LONDON -- The wholesale telecom market is now growing faster than the retail telecom market in Europe, according to Ovum, the leading analyst and consulting company.

Based on the latest revenue figures available for 22 leading European telecom companies, Ovum found that wholesale revenues had grown by 12% in contrast to 8% for retail revenues over the 2003-2004 period, reaching a total of over $47bn.

"This trend demonstrates the growing importance of wholesale as a customer segment but also shows how increasingly competitive the retail market has become," says David James, Senior Analyst with Ovum's wholesale team.

The research found that the top-five wholesalers account for nearly 60% of wholesale revenues and that domestic wholesale revenues still dominate and grow faster than international revenues: they reached $32.2bn in 2004, up 13.6% from 2003. In the same period, European international wholesale revenues grew by 9.5% in the year to nearly $15.2bn.

"This is the result of carriers' response to regulatory action," says James. "They reacted by rolling out regulated wholesale access products, and by introducing additional unregulated value-added wholesale services."

The healthy growth of the international wholesale market reflects the increasing globalisation of industry and commerce and the need of end-customers to connect with more offices, customers and partners oversees. Few service providers can meet all of their customers' requirements and most need to use international wholesale services bought from other carriers.

Ovum Ltd.