Competition will heighten in the market

According to the latest International Data Corporation (IDC) report, Internet Service Provider Market Review and Forecast, 1998-2003, revenues in the U.S. Internet service provider (ISP) market are expected to soar 41% from $10.7 billion in 1998 to $15.1 billion in 1999. They will increase at a compound annual growth rate of 28% through 2003 to $37.4 billion, making the ISP market the fastest-growing telecommunications market ever. IDC splits the ISP market into four market segments: corporate access, individual access, wholesale, and value-added services. In 1998 the individual access segment was the largest, with $4.7 billion in revenues. It will maintain its position as the largest segment until 2003, when value-added services will wrestle away the top spot. America Online owns the largest share of the overall market, with 23%. MCI WorldCom is second, with 17%. They are MCI WorldCom in the business and wholesale markets and AOL in the consumer and value-added services markets. The next closest competitor is MSN with only 12%. In the corporate access segment, MCI WorldCom_s 1997 share was 27%, almost four times more than its closest competitor, IBM Global Network, which owned only 7% of the market. Other than AOL and MCI WorldCom, IDC expects significant growth from AT&T/CERFnet, GTE Internetworking, and PSINet. However, IDC believes competition will heighten in the market.