ISP prices set to rise by up to 15%

Analyst firm Meta Group has predicted that prices for international managed Internet provision will rise by between 10% and 15%...

Analyst firm Meta Group has predicted that prices for international managed Internet provision will rise by between 10% and 15% during the coming year as the fallout from the turmoil in the telecoms industry begins to settle.

Meta Group said prices would broadly increase for managed services - those where the telco does more than simply supply the medium of transmission - as the downturn in the telecoms market reduces the number of competitors and produces a more stable market.

However, it warned that customers should not be overly concerned with price, but should instead focus on continuity of service.

In the longer term Meta sees general telecoms prices increasing in 12 to 18 months' time as the shrinkage of the market comes to an end, though prices will fall until then.

WorldCom's troubles have been described as "the beginning of the end" of instability for the US telecoms sector, although Meta Group predicts that Europe will see more bankruptcies in coming months.

Maureen Coulter, an analyst at Gartner, said, "We have probably seen the peak of carriers going out of business and, apart from the odd blip, we should see things quietening down. Prices should stabilise, though we will likely see service providers fighting over price."

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