U.S. Dedicated Internet Access Services Market Update

This innovation study covers the U.S. market for dedicated internet access services through the period 2008 to 2015. The analysis in the study is segmented by retail versus wholesale earnings, and percentage breakouts of earnings by service type. The wholesale portion of DIA is as well commonly referred to as high-speed IP transit services in the industry. This is referred to as wholesale DIA in this study. The study provides market share analysis based on earnings for the U.S. dedicated internet access services market only.

The U.S. Dedicated Internet Access services market has gone through some interesting changes in the past 2 years. Both retail and wholesale market segments experienced negative year over year growth rate from 2008 to 2009, primarily due to the economic downturn. The market earnings did rebound modestly in 2010, with the retail market recovering faster than the wholesale market.

The retail DIA services market

In the retail DIA services market, demand for traditional services just as T1/T3 and SONET is declining, now the growing demand for Ethernet services for enterprise bandwidth requirements is sustaining the market growth. As well, the increased focus on value-added services to manage revenue decline resulting from selling pure bandwidth has helped the market sustain revenue growth. VoIP (Voice over Internet Protocol), IP VPN, and managed security services are some of the value-added services being offered along with DIA.

The demand for high-speed IP transit services or wholesale DIA services is largely driven by the growth in bandwidth consumption by the consumer broadband market - particularly video applications. But, pricing pressure in the wholesale market has obviously led to reduced earnings overall.

Frost & Sullivan expects the total DIA services market to sustain year-over-year growth from 2010 to 2015. The growth in earnings will come primarily from the retail DIA services market as enterprises continue to invest in high-speed Internet services to run business applications: data center connectivity, contact center solutions, data back-up and recovery, VoIP, cloud-based services and others. Though most of these applications are typical drivers for adoption of private IP networks, the cost competitiveness of the DIA service serves as a key reason for its adoption by enterprises.