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Telecommunications Industry
Economic Conditions
Three
quarters of a trillion dollars flowed into the telecom industry during
the tech bubble of the late 1990s, but after three brutal years watching
company fortunes being driven downward—with the attendant layoffs,
bankruptcies, and even a few accounting scandals—in 2003 the global
telecommunications industry is expected to begin its long, slow climb
out of the cellar.
Insight’s
market analysis of service and equipment trends worldwide suggests that
the telecommunications industry is exhibiting all the attributes of an
industry still in a growth phase, not an industry in decline.
During such a growth cycle, it is not uncommon for an industry to
overbuild. Building too
much plant, however, creates excess capacity in the short term, which
drives down prices. Prices
will stabilize when demand catches up with supply, or when marginal
firms run out of cash and exit the market.
A
confluence of factors, including lower barriers to market entry fostered
by privatization and the unprecedented growth of the public Internet,
created opportunities that had not existed previously.
A rush of new investment flooded the industry in the course of
just a few years. These
investments, especially those by the new long-haul fiber optic network
carriers, led to an excessive amount of available network capacity.
The need to generate a return on this investment by selling the
capacity to a limited set of buyers led to price wars.
Profits fell quite suddenly, catching many players by surprise
and provoking a severe reaction by the investment community.
The
speed at which these changes swept over the telecommunications landscape
has been unprecedented. Many
new players took on a high amount of debt in order to be able to quickly
build out their networks. When
prices fell dramatically, they ran out of cash more quickly than
expected. Selling off
assets is usually a way to raise cash, but this option evaporated
because there was a glut of both equipment and available fiber optic
network capacity.
During
the 1990s, the US communications industry was a major exporter of goods
and outperformed the overall market, but in the years ahead
...
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Executive Summary.
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Operations
Support Systems
- Worldwide
OSS Sales Revenue, by Region, 2002-2007
- North
America
- Europe/Middle
East
- Asia/Pacific
- Latin
America/Caribbean
- Worldwide
OSS Sales Revenue Wireline vs. Wireless, 2002- 2007
- Worldwide
OSS Sales Revenue by Service Type, 2002-2007
- Worldwide
OSS Sales Distribution by Region, 2002-2007
Wireless
- US
Wireless Revenue Growth Rates, 2000-2001
- US
Wireless Subscriber Forecast, 2002-2007
- US
Wireless Services Revenue, 2002-2007
- Worldwide
Subscribers to Wireless Services, 2002-2007
High-Speed
Access
- North
American Broadband Connections by Access and Customer
Type, 2001-2007
- Traditional
- DSL
- Cable
Modem
- FBW
- Total
World Broadband Connections by Service Type, 2001-2007
- Traditional
- DSL
- Cable
Modem
- FBW
- Broadband
Switch Revenue, 2001-2006
- DSL Penetration, 2002
- Worldwide
Internet Traffic Growth, 2000-2006 (G/bps)
- Host
and Domain Name Growth, 2000-2006
- Comparison
of Voice and Data Traffic Growth, 1998-2003
- Internet
Revenue Quarterly Growth Rates, 2000-2001
- Internet
Service Provider Revenue, 2002-2007
- Online
PCs, 2000-2006
- NA
vs. ROW
- Residential
vs. SME
- Worldwide
Internet Traffic Growth, 2000-2006
- US
Peak Time Data Traffic Demand, 2000-2006 (G/bps)
- Residential
vs. Enterprise
- US
Switch Throughput Demand for Data Traffic, 2000-2006
(T/bps)
Telecom
Equipment & Plant
- US
Softswitch Revenues and Growth, 2000-2007
- Worldwide
Gateway Revenue Forecast, 2003-2008
- US
Functional Common Core Component Revenues, 2001-2006
Voice
Services
