Enterprises unplug leased line data services

Growth in spending on fixed business data services in Europe will slow dramatically from 2008, according to a new report from Analysys.

The study suggested that the subsequent pressure on service providers will force them to innovate or consolidate to stay in business.

"Competitive pressures on suppliers, and the emergence of Ethernet as an access technology for metropolitan and wide area networks, mean that companies continue to get more bandwidth for the same money at every upgrade," said Margaret Hopkins, the report's author.

"Service providers have to find new ways to generate revenue or else they must consolidate to survive."

Companies bewildered by the maze of data service offerings for metropolitan and wide area networks are turning to systems integrators for advice, according to the report, leading to a loss of managed services business for telecoms service providers.

Meanwhile small and medium-sized organisations are an untapped market for service providers because existing service offerings and distribution networks do not meet their needs, although there are signs that this is about to change.

While the press is full of talk about next-generation networks based on IP throughout, data customers need reassurance before moving critical applications and data to such networks.

Users are not yet convinced that next-generation networks will offer the security and reliability that they have long been able to expect from legacy data networks, says the report.