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Private
Line Under Pressure from IP Broadband
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BOONTON, NJ. August 20, 1998:
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Telcos have enjoyed a steady growth in demand for private line services, but a new market research report from
Insight Research warns that new, competitive IP-based broadband services from emerging carriers like Qwest and Level 3 may force traditional carriers to reduce prices of private line T-1 and T-3 services. Moreover, local broadband services--ISDN,
xDSL, and cable modems--will compete with private line T-1 services in the emerging local broadband access market, putting even more downward pressure on prices.
According to Insight's report Private Line Services 1998-2003, the price stability associated with the
telcos' private line market is being threatened by the emergence of IP-based networks for long distance services, and xDSL and cable modems for local services. Yet the lower prices will actually spur demand for T-1, T-3 and DS-0 lines, keeping US private revenue growing at a respectable 8.8 percent annually through 2002. Long-term,
Insight expects to see a marketing and/or technology fight between circuit-based private lines and fast-packet or IP-based services. Depending on pricing, service flexibility, availability, and all other factors being equal, either one could end up dominating the private line marketplace.
"Private line was put on the critical list in the mid-1980s when virtual private networking gave corporations an alternative to nailed-up circuits to tie their locations together," explains Robert Rosenberg, president of
Insight. "Commercialization of the Internet in the mid-1990s breathed new life into the private line market as companies rushed to create Intranets, but the emerging technology alternatives to PL means we've got to put the patient on the touch-and-go list again," Rosenberg adds.
Further forecasts of DS-0, T-1, and T-3 private line service revenue in the long distance, local, and competitive access markets are published in Private Line Services 1998-2003, a 54-page market research study. The study is a follow-up to
Insight's 1996 Private Line Services report.
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Private
Line
Services
2003-2008
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Private
Line Services 2002-2007
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Provisioning
of Private Line and Frame Relay Services: A Global Perspective 1999-2004
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Grid
Computing
2003-2008
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Telecom
Services
in
Vertical
Markets
2002-2007
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Insight
Research,
founded
in
1990,
is
a
highly
respected
source
for
telecommunications
market
research
and
strategic
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Donna
Savino
at Insight Research
973-541-9600
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Telecom
Market
Research,