- Global
Carrier Revenue, 2002-2007
- North
America
- Asia/Pacific
- Europe/Middle
East/Asia
- Latin
America/Caribbean
- Long
Distance Carrier Revenue Growth, 1999 and 2000
- Total
Private Line Revenue, 2000-2008
- Local
and Long Distance Wireline Market Growth, 2000-2006
- Long
Distance Minutes of Use Quarterly Growth Rates, 2000-2001
- US
Long Distance Minutes, 2002-2007
Business
and Consumer Marketing
- US
Businesses with a Web Site, 2001-2006
- US
Businesses with a Wireless Web Site, 2001-2006
- Top
Tier Expenditures for Business Telecom Services as
Percentage of Total Market, 2002 and 2007
Historical
Data
- US
Traffic vs. World Traffic, 1995-1999
- Reduction
in the Global Accounting Rate, 1995-2000
- Average
Rate
- Annual
Reduction
- Cumulative
Reduction
- US
International Voice Services Billed and Net Settlement,
1995-2000
- Wireless
Penetration as a Percentage of Households in Selected
Countries, 1995-2003
- Average
Monthly Local Bill in the United States, 1993-2001
- Host
and Domain Name Growth, 2000-2006
- Comparison
of Voice and Data Traffic Growth, 1998-2003
- US
Access Line Annual Additions, 1985-1999
- LEC
Access Line Quarterly Additions, 1999-2001
- LEC
Access Line Annual Reductions, 2002-2007
- Total
US Employment, 1986-2006
- Total
US Business Establishments, 1992-2005
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Chapter
I
EXECUTIVE SUMMARY
1.1 Communications Market Overview
1.2 Report Structure
1.3 Telecommunications Market Outlook
1.3.1 Telecommunications Services
1.3.2 Broadband Access
1.3.3 Increased Network Capacity
1.3.4 Network Infrastructure and Support
1.3.5 Components
Chapter II
BACKGROUND:
Telecommunications Privatization, Deregulation, and the US Economy
2.1 Overview of the Communications Sector with Respect
to the Current US Economy
2.2 History of the Telecommunications Industry
2.2.1 AT&T: The Early Years
2.2.2 The Telecommunications Act of 1996
2.2.2.1 Local Deregulation
2.2.2.2 Long Distance Competition
2.2.2.3 The Effects of Local and Long Distance Competition
2.2.3 International
2.2.3.1 The Old Regulatory Environment
2.2.3.2 Traffic Imbalances and Accounting Rate Reduction
2.2.4 Wireless
2.2.5 Cable Television
2.2.5.1 History of Cable TV
2.2.5.2 New Cable TV Market Imperatives
2.3 Telecommunications Market Outlook
2.3.1 Internet Growth
2.3.2 The Move to IP, Broadband Connections, and New Services
Chapter III
TRANSFORMATION OF THE COMMUNICATIONS NETWORK:
The Ongoing Migration from Electronic Circuit Switching to Photonic
Packet Switching
3.1 Overview of Network Topology
3.1.1 End-Users
3.1.2 Access Networks
3.1.3 Metro Networks
3.1.4 Core Networks
3.2 Overview of Switching Technologies
3.2.1 Circuit Switching vs. Packet Switching
3.2.2 Circuit Switches vs. Packet Switches vs. Cross- Connects
3.2.3 Digital Cross-Connect Products Outlook
3.3 Transmission Improvements: Private Line and SONET
3.4 Data Networks
3.5 Voice Over Packet (Voice over IP)
3.6 Circuit/Packet Network Interconnection and Gateways
3.7 Will the Network Go All-Optical?
3.7.1 Fiber Deployment
3.7.1.1 By Region
Chapter
IV
THE ADVENT OF HIGH-SPEED ACCESS:
DSL, HFC, Fiber, and Wireless Broadband Connections
4.1 Broadband Access Networks
4.1.1 DSL
4.1.2 HFC
4.1.3 Fiber
4.1.4 Fixed Broadband Wireless
4.1.5 Mobile Broadband Wireless
4.1.5.1 Generations of Services
4.1.5.2 Public vs. Private Wireless Data Network Subscribers
4.1.6 Satellite
4.1.6.1 VSAT
4.1.6.2 DBS
4.1.6.3 LEO/MEO
4.1.6.4 GEO
4.2 Premises Networks
4.2.1 Business Cabling Systems
4.2.2 Residential Cabling Systems
4.2.3 Specialized Fiber Cabling Applications
4.2.4 Premises Wiring Market
Chapter
V
SUPPORTING THE INFRASTRUCTURE:
Network and Customer Support
5.1 Operations Support Systems Overview
5.2 Operations Support Applications
5.2.1 Business Operations Support
5.2.1.1 Customer Care
5.2.1.2 Service Orders
5.2.1.3 Billing Mediation
5.2.1.4 Rating
5.2.1.5 Billing
