DSL will threaten telcos, driven by porn - Ovum
Published: 03 Nov 1999 17:58 GMT
The emergence of DSL technology , driven in the consumer arena by a lust for porn, will have a "drastic effect" on the revenues and tariffs of telcos and service providers according to Tim Johnson, the founder of research firm Ovum.
As DSL becomes mainstream, businesses and individuals will be presented with an alternative way of paying for high bandwidth and continuous Internet access, forcing telcos and service providers to rethink tariffs, according to Johnson. Businesses that previously paid up to £1,500 per month for high bandwidth will be able to access DSL for around £150 and individual users will have "always on" Internet for a fixed monthly fee.
"For users [consumers] DSL is an unmetered service -- £40 for continuous use. Users will not have to pay BT per minute any more," Johnson said. "DSL undermines all kinds of tariffs and threatens telcos. It will have a drastic effect on their tariffs and revenues.".While the prospect may not be to BT's liking, free ISPs like Freeserve will, according to Johnson, enjoy alternative business models DSL will bring. "They will be able to stay free for narrowband but they will also be able to offer users 10 times the speed for a monthly fee. It will be a nice evolution for them."
While some commentators remain unconvinced that DSL will have mass market appeal, Johnson predicts consumers will take-up the technology in droves by 2002. Porn will be a big driver. "Porn is the great unmentionable and a lot of people will happily pay £40 for broadband access to porn sites. They will get a much better view," he said. The ability to tune into thousands of radio stations around the globe will also be a popular application for DSL Johnson predicts. "If you are particularly interested in Mexican music or want to learn a language, you will be able to as niche radio becomes an important application of DSL," he said.
Johnson is critical of the high price BT has set for DSL. "They have chosen to set the price as high as they could get away with," he said. He predicts charges for the always on, high bandwidth technology will fall to around £30 per month as service providers package DSL with cheap phone calls, entertainment services, etc. "Service providers will have to learn that DSL will not be profitable by Internet access alone. They have got to offer other services like entertainment, video-on-demand, etc."
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