Business Services Industry

Broadband Fuelling Double-Digit Growth in Business Data Service Revenues, says Analysys

Business Wire, Feb 24, 2003

Business Editors/High-Tech Writers

CAMBRIDGE, England--(BUSINESS WIRE)--Feb. 24, 2003

Business data service revenues will continue to enjoy double-digit growth rates into 2003 thanks mainly to the demand for broadband access services, according to a new report published this week by Analysys, the global advisers on telecommunications, IT and media (www.analysys.com).

The new report, Business Data Services: growth opportunities and forecasts 2002-2007, forecasts that European business data service revenues will grow from EUR36 billion in 2002 to EUR52 billion in 2007.

"Demand for these services is driven by a need to provide enterprise-wide connectivity for Internet protocol-based applications, growing volumes of email, increasing number of remote workers, migration to integrated voice and data, and the adoption of video services," said Margaret Hopkins, author of the report. "What we will see in the next five years is a gradual decline in revenue growth rates, more carrier consolidation and a migration of data from leased lines, ATM (asynchronous transfer mode) and Frame Relay to IP-VPNs (virtual private networks), Ethernet and DSL (digital subscriber line)."

In the current economic climate, says Analysys, the overriding factor for IT and communications managers is to cut costs and to get as much bandwidth as possible within their budget. This, to a certain extent, is driving the gradual switch to lower cost technologies to support business data services.

"All countries examined for this report - France, Germany, Italy, Sweden and the UK - are showing a decline in leased lines and growth in DSL," added Hopkins. "However, there are historical differences between each country, particularly in the use of managed IP, Frame Relay and ATM services."

(Tables depicting revenue by technology/country for 2002-2007 are available to journalists on request).

The report concludes that in the long term Ethernet will come to dominate data services, though probably not during the next five years. Since Ethernet is ubiquitous in the local area network, it makes a lot of sense for companies to use the same technology across the wide area between their sites, reducing protocol conversions and thereby reducing latency and costs.

The report is available to purchase online at http://research.analysys.com/store.> An extended version of this news release is available on request.