Exploding Net pricetag: $1.5 trillion

Nortel, one of the world's largest communications companies, said spending on Internet infrastructure will even outpace the investment in e-commerce in 2003.

The study, released Sunday at the annual meeting of the World Economic Forum in Davos, Switzerland, suggests the global Internet economy will reach $2.8 trillion by 2003.

The forecast suggests the Internet and e-commerce will represent the world's third-largest economy -- or 7 percent of global gross domestic product.

Electronic business is expected to mushroom by 86 percent annually to reach $1.3 trillion in 2003, with Europe projected to record annual growth of 118 percent, the study said.

"The explosion in demand for bandwidth and the growing reliance of business and industry on the Web requires building a new, high-performance Internet as a matter of urgency," said Ian Craig, vice president and chief marketing officer, in a statement.

"Nortel Networks has been doubling the bandwidth and halving the cost of fiber-optic networks every nine months," he added.