SME broadband providers 'must diversify'

Broadband providers need to diversify and must look to broadband managed services in order to sustain small and medium-sized enterprise (SME) spend in Western Europe, according to a new Analysis report.

The company surveyed 184 SMEs across France, Germany and the UK and found SME expenditure is set to peak in 2009 and reach 9.7 billion by the end of 2011, up from 5.7 billion in 2006.

"From 2010 onwards, downward pricing pressure is expected to outweigh take-up of new broadband access connections by SMEs in Western Europe," said the report's author, Simon Sherrington.

"This will push the value of the Western European SME market for broadband access into a slow decline. In order to sustain revenue growth, providers targeting the SME sector must introduce complementary services, and provision of broadband managed services is a key area for exploitation."

The report also found that 65 per cent of SMEs prefer to buy their telecoms services from a single provider rather than from multiple suppliers, increasing the potential for bundled services and triple and quad play services.

Analysis added that a "substantial percentage" of SMEs would be willing to buy managed services from their broadband providers, even if the services are sourced from third-party suppliers.