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BizReport : Trends & Ideas archives : June 18, 2007

Rich media brings telecoms back from the dead

It isn't just users who are benefiting from the surge in content creation and delivery related to blogs, uploaded videos and other forms of rich media. Telecom companies can credit these forms of broadband usage for bringing their companies back into the black.

by Kristina Knight

According to a recent Business Week report the online bust of 2000 hit many telecoms hard, but the companies are now providing the infrastructure for downloading music, videos and other content forms which is creating a boost to their lagging revenue numbers.

"All of us are planning expansions of our backbones in order to support growth in Internet applications and video," says Dan Yost, executive vice-president for product at Denver-based communications provider Qwest Communications International Inc. (via BusinessWeek).

In 1998, the peak of Web 1.0, online revenue hit $65.8 billion in the US. In 2007, online revenue is expected to reach $72 billion. And with more users logging on via broadband connections (broadband is expected to exceed the 50% mark this year), that number could be even higher. However, with telecoms reacting to Web 2.0 technologies instead of pioneering their own way, they aren't benefiting as much as they could.

According to some, with the decline of wireless phone subscriptions (expected this year) telecoms could face another bust similar to that of seven years ago. However, if they play things right and move to creating better ways of sharing online content, that bust could prove to be nonexistent.

Tags: broadband, broadband penetration

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