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DARK FIBRE MARKET GROWTH OF 15% FORECAST IN CENTRAL AND EASTERN EUROPE

London, October 12th 2005 - Dark Fibre growth of 15% per annum is forecast in central and eastern European markets over the next five years, according to a new report from BroadGroup. In the report, European Dark Fibre Markets, a detailed analysis of current and future deployment, pricing, products, and provider companies is provided, against the background of changing trends, technologies and emerging customer segments. Pricing and cost structure of Dark Fibre forms a special focus of the report, and the findings suggest that while price declines continue to be sustained, the true value of Dark Fibre as a strategic asset will become increasingly evident over the forecast period. The report found that while traditional telcos in western European markets have largely halted the sale of dark fibre, other 'markets' are thriving away from established centres and players. Significant variance occurs in Dark Fibre prices across the entire region, when measured on a per kilometre basis. The report suggests that Dark Fibre prices will continue to decline, primarily due to the current consolidation of fibre networks, but also the upgrading of new DWDM networks allowing capacity of up to 40Mbps per fibre pair to be made available. The forecast growth (by fibre km) over the period 2005-2010 for western Europe and Central and Eastern Europe (CEE), is approximately 60%. As a result, the share of Dark Fibre in the emerging markets as a proportion of the whole of Europe will grow from the current level of 27% (end 2005) to around 50% by 2010. New products and services built around Dark Fibre are emerging, as the IRU continues to decline in use. The report suggests for example that more complex bundled products for enterprise users are emerging. The report also comments on the need for a more efficient methodology to sell wholesale Dark Fibre, which it contrasts with the market structure for managed services. It also argues that there is a market for a connected network, based on Dark Fibre, which can deliver much higher capacity using virtual user paths at much lower cost. Where the Czech Republic now appears as a mature market for Dark Fibre, the report identifies new market growth in the CEE region, and identifies Russia as a potential opportunity given the imminent restructuring that is due to occur.

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