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Telecom
Construction and Professional Services
2001-2006
a market research report
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The US telecommunications
industry is experiencing one of the worst slumps in its history. Order
terminations, buildout cancellations, bankruptcies, collapsing stock
prices, deteriorating margins, and questionable business practices
have left the euphoria felt by the industry little more than a year
ago in tatters. Major companies now expect the current industry
malaise to persist throughout the remainder of 2002.
How did this happen? What
further ripple effects could occur throughout the industry? Most
importantly, what can firms do to navigate safely through these rough
waters? Telecom Constructions and Professional Services 2001-2006
examines these issues and others from the perspective of the telecom
construction and professional services firms-one of several functional
common core component sectors that collectively underpin the entire
telecommunications industry.
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Report Excerpt
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Telecom Construction Industry Overview
Insight's forecasts for
telecommunications construction include revenues from construction
expenditures by network operators and related providers. Forecasts for
construction-related professional services include a broad spectrum of
engineering and planning actions, such as:
- Outside plant maintenance,
- Outsourcing, and
- Systems management.
The present demand for telecom-related
construction will remain relatively steady through 2006. This condition
reflects a slow rebound from the softness that began in late 2000. The
real growth in this sector will come from value-added professional
services, which will represent an increasing proportion of
construction-related revenues over the 2001-2006 forecast period.
Construction firms that differentiate themselves by offering a suite of
professional services will be rewarded with increased market share and
solid revenue streams from embedded relationships with network
operators.
Telecommunications construction and
professional services by far account for a vast majority of the $26.2
billion overall functional common core components industry (including
wire and cable, integrated electronics enclosure packaging,
construction, and power plants and systems) in 2002. For a more in-depth
look at the other functional common core component segments, consult
Insight's reports entitled Telecom Power
Plants and Power Systems 2001-2006, Integrated
Electronic Enclosure Packaging: Frames, Cabinets, and Racks for Telecom
Equipment 2001-2006, and Wire and Cable:
Harnesses, Fiber, Copper Wire, and Coax 2001-2006.
Key Success Factors for Telecom
Construction Firms
The key trends that telecom construction
firms need to address are:
- Meeting demands for new construction
and operator buildouts
- Following key industry standards,
paying attention to the requirements of the installed base
- Addressing a key shift in the supply
chain infrastructure, whereby many large equipment vendors are
outsourcing their manufacturing operations
- Providing a suite of value-added
professional services
The introduction of new operators and
services often requires the new construction of telecom buildings, the
refurbishment of non-CO facilities, and substantial re-configuration of
existing COs. These facilities are required to house digital switches,
transmission systems (copper, fiber-optic, and coax), DSL equipment,
Internet protocol (IP) equipment, Web servers, and cable headends. New
construction, while tempered by the slowdown, still exerts a positive
effect on demand in the telecom construction and professional services
sector. The investments required for constructing and maintaining the
existing plant and infrastructure, as well as superimposing new
technologies, amount to billions every year.
Successful firms will pay close attention
to industry standards and how to integrate new technologies within the
network. Standards have played a key role in increasing the use and
acceptance of telecom infrastructure and core components. Network
operators often struggle to implement numerous new infrastructure
products with less-than-stable specifications and standards. Vendors
also need to understand the true nature of the installed base of
equipment.
Professional services revenues in the US
will make up a much larger proportion of the overall telecommunications
construction sector in 2006 than it did in 2001. Network operators and
equipment suppliers are shedding high fixed-cost operations and turning
to outsourcers to provide assistance on an as-needed basis. Once the
decision is made to outsource the first service, the decision-making
process to outsource additional logistical and operational projects
becomes less problematic. Suppliers who can work with their clients at a
different level will embed themselves into the client's operational and
business processes, and will provide higher-value support as a result of
this learning experience.
In short, only by learning the lessons of
effective supply chain management will the operators and their suppliers
be able to navigate safely through the current rough waters that have
already swamped so many in the industry.
