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International
Frame Relay Robust Through 2004, Despite IP Network Competition
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BOONTON,
NJ. December 14, 1999:
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Spending on frame relay service, a digital switching technology used by corporations to link geographically dispersed business sites, will increase internationally by 22.8 percent in 2000, says a new report by
Insight Research. By 2004 a number of converging factors, including competition from IP networks, will cause revenue growth to slow, but double-digit expansion is still predicted.
According to Insight's report Provisioning of Private Line and Frame Relay Services: A Global Perspective, frame relay's improved standards, more reliable networking equipment, lower cost in comparison to private line, and the globalization of business networks will drive international service revenue to $1.14 billion next year, a 22.8 percent increase over 1999. By 2004, the completion of new fiber optic cables, an increase in overseas transmission capacity, and competition from IP networks will force international frame relay rates to decrease, slowing year-over-year returns to 11.3 percent. But while US-based frame relay customers migrate toward newer emerging technologies such as ATM, IP, and virtual private networks
(VPNs), Insight expects this traffic to terminate over frame relay in foreign countries.
"The proliferation of IP networks in the US is expected to undermine the overall growth of domestic frame relay, but international networks, for the most part, are slower to change and incorporate new technologies," says Robert Rosenberg, president of
Insight. "We don't expect international frame relay to be replaced by IP anytime soon, especially considering IP packets can be encapsulated for transport over frame relay," concludes Rosenberg.
Additional frame relay and private line forecasts are published in Provisioning of Private Line and Frame Relay Services: A Global Perspective, a 134-page market research study. This report provides five-year projections of market demand, includes a discussion of service provisioning and managed bandwidth services, and profiles five leading carriers.
An excerpt of this study and a table of contents is offered online at www.insight-corp.com/plframe.asp.
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Donna
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973-541-9600
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