Pyramid Reveals Making Network Neighborhoods Legal Could Double AME's Fixed Broadband Revenue.

Migrating illegal Internet sharers (network neighborhoods) to legal Internet connections could more than double the AME's fixed broadband revenue by the end of 2015, assuming smart strategies could be adopted by ISPs, operators, regulators and online market players, according to a new report released by Pyramid Research.

In Illegal Networks Cut Operator Revenue Streams by up to 50 percent, Pyramid said it discusses strategies that should be adopted by different market constituents to combat these neighborhood networks by making their subscribers migrate to licensed ISPs. Pyramid discusses these strategies in detail and then looks at case studies from Egypt, Saudi Arabia and the most recent move of the global giant Yahoo! to the Arabian markets.

"So-called neighborhood networks are one current inhibitor of operator growth in the AME region," according to Hussam Barhoush, Senior Analyst at Pyramid and author of this report. "Although neighborhood networks are a challenge for licensed operators, it is imperative for market players to deal positively with this reality and take advantage of opportunities that may emerge from this phenomenon," he adds.

According to a release, report author Hussam Barhoush discusses what local providers are doing to combat neighborhood networks in this podcast interview by Light Reading's Phil Harvey.

Neighborhood network users demand broadband services but are more satisfied by paying a lower price, even though this may mean a lower quality of service. "Pyramid perceives this market segment as a niche that demands broadband connection but is only willing to pay a lower price than what is currently being offered in the target markets," indicates Barhoush.

Pyramid believes that smart strategies can be adopted by market constituents including ISPs, operators, regulators and online market players to combat this phenomenon and compel neighborhood network subscribers to migrate to regulated formats. "If Pyramid applies AME's current Internet ARPS and excluded any price sensitivity issues, we can easily see the region's total potential Internet revenue more than double, reaching US$17.2 billion, up from the current revenue of $8.3 billion," says Barhoush. "While this approach is over simplistic, it provides a best case scenario of the total opportunity to be addressed by operators."

Illegal Networks Cut Operator Revenue Streams by up to 50 percent is part of Pyramid Research's Telecom Insider Report Series and is priced at $595. Download an excerpt or purchase the report here.

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