Sydney- Web 2.0 businesses are very good at driving traffic growth on broadband networks and pushing up costs, but they offer telcos no new revenue, warns Ovum Research Director David Kennedy. Citing the trend in Australia, where voice revenues are shrinking, Kennedy contends it is getting harder to justify FTTN (fibre-to-the-node) investment, let alone FTTH (fibre-to-the-home). “Are consumers so enamoured of YouTube and its future progeny that they will pay higher prices or extra taxes to fund a FTTH access network?” he asks. “If so, then Web 2.0 may even turn out to be the telcos’ saviour, the killer app they’ve been looking for to drive access revenue. “But the observed customer reluctance to pay higher prices for higher speeds suggests another outcome. Google shares trade at ridiculous multiples on the assumption that customers will pay for this infrastructure. If the traders are wrong, then Web 2.0 may become Bubble 2.0, and we will find ourselves in a FTTH investment gridlock.”