IP to grow 60%

Internet Protocol (IP) traffic will grow 60% this year, down from the 200-300% of previous years, said Claudio Coltro, Director of Network Strategy for Alcatel at the WDM & Metro Optical Networking conference.

The challenge for European carriers is to keep pace with bandwidth demand while revenues in level off.

Citing IDC, a division of International Data Group, service revenues of carriers in Western Europe will only grow at a 3% compound annual rate until the end of 2003, from EUR128bn to EUR148bn in 2004. Data services, which are only about 10% of the market, would grow at a compound annual rate of about 5%.

Capital spending by carriers, once as high as 40% of revenues, will fall to 20% this year, "the only sustainable level," says Coltro.