IDC Forecasts Western Europe IP Telephony Services Revenue Will Surpass $2.5 Billion in 2004

FRAMINGHAM, MA — NOVEMBER 1, 2000 — The explosion of new telecommunications and Internet technologies has transformed the European communications landscape and prepared it for dramatic growth in IP and data traffic. According to IDC, IP telephony minutes of use (MOU) in Western Europe will increase at a compound annual growth rate (CAGR) of 192%, from 91.5 million in 1999 to 47 billion in 2004. Revenue during this same period will jump 139%, from $11 million to $2.5 billion.


"The growth of IP telephony is based on two main drivers," said Eric Owen, research manager for IDC's European Telecommunications Services program. "In the first half of the forecast period, cost savings on national and international calls will be the principal accelerator. In the second half, value-added services such as conferencing and unified messaging will take over."

According to IDC, overall IP telephony revenue accounted for only 0.01% of the total Western European call revenue in 1999. By 2004, its share will increase to 3.5%. Revenue from international IP telephony calls will reach 10% of the total by 2004.

IDC says the United Kingdom will lead all European countries in IP telephony revenue, growing from $24 million in 2000 to $650 million in 2004. Germany will experience the greatest growth, increasing at a CAGR of 188%, from nearly $6 million in 2000 to $407 million in 2004.

"To participate in the growth of data communications, users need IP-based services," Owen said. "With people shopping online and conducting business on the Web, businesses recognize the necessity of corporate Web sites, Web hosting services, Internet access, email, and support services to facilitate the resulting commercial exchanges."

Information like the above can be found in IDC's report IP Telephony Services in Europe, Forecast and Analysis, 2000?2004 (IDC #BHT03G). This report focuses on the market for IP telephony services in each of 16 Western European countries. Forecasts are provided for minutes of IP telephony usage and the resulting telephony-based revenue. The report also analyzes the key market issues and profiles of the principal IP telephony service providers active in Europe. This report is available to purchase from your local IDC office.

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies and the financial community. Additional information can be found at

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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