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Our predictions for 2001 (15 February 2001)

Late last month Sunil wrote a piece which was printed in the Daily Telegraph. It turns out not to be available from the Electronic Telegraph so, with permission, we reproduce it here.

Writing an article such as this, stating my Internet predictions, at any time during the last few years would, I believe, have been reasonably easy. Then, it was relatively obvious that Internet use would increase dramatically and that, after the first, there would be many Freeserve-type ISPs funded from a cut of the income generated by calling them.

Again, while the speed and scale of last year's stock market fascination with dotcom companies took most by surprise, that a rise (and a subsequent fall) would occur at some stage was easy to predict.

2000 was an exciting but exasperating one for Internet users in this country. Services offering unmetered access finally began to proliferate but, as we consistently warned would happen, many were withdrawn months later in a quagmire of service and financial problems. AltaVista, whose offer initially attracted the most attention, ignominiously cancelled its unmetered service without even ever launching it.

So what do I think will happen over the next 12 months?

Well, for one I believe that both Internet use and the percentage of the population accessing it will continue to increase (naturally!). It is even possible, for a period of time, that the figures for the UK will temporarily surpass those of the USA. Growth will be encouraged by ISPs (such as BT Internet and Freeserve) finally offering FRIACO-based unmetered products - that sounds very technical but really just means that these products are sustainable, unlike those offered previously Ė and by the cost of computer hardware continuing to fall.

As part of this trend, you should expect to see a few large ISPs dominate the market: even these will not own their own modems but instead rely on companies such as BT, Energis and Level 3 to run the service. The role of mass market ISPs in future will be little more than to deal with customer billing and technical support issues, competing much less on price and much more on content and quality of service

In addition, during 2001, high-speed broadband connections such as ADSL and cable modems will finally begin to appear in selected areas. However, donít expect widespread usage of these technologies this year unless prices are lowered. The ISP market will gradually return to the 'pre-Freeserve' days where paying a monthly subscription fee was normal.

Having dealt with the cost and ability to connect to the Internet, what will happen online? For one, peer-to-peer file sharing, popularised by applications like Napster, will continue to flourish, as will online shopping and banking. While the most optimistic expectations of dotcom companies won't be met, most can expect steady growth. Another area I expect to take off in a big way this year is Voice over Internet Protocol (VoIP). Many Internet users will realise that it's possible for them to hold phone conversations over the Internet for virtually nothing using this technology.

Many firms will continue to go bust: if a business plan is weak, it will fail - it doesnít need to be an internet business for that to happen! Traditional retailers will continue to adopt the 'clicks and mortar' strategy, attempting to exploit their brand names in cyberspace, but donít be surprised if you suddenly see 'Internet only' companies deciding that a physical presence isnít such a bad idea after all.

One of the most over-hyped products of 2000 was wireless Internet access (just look at the vast sums paid for UMTS licences) - while it will happen one day the first implementations of WAP have been grossly disappointing. For mobile phones 2001 will be the year of GPRS: while this will be a boon to some businesses, individual consumers having been burned with WAP are probably better off waiting for third generation products that should be available sometime in 2002.

In conclusion, I argue that the last few years of the 'Internet revolution' have been revolutionary, but I expect that 2001 will be evolutionary where existing gains are consolidated before the pace of change steps up again in 2002.

Of course, youíll have to ask me next year if Iím right or not :)

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