Mr. Bosnell.

This upward trend highlights the increasing penetration of value-added services, according to Point Topic, as well as the fact that competition is reducing margins in the basic broadband business, so that revenues from broadband value-added services become proportionately more important.

“It remains to be seen how much, if at all, the figure for 2011 will go up after the slight slowdown in 2010. The pressures on household budgets have already seen some services decline in some markets but we expect such reductions to be limited and short term,” concluded Mr. Bosnell.

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