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SCOTTSDALE, Ariz., November 18, 2003 – While still very small compared to the prepaid phone calling card business, prepaid Internet has strong potential for considerable uptake by businesses and consumers reports In-Stat/MDR (http://www.instat.com). The high-tech market research firm estimates that US prepaid Internet retail services revenues were about $30 million in 2002 and are expected to grow to about $50 million in 2003, driven by the entrance of AOL and Verizon into the market, as well as strong expected growth by some of the small service providers. From 2002 – 2007, the market will continue to grow, experiencing a projected 45% CAGR in revenues.

"The pay-as-you-go flexibility of prepaid Internet services offers an attractive alternative to subscription Internet services for many different types of users. Travelers, infrequent users of the Internet, consumers without credit, and a variety of other groups can gain considerable cost savings or convenient access to the Internet using these services," says Henry Goldberg, a Senior Analyst with In-Stat/MDR. "The small/pure-play prepaid Internet service providers are aggressively pursuing this market, and are expecting solid growth in coming years." Major service providers may still be concerned about cannibalizing their subscription Internet services, and so have not heavily advertised the cost benefits of these services for budget-conscious users. However, according to Goldberg, "Once one major service provider does decide to put considerable advertising resources into this area, and attracts a sizeable customer base, that will likely get the ball rolling and force other service providers to compete." When this happens, In-Stat/MDR expects prepaid Internet to take a more significant share of the overall Internet access market.

In a recent survey of business end-users, In-Stat/MDR found that:

• About 9% of the surveyed organizations had purchased a prepaid Internet service for some of their employees at some time in the past and about 19% said they were likely to purchase a prepaid Internet service in the next year.
• The most compelling reason for businesses to purchase a prepaid Internet service is for business travelers who have broadband Internet access at home, and want low-cost, dial-up access while traveling.
• The manufacturing and education & government sectors had the highest percentage of organizations that have ever purchased a prepaid Internet service.

The report, Prepaid Internet: Small Now But Plenty of Potential (#IN030624TX), displays the results of a survey of 654 business end-users, indicating their past purchases of prepaid Internet services, plans to purchase prepaid Internet in the next year, reasons for using these services, and preferred service providers. Profiles are given of 9 leading prepaid Internet service providers in the US: AOL, AT&T, Budget Dialup, Global Communication Services (Slingshot brand), MaGlobe, Pine Creek Systems, RemotePipes (TollFreeISP service), Sprint, and Verizon. Also profiled is ASP International Solutions, a supplier of a prepaid Internet management platform that enables the implementation of such services. The report concludes with a five-year forecast of the US prepaid Internet market.

To purchase this report, or for more information, please contact Rick Vogelei at 480-609-4533; rvogelei@reedbusiness.com. The report price is $2,995 U.S. Dollars.

For more information, contact: Henry Goldberg, Senior Analyst
Phone: 480-609-4510; Email: hgoldberg@reedbusiness.com