Internet access in Britain is to become a #1 billion business within five years, according to a report from City brokers Durlacher & Co Ltd, and telecommunications companies could miss out on this crucial growth and lose traditional telephone revenues to a brace of new companies. This #1 billion business is expected to grow out of just #35 million today which are currently spent on existing services for Internet access and related services. Durlacher warned that the explosive growth of the Internet in the next few years would pose a serious threat to traditional telephone companies such as British Telecommunications Plc. It points to the arrival last year of a number of software packages that enable users to make phone calls over the Internet to anywhere in the world, adding: The Internet will soon be capable of international calls at local prices. The downward pressure on telephone prices will make it harder for traditional phone companies to charge for calls according to their duration. There will then be a move towards charging for access and content, Durlacher says. The report, prepared by Durlacher Multimedia in conjunction with the Intervid Internet consultancy, estimates that there will be 33.4m people connected worldwide to the Internet by early this year, rising to more than 200m by 2002. A Durlacher spokesman said the firm expected the number of UK corporate subscribers, linked to the Internet through leased lines, to rise to about 40,600 in five years, while dial-up subscribers would top 5.5m. The report accepts that retail sales via the Internet are still very low, but says they will grow rapidly after the arrival of commonly-accepted security standards later this year. A survey of 250 users suggested that 23% had already bought something via the Internet, while more than 50% would if security were improved. The report says that the Internet will begin to creak a bit as increased use of audio and video transmissions eats into the network’s capacity.
