Why most ISPs miss massive revenue opportunities from IPv4

• Internet service providers hold scarce IPv4 address space that could be monetised through leasing and transfers, but most fail to capture this revenue due to organisational, policy and cultural barriers.
• Structural constraints in governance, market liquidity and internal strategy have caused IPv4 to be treated as an operational input rather than a strategic financial asset.

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Introduction

Internet service providers (ISPs) form the backbone of global digital connectivity. They provide access to consumers, enterprises and cloud services across continents. At the heart of this technical ecosystem lies a numerical resource that has evolved far beyond its original engineering purpose: the IPv4 address. Designed to identify devices in the early internet architecture, IPv4 addresses have become scarce economic resources with measurable market value in the post-exhaustion era. Despite this transformation, most ISPs have not substantially monetised their IPv4 holdings, missing what could be significant revenue streams.

The reasons for this oversight are not merely economic but structural, organisational and policy-driven. ISPs continue to see IPv4 primarily as a network utility rather than a strategic asset. At the same time, governance frameworks, liquidity constraints, and internal business practices suppress the financial potential inherent in address space holdings. This article explores why IPv4 matters economically, how ISPs could benefit from monetising it, and why so many providers fail to do so.

Also Read: How ISPs can unlock hidden revenue streams through IP address monetization

The economic transformation of IPv4

The IPv4 protocol provides a 32-bit address space, capable of generating approximately 4.3 billion unique identifiers. Over time, these addresses were allocated to organisations worldwide, largely without anticipation of their long-term economic significance. By the early 2010s, the unallocated free pools managed by the Internet Assigned Numbers Authority (IANA) and regional internet registries (RIRs) were exhausted.

Scarcity fundamentally altered the economic dynamic around IPv4. Address blocks that once served purely as technical identifiers began to exhibit properties of scarce digital assets. Blocks began to trade on secondary markets, with per-address prices rising into tens of dollars in many regions. This commercialisation reflects basic supply-and-demand economics: a fixed supply facing ongoing demand from enterprises and networks that cannot yet rely entirely on IPv6.

These developments created an emerging class of digital capital. Some organisations have recognised this and adjusted their strategies accordingly. But for most ISPs, especially small and mid-sized providers, IPv4 remains in the technical domain rather than the financial domain.

Also Read: Why IP addresses are critical digital capital for modern businesses

IPv4 as digital capital: An expert perspective

Some analysts have explicitly framed IPv4 as capital rather than mere infrastructure. Lu Heng, CEO of LARUS Ltd and founder of the LARUS Foundation, has been one of the most vocal proponents of recognising IPv4’s economic value. His analysis emphasises structural conditions that have led to suppressed pricing and under-recognised value:

“Every ISP’s balance sheet is affected by IPv4 holdings. IPv4 addresses remain one of the most undervalued assets in the global digital economy. Their suppressed valuation is not accidental; it is structural.”

——Lu Heng, CEO at LARUS Ltd, founder of LARUS Foundation.

Heng’s framing is grounded in the observation that IPv4 pricing remains disconnected from the revenue that address space enables. In contrast to assets in mature markets — such as real estate or spectrum licences — where the asset captures a share of the value it enables, IPv4 addresses often generate far less relative revenue per unit than other service enablers.

This disconnect stems in part from governance and policy structures that treat addresses as administratively managed resources rather than tradable property. The absence of recognised ownership rights, combined with restrictions on transfers and perceived liquidity barriers, suppresses normal market price discovery and revenue generation.

Also Read: How RIR powerlessness impacts IPv4 scarcity and digital asset management

The market landscape for IPv4

Today’s IPv4 market is dynamic but constrained. Secondary markets exist where address space is bought, sold or leased. Market data indicates that leasing has become a dominant form of transaction in many regions, offering flexible address access without full ownership commitment.

Regional differences are pronounced. In some markets, especially within the Asia-Pacific region, strict policy frameworks limit direct monetisation, leading organisations to retain addresses as “in-use” rather than leasing them. In contrast, more liberal transfer policies in other regions have made IPv4 trading more liquid.

These geographic and policy disparities mean that even as IPv4 scarcity persists, the ability of ISPs to monetise address holdings varies. In markets where transfer and leasing is straightforward, latent revenue opportunities are more accessible. In more restrictive regimes, potential income may remain trapped under layers of administrative friction.

Also Read: Why RIRs lack enforcement power

Comparing monetisation models

One simple way to understand the revenue opportunity is to compare potential monetisation models for IPv4 address space. In principle, ISPs could approach address holdings as strategic assets, deploying leasing or transfer strategies to generate new streams of revenue. Yet most do not. The table below outlines the basic choices and their financial implications:

Monetisation model	Revenue pattern	Typical complexity	Example outcomes
Retain IPv4 for operations	Zero additional revenue	Low	Addresses support customer connectivity but generate no incremental income
Lease IPv4	Recurring revenue	Medium	Monthly recurring fees from lessees, requires contracts and compliance
Transfer/Sell IPv4	One-time capital	Medium	Lump-sum payments from buyers, reduces future flexibility

This comparison highlights why monetisation might appeal: leasing brings recurring revenue, while transfers provide immediate capital. However, actual implementation is often hampered by governance rules, lack of internal strategic prioritisation, and concerns about administrative complexity.

