Too much telecom capacity could mean lower prices

International telecoms consultant Renaissance Worldwide says that growth in transmission capacity in Europe is likely to outrun demand within five years. The result could be a rapid fall in prices for users.

Figures compiled by Renaissance show that capacity is growing by over 80% annually. One major factor is the development of new fibre optic systems being installed by BT, Cable and Wireless, MCI WorldCom and others. It is estimated that 50,000 miles of fibre cabling will have been laid within just a few years.

The result threatens to be a complete reversal of earlier concerns about inadequate capacity, with telecoms operators now looking for new applications to stave off price cuts.

This provides a partial explanation for operators' growing interest in cable television and internet opportunities.

Elliott Chase