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Market Segmentation
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US Telecom Construction and
Professional Services Revenue
Telecom Construction
Professional Services
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Table of Contents
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Chapter I
EXECUTIVE SUMMARY
1.1 The Crash of 2000-2001
1.2 Telecom Construction Industry Overview
1.3 Key Success Factors for Telecom Construction Firms
Chapter II
MARKET OVERVIEW
2.1 Definitions and Background
2.1.1 AT&T Establishes Design and Engineering Standards
2.1.2 Western Electric and Bellcore
2.1.3 AT&T's Bell System Specifications
2.1.3.1 New Equipment Building Systems Standards
2.1.3.2 Bellcore Updates NEBS
2.1.4 Role of Functional Common Core Components
2.2 Telecommunications Construction Overview
2.2.1 Central Office Facilities
2.2.2 Central Office Hardware Configurations
2.2.3 Other Network Nodal Points
2.2.4 Co-Location
2.2.5 Cable TV Network Modernization
Chapter III
INDUSTRY TRENDS AND CHARACTERISTICS
3.1 Historical Evolution of the Market
3.1.1 The Monopoly Environment
3.1.2 The Emergence of Local Competition
3.1.3 Navigating Current Market Uncertainty
3.2 Factors Influencing New Product Acceptance
3.2.1 Technological Rate of Change
3.2.2 Standardization Process
3.2.3 Economic Reasons for Deploying New Technologies
3.3 Co-Location Trends
3.3.1 Mandated Co-Location Requirements
3.4 Challenges Posed by Industry Slowdown
3.4.1 Impacts on Telecommunications Construction Firms
3.5 Shifts in Marketing Focus
3.5.1 Historical Marketing Focus
3.5.2 Transformations in Marketing Strategy
3.5.3 The Typical Purchasing Process
3.5.4 New Marketing Avenues and Promotional Events
3.6 Supply Chain Structure
3.6.1 Supply Chain Components
3.6.2 Traditional vs. Improved Supply Chain Interactions
3.6.3 Web-Based Transactions
3.7 Support Services for Procurement
3.7.1 Program Management
3.7.2 Key Account Support Programs
Chapter IV
VENDORS
4.1 Introduction
4.2 Telecommunications Construction Firms
Chapter V
FUTURE TRENDS AND OPPORTUNITIES
5.1 Key Challenges
5.2 Meeting Support Requests of Providers
5.2.1 Scarcity of Qualified Personnel
5.2.2 Functional Support Services
5.3 The Move Towards Outsourcing
5.3.1 Manufacturing Outsourcing
5.3.2 Logistics Outsourcing
5.4 Telecommunications Construction Trends
5.5 Service Provider-Specific Opportunities
5.5.1 CO Growth-on-Demand
5.5.2 Greenfield Locations
5.5.3 Co-Location
5.5.4 Carrier Hotels
Chapter VI
INDUSTRY FORECAST
6.1 Introduction
6.2 Methodology
6.3 US Economic Outlook
6.4 Forecasts
Appendix
GLOSSARY
Table
of Figures
Chapter I
I-1 US Telecom Construction and Professional Services Revenue by
Type, 2001 vs. 2006
Chapter II
II-1 The Role of Functional Common Core Components within a Central
Office
Chapter III
III-1 Proposed Multi-Tenant Building Specification: Conceptual
Layout
III-2 Supply Chain Management Framework
III-3 A Typical Program Management Model
Chapter VI
VI-1 Telecom Components Revenue, Construction vs. Other Segments,
2001-2006 ($Millions)
VI-2 US Telecom Construction and Professional Services Revenue,
2001-2006 ($Millions)
VI-3 US Telecom Construction and Professional Services Revenue by Type,
2001 vs. 2006
Table
of Tables
Chapter I
I-1 Key Elements for Success of Telecom Construction Firms
Chapter II
II-1 Updates to Original NEBS Specifications
II-2 Types of Professional Services Offered to Service Providers
II-3 Number of Mobile, Cable TV, IXC POP, and Non-CO Switch Sites,
2001
Chapter III
III-1 Critical Issues for the Telecommunications Construction
Industry
III-2 Representative North American Telecommunications Standards
Organizations
III-3 Proposed Specifications for Multi-Tenant Building Telecom
Equipment Rooms
III-4 CLEC Co-Location Demands
III-5 Advanced Services Order Co-Location Requirements
III-6 Key Near-Term Challenges Facing Network Operators
III-7 Purchasing Criteria of Typical Customer Types
III-8 Key Criteria Considered by Service Providers When Selecting a
Vendor
Chapter V
V-1 Functional Support Services Offered to Network Operators
V-2 Potential Benefits and Problems of Outsourcing Manufacturing and
Logistics
V-3 Outsourcing Vendor Capabilities Checklist
Chapter VI
VI-1 US Telecom Construction and Professional Services Revenue,
2001-2006 ($Millions)
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Pricing Information
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Hard Copy Price
$ 600
Electronic Copy Price
(PDF
License Descriptions)
$ 870 Single-User Printable PDF
$ 1200 6-Seat Printable PDF
$ 1500 Unlimited Corporate-Wide Distribution
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Market
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