5.2.2 Network Operations Support
5.2.2.1 Engineering and Planning
5.2.2.2 Provisioning
5.2.2.3 Trouble/Repair
5.2.2.4 Network Management
5.2.3 OSS Market Structure: Demand Side View
5.2.3.1 By OSS Type
5.2.3.2 By Region
5.3 Outsourcing
5.3.1 Billing & Customer Care Service Bureaus
5.3.2 Outsourcing Market Forecast
5.4 Customer Network Management
Chapter
VI
REDEFINING THE SERVICES LANDSCAPE:
Targeted Residential and Business Marketing
6.1 Voice Services
6.1.1 Local/Long Distance
6.1.2 Voice over Packet
6.1.3 Enhanced Voice Services
6.1.4 Directory Services
6.1.4.1 History of Directory Assistance
6.1.4.2 Enhanced Directory Services
6.1.5 Mobile
6.2 Data Services
6.2.1 Consumer Internet Access/E-mail
6.2.2 Business Internet Access/VPN
6.2.2.1 Cost Savings and the Internet
6.2.2.2 Outsourcing
6.2.3 Wireline Data Services Outlook
6.2.4 Unified Messaging
6.2.5 E-Commerce
6.2.6 Mobile Data Services
6.3 Video Services
6.3.1 Upgrades to Digital and High-Definition TV
6.3.2 Streaming Video
6.3.3 Videoconferencing
6.4 Marketing Innovations
6.4.1 Consumer Marketing
6.4.1.1 Rural vs. Urban
6.4.1.2 By Ethnic Group
6.4.2 Business Marketing
6.4.2.1 Telemedicine
6.4.2.2 Small Business
Appendix
GLOSSARY
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Table of
Figures
Chapter I
I-1 North American Broadband Subscribers, 2000-2006 (Thousands)
I-2 Worldwide Internet Traffic Growth, 2000-2006 (Gigabits per Second)
I-3 Worldwide OSS Sales Revenue, 2000 and 2005 ($Millions)
Chapter II
II-1 Types of Regulatory Subsidies
II-2 US Traffic Compared With Total World Traffic, 1995-1999 (Minutes,
Millions)
II-3 Wireless Penetration as a Percentage of Households in Selected
Countries, 1995-2003
II-4 US Wireless Subscriber Forecast by Network Technology, 1998-2003
(Millions)
II-5 Worldwide Subscribers to Wireless Services, 2000-2005
(Millions)
II-6 Average Monthly Wireless Bill in the United States, 1993-1999
II-7 Worldwide Internet Traffic Growth, 2000-2005 (Gigabits per
Second)
II-8 Host and Domain Name Growth, 2000-2006 (Millions)
II-9 Comparison of Voice and Data Traffic Growth, 1998-2003 (Gbit/s)
II-10 Comparison of Voice and Data Revenue, 1999
Chapter III
III-1 Public Communication Network Architecture
III-2 Digital Cross-Connect Locations in the Telecom Network
III-3 Digital Cross-Connect Forecast Summary, 2000-2005 ($Millions)
III-4 SONET Ring Configuration
III-5 US Gateway Revenue Forecast, 2000-2004 ($Millions)
III-6 Switched Optical/Electrical Networks vs. All-Optical IP Meshed
Networks
III-7 Fiber Deployment by Region, 2000 vs. 2006
Chapter IV
IV-1 HFC Architecture Providing Video and Voice Services
IV-2 Types of PONs
IV-3 Basic APON Architecture for FTTH, FTTB, FTTC, and FTTCab
Structure
IV-4 Satellite Connections to Terrestrial Networks
IV-5 US Total Premises Cable Market Revenue Forecasts: Residential and
Business, 2000-2004 ($Millions)
Chapter V
V-1 Operations Support System Dataflow
V-2 Business Operations Systems Dataflow
V-3 Network Management Systems
V-4 Worldwide OSS Sales Revenue, 2000-2005 ($Millions)
V-5 Worldwide Distribution of OSS Sales Revenue, By Region, 2000 vs.
2005
V-6 Billing Processes That Can Be Outsourced
V-7 US Telecommunications Outsourcing Revenue Forecast, 1999 and 2005
($Millions)
V-8 How CNM Systems and Content Fit within the TMN Layer
V-9 Total US CNM Services Addressable Market, 2000-2005 ($Millions)
Chapter VI
VI-1 Long Distance Carrier Revenue Growth, 1999 and 2000 ($Billions)
VI-2 US Local and Long Distance Wireline Market, 2000-2006
($Billions)
VI-3 Annual Cost to Support 1,000 Users Using Remote Access and VPN,
1998 ($Thousands)
VI-4 Worldwide E-commerce Revenue, Business vs. Consumer, 2000-2006
($Billions)
VI-5 E-Commerce from the Buyer's Point of View
VI-6 E-Commerce from the Supplier's Point of View
VI-7 Time Line of the Development of Digital Compression, 1950-2000
VI-8 Respondents Who Switched Long Distance Providers, Metro vs.
