ISPs must focus to survive

Internet Service Providers (ISPs) need to be more competitive if they are to survive, according to the latest study from analyst outfit Ovum.

It claims ISPs are failing to offer quality services as they struggle to be a full service provider. Daniel Bieler, consultant at Ovum and author of the report, said the quality of connectivity and content was below expectations and companies should concentrate on being either content or network providers.

He said: "Customers are demanding more professional services and more network reliability and most ISPs are failing to establish a competitive position in both markets."

The threat of digital television, Internet traffic congestion and a lack of sophisticated transaction capabilities for conducting ecommerce are all causing headaches for ISPs as they try to compete.

However, Bieler claimed mergers between successful ISPs would lead to a culling in the marketplace where "those who can turn obstacles into opportunities will be the long term winners".

The Asian market has already reached saturation point, with many ISPs going out of business.