September 30, 2008

New Survey a Wakeup Call for Broadband Service Providers

A recently completed survey of U.S. consumers conducted by International Data Corporation (IDC) yielded results at odds with the views of many telecom policy makers and industry observers. The survey, which was conducted in August, focused on consumer views on broadband priority, bandwidth capping, and internet privacy. Given that many broadband service providers (BSPs) are contemplating offering premium bandwidth channels as well as imposing bandwidth caps and metered billing systems, these results are of critical importance to service providers of all types.

According to Matt Davis, director of multiplay research at IDC, "While some of the results of this survey were in line with expectations, others were significantly at odds with prevailing wisdom. Specifically, consumers continue to be protective of their privacy but are adamantly opposed to bandwidth caps and keenly interested in premium bandwidth services. These last two points may come as a surprise to those believing that bandwidth caps are inevitable and that consumers are unwilling to pay more for better services."

The survey produced these key conclusions:

On Premium Bandwidth Services

a) 94 percent of respondents saw value in BSP services that dynamically allocate premium bandwidth for certain types of traffic, such as video, VOIP, gaming, and telecommuter VPNs.

b) 54 percent would actively seek to change service providers if another BSP offered this service; 26 percent would be willing to pay their BSPs additional fees for premium bandwidth services.

On Bandwidth Capping and Metering

c) 81 percent do not like the idea of establishing a bandwidth cap and charging for use above the cap.

d) 51 percent would try to change service providers if their BSP imposed bandwidth caps. Interestingly, light and moderate users are even more opposed to capping and metering than are heavy users.

e) 83 percent either do not know what a gigabyte is or have no idea how many they use.

f) Only 5 percent said unequivocally that "those who use more should pay more."

Zeugma vice president of marketing Kevin Walsh adds, "These results are both an opportunity and a warning for BSPs. The opportunity is that consumers are signaling a willingness to pay more for dedicated bandwidth over and above basic high speed internet for such services as premium internet video, VOIP, gaming, and corporate VPN access. The warning is a clear distaste for bandwidth caps. At a minimum, providers moving forward with bandwidth capping schemes may want to consider a more intelligent and flexible application of caps." Walsh continued, "Zeugma customers are uniquely able to capitalize in these market characteristics by quickly prototyping and delivering advanced bandwidth allocation services and agile bandwidth capping mechanisms."

The IDC survey consisted of responses from 787 U.S. consumers and was conducted between August 18 and August 29, 2008. Contact Matt Davis, IDC at 508-935-4254 for additional information.

Source: IDC, IDC Survey Shows Consumers Support Smarter Networks, Doc # lcUS21449408, September 2008.

About Zeugma Systems

Zeugma Systems is a privately held telecommunications equipment supplier delivering open solutions that accelerate new service deployment for broadband service providers of all types. The Zeugma Services Node, a service delivery router, uniquely combines massive compute resources with a high-capacity data plane to yield reliable application integration and rapid turn-up of new services together with broadband aggregations and subscriber management. For additional information, please visit