'Smaller' internet service provider market worth £1.15bn

The smaller ISP market has a collective turnover of £1.15 billion per year, according to Ofcom's study.

Ofcom has published new research into the niche Internet Service Provider (ISP) market. The research focuses on smaller ISPs, typically those serving companies with fewer than 30 employees or a small number of residential customers. The research was commissioned during 2006 following requests from industry stakeholders.

The smaller ISP market has a collective turnover of £1.15 billion per year. It comprises nearly 700 service providers serving 30% of UK business customers and 5% of UK households. Based on interviews with more than 300 smaller ISPs, the research shows that:

* Niche ISPs offer a broad range of services from internet connectivity and web-hosting to consultancy;

* More than half (54%) of niche ISPs surveyed claim their approach to service provision, offering personalised products rather than standard packages, give them an advantage over larger ISPs;

* Around 9 in 10 (90%) of niche ISPs have 30 employees or fewer;

* Niche ISPs are relatively geographically dispersed; more than half are based outside London and the South of England.

The research will help inform Ofcom's policy work including the ongoing Wholesale Broadband Access Market Review which assesses the obligations on BT Group plc to provide other ISPs with wholesale broadband services such as IPStream.

The research is published at: http://www.ofcom.org.uk/research/cm/nicheisp/

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