Growth in TV and video services delivered over broadband connections will not be enough to halt the swift decline in the value of Western European fixed telecoms services in the coming years, according to Analysys, which makes the conclusions in its new report, Western European Fixed Telecoms: Market Sizings and Forecasts 2001-11. According to the telecoms, IT and media consultancy firm, “The forecasts indicate that end-user spend on fixed telecoms services is set to decline to under three-quarters of one per cent of GDP by 2011, half of its value in 2001. The report shows that the rate of decline in fixed service spend will vary by country, but also that in several, spend will fall by over 20 per cent over the next six years.”

"TV and video services over broadband represent the greatest hope for maintaining spend levels, but in most European countries fixed operators would have to grow impossibly high ARPU (Average Revenue Per User) on TV and video in order to compensate for the scale of losses in voice and Internet," declares Rupert Wood, main author of the report.

The report predicts that spend on voice will fall to represent just over half of fixed service spending by 2011. Broadband take-up continues to exceed operator expectations, according to Analysys. The company expects average household penetration to reach 60 per cent by 2011 - but a combination of price erosion and saturation will halt real growth in basic access before the end of the decade, leaving operators looking for new ways to generate revenues from fixed networks. Single-service players are being squeezed by crossownership, multi-play companies.