LONDON -- The Western European fixed-line voice telephony market is going through a transition period. This is mainly due to continuing consolidation in the service provider community coupled with major restructuring within the indigenous European PTTs in turn caused primarily by high debt levels. The result is a market with considerably fewer players that are far more focused on core strengths. The effects of the adverse global economic conditions and international terrorism have led to a stabilization of telecom market revenues as minutes of traffic, particularly in the business sector, have been boosted while the rate of tariff reductions have slowed. "The traditional fixed-line telephony market in Western Europe is reaching saturation point," commented Nicky Walton, research analyst with IDC's European Telecommunications Services group. "Revenues in most markets are declining due to tariff reductions coupled with the migration of fixed-line traffic onto mobile networks and broadband services." Eric Owen, vice president in IDC's European Telecommunications Services group, also explains that "the overall number of PSTN connections will be flat over the forecast period and will only start to decline in 2006, as connections lost to mobile become offset by new connections caused by the boom in DSL services, which require PSTN/ISDN lines." In addition, the rate of growth in ISDN connections will decline over the forecast period as users in both business and residential environments move towards broadband services. In some markets the penetration of ISDN services has already reached a peak (Nordic markets) while in others (such as Germany) ISDN is core to the market and broadband solutions are being offered over ISDN which will preserve and grow the installed base. Table 1: Western European Market for PSTN and ISDN Services, 2001-2006

IDC