Also Read: Rethinking digital control: Why the idea of sovereignty in cyberspace is a fallacy

Barriers in ISP strategy and culture

The limited adoption of IPv4 monetisation among ISPs is not solely a technical issue but fundamentally organisational and strategic. Several factors converge to dampen monetisation efforts:

• Technical culture dominance: Network engineering teams typically manage IP allocations, and their priority is operational continuity, not revenue creation. This cultural framing can obscure the financial significance of address holdings.
• Lack of asset accounting: IPv4 address space often does not appear as a line item in corporate asset registers, leaving senior management unaware of its potential financial value.
• Perceived risk and complexity: Engaging in leasing or secondary markets introduces contractual obligations and reputational risks — for example, ensuring that lessees do not misuse addresses. These factors can deter risk-averse executives.

These factors can combine to create an environment where the asset value of IPv4 is overlooked, even when market conditions suggest clear revenue potential.

Expert insight: Leasing and policy friction

Policy frameworks can further complicate monetisation. Some RIR regions have restrictions on transferability or require justification of “need” for addresses, creating friction for ISPs seeking to lease or sell blocks. Paulius Judickas, Vice President of Strategic Alliances at a major IPv4 marketplace, has described how policy regimes influence pricing and monetisation behaviour:

“In some regions, registry policies effectively prohibit most organisations from monetising their resources. As a result, companies often announce IPs just to keep them marked as ‘in use’ rather than leasing them. This creates a situation where monetisation is suppressed by policy, not by lack of demand.”

——Paulius Judickas, VP Strategic Alliances at IPXO.

Judickas’s comment highlights that the regulatory environment around IP addresses can actively shape economic choices. Where transfer policies are restrictive, ISPs may choose operational allocation over leasing simply to maintain compliance or avoid administrative scrutiny.

Organisational neglect versus competitive opportunity

Smaller ISPs often feel the economic pinch of IPv4 scarcity more acutely than larger carriers. They may lack the capital to purchase address blocks on the secondary market, and they rely on techniques such as carrier-grade NAT to “stretch” limited resources. These strategies solve an operational need but do not generate revenue.

Larger providers, such as national carriers or cloud operators with extensive legacy IPv4 holdings, have more capacity to engage in monetisation — yet even among these organisations, address revenue seldom figures prominently in corporate financial disclosures. Unlike spectrum licences or real estate, IPv4 addresses are rarely treated as discrete line items with clear market value.

This neglect is partly cultural and partly governance-driven. Many ISPs see IPv4 as a technical enabler, not a strategic business unit. This mindset contrasts sharply with other industries where regulated scarce resources — such as broadcast spectrum — are aggressively monetised through auctions, leases and long-term contracts.

The role of IPv6 and transition costs

The existence of IPv6 — a protocol with a vastly larger address space — complicates the revenue narrative around IPv4. IPv6 was engineered to overcome the limitations of IPv4 address scarcity, and its adoption has steadily risen. However, dual-stack deployment, application dependencies, and customer compatibility concerns mean IPv4 will remain operationally relevant for years.

For many ISPs, the push to IPv6 has been slow. Transition costs, technical complexity and the lack of immediate customer demand have kept IPv4 entrenched. This persistence keeps demand for IPv4 address blocks alive, but it also reinforces the mindset of IPv4 as a service necessity rather than a financial asset.

Conclusion

IPv4 addresses have evolved from technical identifiers to scarce economic resources with clear market dynamics. Yet most ISPs overlook the revenue potential inherent in address holdings, treating them as operational necessities rather than strategic assets. Scarcity, governance structures, cultural factors within ISPs, and organisational risk aversion all contribute to this oversight.

Monetisation models such as leasing and transfers offer real revenue streams, and market data confirms sustained demand and significant economic value attached to IPv4. But without a shift in how ISPs perceive and manage IPv4 — structurally, strategically and institutionally — these opportunities will remain under-exploited.

Understanding IPv4 as digital capital rather than mere infrastructure could reframe how ISPs approach asset management, secondary markets, and long-term financial planning. That reframing may be one of the more consequential strategic shifts in the internet’s economic landscape over the coming decade.

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FAQs

1. What revenue opportunities exist for ISPs with IPv4 addresses?
ISPs can generate revenue through leasing unused IPv4 blocks to organisations needing address space or by selling blocks on secondary markets. Leasing produces a recurring income stream, while sales provide a one-time capital injection. Both options depend on market conditions and compliance with RIR transfer policies, which differ by region.

2. Why don’t most ISPs monetise IPv4 address holdings?
Several factors inhibit monetisation: cultural norms within ISP engineering teams that prioritise operational concerns over financial strategy; lack of internal accounting recognition for IPv4 as capital; perceived contractual and compliance complexities in leasing; and regional policy restrictions that make transfers administratively burdensome.

3. Are IPv4 addresses legally owned assets?
RIR governance frameworks generally treat IPv4 allocations as usage rights rather than legal property. This creates ownership ambiguity that can suppress market liquidity and complicate monetisation. Without formal property rights, buyers and sellers must rely on registry acknowledgements and contractual enforcement, limiting full capitalisation as financial assets.

4. How does IPv6 affect IPv4 monetisation?
IPv6 deployment reduces long-term IPv4 demand for certain services, but because many networks and applications remain dependent on IPv4, demand persists. Dual-stack strategies and transitional technologies mean IPv4 monetisation opportunities remain relevant even as IPv6 adoption grows.

5. Could changes in policy improve ISP revenue from IPv4?
Yes, more flexible transfer and leasing policies could improve address liquidity and pricing efficiency, enabling ISPs to monetise unused blocks more easily. Experts have argued that revisiting restrictive “needs tests” and recognising clearer asset rights could unlock latent economic value.