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The internet access market is growing well, but deceleration may be on the cards
The global internet access market grew at a good rate in 2012, despite some minor deceleration from previous years. Internet access, in general, is becoming more of a necessary lifestyle expenditure in many developed markets, meaning that consumers consider internet access to be something they are unlikely to go without. Even in times where disposable income is fairly low, we see consumers retaining internet access contracts. This is good news for the future of the market as although in coming years some regions will eventually become saturated, they are likely to be protected from real decline in the future. This need for the product means that buyer power in the market is unlikely to become particularly strong in the future if levels of competition remain similar.
The global market grew by 7.1% in 2012, to reach a value of $242.4 billion. This represents a compound annual growth rate (CAGR) of 13.8% for the period 08-12. Volumes also increased in 2012 by 4.9% to reach a volume of 573.1 million subscribers representing a (CAGR) of 10.2% for the period 08-12. The global market is difficult to characterise as a whole because it contains regional markets that are very different, however the trend in most regions is for the internet access market to be growing well and new technologies are providing a platform for growth in value.
The Asia-Pacific internet access market is the largest of the regional markets representing 39.8% of the overall value. Despite this current dominance it is also the region with the most potential for growth. For instance South Korea is one of the most highly developed markets in the world producing download speeds that are superior to even western markets. However the market also contains China and India, two countries with vast populations and huge potential for future growth.
The Americas region represents 28.3% of the global market. It produced good growth this year and could in the future be a good source for growth as South America continues to develop its infrastructure and rapidly growing markets such as Brazil become more reliant on internet access.
The European market accounts for 31% of the global internet access market. The European market, being one of the most developed in terms of saturation and technology, is forecast to be on a decelerating path within the next few years as growth is slowing down and becoming more stable.
Technology in the market is improving constantly and both customers and providers are striving for higher speeds, more bandwidth and better connectivity. This is also linked to the habits of consumers who are downloading and watching higher quality videos, full length films, higher quality music, browsing more technical and advanced websites, cloud computing and commercial customers that are developed huge data stores requiring excellent internet connectivity for constant access. Many new internet devices require a continual access to the internet in order to function and this demand means network providers must continually upgrade networks.
For more, please read our ‘Internet Access Industry Reports’.