IP revolutionising business data services

IP services are revolutionising the business market for telecoms operators, and will ensure steady growth for data service revenues over the next five years, research has predicted.

The latest report from Analysys forecasts that European business data services revenue will grow by around four per cent every year from €23bn in 2003 to €28bn in 2008.

According to the study, Business Data Services: Growth Opportunities and Forecasts 2003-2008, IP virtual private networks (VPNs) will be the fastest growing service in 2004.

IP VPNs will see a 40 per cent increase in revenue, while Ethernet is forecast to enjoy the highest growth during 2003 to 2008 at 42 per cent compound annual growth rate.

"Demand for data services continues to be driven by the need to have enterprise-wide connectivity for IP-based applications, bigger volumes of email and the integration of voice and data applications," said Margaret Hopkins, the author of the report, in a statement.

Hopkins added that over the next five years, users will migrate more quickly from leased lines, ATM and Frame Relay, to connectivity that is optimised to carry IP traffic. Examples of these are IP VPNs, Ethernet and DSL.

All European countries examined for the study, including the UK, are showing a decline in leased lines and growth in DSL.

Analysys said that, while the finance sector continues to be at the leading edge, other sectors are updating their communications infrastructure as the scope for new investment returns.

The analyst firm added that "nearly ubiquitous broadband" is making the SME market accessible for combined voice and data products and remote back-up offerings.

In addition, messaging is emerging as a "big driver" of migration to any-to-any IP architectures.

The Analysys report noted that DSL is accepted as a local access solution for corporate networks, and that it has proved more than adequate for connecting small sites and home workers.