Sales from virtual private networks (VPN) in the UK are set to increase by 500 per cent over the next 10 years.
That will mean good news for non-European telcos gearing up to offer such services in a deregulated European market in 1998.
According to Schema, which advises telecom carriers on market trends, revenues from VPN will be worth #600 million in 2000, compared to a current figure of #200 million. By 2006 this will increase to #1 billion.
Robin Bosworth, a partner at Schema, said many of the large telecoms operators and joint ventures such as Concert from BT and MCI, regard VPN as their flagship offerings which will they will heavily market next year.
VPNs have become attractive to businesses because of the 20 per cent cost savings over buying leased circuits. Also VPNs have allowed carriers to offer added functionality such as call centre facilities and outsourcing.
?Traditionally the take up of VPN services has been characteristic of deregulated markets in North America and the UK," said Bosworth.
He said that operators were able to offer high featured intelligent network-based services at significant cost savings.
"This has been driven on the supply side, by the need for carriers to protect existing accounts and attract new customers. Users in turn, see VPNs as a means of lowering their communications expenditure and reducing the cost and complexity of managing and administering their corporate networks,? said Bosworth.
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