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* European business data service revenue to grow from EUR36bn in 2002 to
EUR52bn in 2007

* Data migrating from leased lines, ATM and Frame Relay to IP VPNs, Ethernet
and DSL - though variations exist between France, Germany, Italy, Sweden and UK

* Ethernet will be data services king in the long term due to price,
simplicity and reliability


CAMBRIDGE, UK, February 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 ( http://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. (Chart available to
journalists on request).


"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."


By 2007, according to Analysys forecasts, DSL will contribute 20% of data
revenues in all countries except France; ATM will still form around 20% of
the market in France and Germany; and Ethernet will make up 20% of the
Swedish market - growing from EUR50 million in 2002 to EUR245 million in
2007. (Tables depicting revenue by technology for France, Germany, Italy,
Sweden and the UK 2002-2007 are available to journalists on request).


The Analysys 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.


"Concern as to whether Ethernet's reliability can be extended to carrier
grade networks are being addressed in a number of ways," added Hopkins "For
example, Neos is using MPLS (multi-protocol label switching) to set up
fall-back label switched paths, and Fibernet is using RPR (resilient packet
ring) to match the performance of SDH (synchronous digital hierarchy) rings."


Written by Margaret Hopkins, the report assesses what sustained revenue
growth might be expected, examining the different experiences of different
industry sectors (notably the financial and public sectors) and country
markets for both corporate and SME users. It also includes value forecasts
for various data services, including Frame Relay, ATM, leased lines,
Ethernet, IP-VPNs, X.25, SMDS (switched multi-megabit data service), cable
modems and DSL.


The report is available to purchase online at
http://research.analysys.com/store Prices start from EUR1445. For more
information, telephone Analysys on +44 (0)1223 460600 or email
research@analysys.com.


About business data services

Business data services are provided by network operators to deliver wide
area connectivity to business sites, enabling customers to connect their
organisations' data networks to their geographically dispersed sites, the
Internet and their customers and suppliers. For the purposes of this report,
this definition includes layer 2 and layer 3 services, managed and
unmanaged, as well as Internet access and leased lines, but does not include
narrowband dial services.

About Analysys ( http://www.analysys.com )

Analysys, the global advisers in telecoms, IT and new media, works at the
forefront of the communications revolution, delivering advice and insight to
established and new entrant players. From offices in Cambridge, London,
Glasgow, Madrid, Milan, Paris, San Francisco and Washington DC, Analysys
staff provide strategy and systems consultancy, information services and
start-up support to the companies that are creating the networked economy.
Analysys Research reports and market intelligence services provide
authoritative coverage of this convergent industry, based on an unrivalled
ability to fuse real-world experience, rigorous research and forward-looking
analysis.

Recent reports include:

* Business Data Services: growth opportunities and forecasts 2002-2007
(February 2003)

* Competition in Corporate Networking: the challenge from systems
integrators and strategies for operators (January 2003)

* The Future for Fixed-Mobile Substitution: options for fixed and mobile
operators (December 2002)

* Competing in the European Directory Services Market: opportunities in a
liberalising market (December 2002)

* Mobile Content and Entertainment: forecasting the market for games and
other wireless content (November 2002)

* Strategies for Mobile Device Evolution: meeting and creating market demand
(October 2002)

* Western European Mobile Forecasts and Analysis 2002-2007 (September 2002)

* Cable TV Market Scenarios to 2007: prospects for cable TV operators in
Germany, the Netherlands and the UK (September 2002)

* IP Voice Services: the return on investment for European service providers
(September 2002)

* The Future for Telecoms Incumbents: the impact of competition, regulation
and customer demand (July 2002)

* Charging and Revenue Sharing for Mobile Content and Entertainment (July 2002)

* Enabling Prepaid Mobile Content and Data Services: strategies for
operators and vendors (June 2002)

* IP Voice Services: European corporate market forecasts 2002-2007 (May 2002)

* Scenarios for the European Telecoms Market 2002-2007: forecasts and
analysis (May 2002)

* Benchmarks and Key Performance Indicators: lessons from the European
telecoms market (April 2002)

* The Reality of GPRS in Europe: subscribers and revenue (April 2002)

* Session Initiation Protocol: SIP-related European revenue forecasts
2002-2007 (February 2002)

* Public Wireless LAN Access: US Market Forecasts 2002-2007 (January 2002)


Media contacts (for author photography, executive summaries and interviews)

Louise Nunn

Analysys

Tel: +44 (0)1223 460600

Email: louise.nunn@analysys.com


Martin Brooke

Martin Brooke Associates

Tel: +44 (0)1223 264050

Email: martin.brooke@dial.pipex.com


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