Non-Metro Respondents,1999-2000
VI-9 Metro and Non-Metro Use of Telephone Features Available from
Carrier, 2000
VI-10 Increase in Buying Power of African-Americans, Hispanics, and
Asians in the US, 1990-2001 ($Billions)
VI-11 Percent of US Households Using the Internet at Home, by
Race/Ethnicity and Income, 2000
VI-12 Internet Access Revenue from US Households, by Race/Ethnicity,
2000-2005 ($Billions)
VI-13 Business vs. Residential Wireline Expenditures for Telecom
Services, 2000 and 2006 ($Billions)
VI-14 Industry Expenditures for Telecom Services, Percentage of
Total Market, 2000 and 2006
VI-15 Total Expenditures for Telecom Products, Enhanced Services and
Internet Access for US Small Business, 2000-2005 ($Billions)
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Table
of Tables
Chapter I
I-1 US Telecommunications Services and Equipment Revenue,
1994-1999 ($Millions)
I-2 Telecom Services Considered In This Report
I-3 Demand Drivers for Broadband Services and Infrastructure
I-4 Download Time Comparison by Type of Internet Access
Chapter II
II-1 US Telecommunications Services and Equipment Revenue, 1994-1999
($Millions)
II-2 ILEC Regulatory Checklist
II-3 Reduction in Global Accounting Rate, 1995-2000
II-4 US International Voice Services Billed and Net Settlement,
1995-1999 ($Millions)
II-5 Total Subscribers of the Top Ten US Multiple System Operators,
2000
II-6 Demand Drivers for Broadband Services and Infrastructure
II-7 Online PCs, North America and Rest of World, Home vs. SME,
2000-2006 (Millions)
Chapter III
III-1 Total Number of US End-Users: Residences, Businesses, and Mobile
Users, 2000
III-2 Characteristics of Switched Telecom Networks
III-3 Definitions of Digital Private Line Services
III-4 SONET Data Rates
III-5 Protocol Gateway Operational Environments
III-6 Fiber Deployment by Region, 2000-2006 (Gigameters)
Chapter IV
IV-1 Broadband Communication Network Access Solutions
IV-2 Download Time Comparison by Type of Internet Access
IV-3 North American Broadband Subscribers by Access and Customer Type,
2000-2006 (Thousands)
IV-4 The Flavors and Features of xDSL
IV-5 PON Technical Features
IV-6 FBW Unlicensed, Licensed Microwave, and Licensed Millimeter
Spectrum
IV-7 Worldwide Mobile Wireless Standards: 1G, 2G, 2.5G, and 3G
IV-8 Total US Public and Private Wireless Data Subscribers, 2000-2006
(Thousands)
IV-9 Major LEO/MEO Systems: Costs, Launch Vehicles, and Services Start
Dates
IV-10 US-Based GEO Providers: Backers, Satellites, and Services Start
Dates
IV-11 US Total Premises Cable Market Revenue Forecasts: Residential
and Business, 2000-2004 ($Millions)
Chapter V
V-1 OSS Definitions Summary
V-2 Worldwide OSS Sales Revenue by Region, 2000-2005 ($Millions)
Chapter VI
VI-1 US Local and Long Distance Wireline Telecom Market, 2000-2006
($Billions)
VI-2 Worldwide VoP Revenues, Wireline vs. Wireless Service Providers,
1999-2004 ($Millions)
VI-3 Enhanced Services for US Small Businesses, by Type of Service, 2000-2005
($Millions)
VI-4 VPN Design, Installation, and Maintenance, 2000
VI-5 In-House Versus Outsourced VPN Costs, 1998
VI-6 Annual Cost to Support 1,000 Users, 1998 ($Thousands)
VI-7 US Data Service Revenues by Service Type, 2000-2005 ($Millions)
VI-8 Distribution of Data Services Revenue by Service, 2000 versus
2005
VI-9 Distribution of Data Services Revenue by Service Provider
Segment, 2000 versus 2005
VI-10 Telephone Features Currently Used in the Home, Metro vs.
Non-Metro, 2000
VI-11 Telephone Features Users Plan To Buy, Metro vs. Non-Metro, 2000
VI-12 Internet Access Revenue from US Households, by Race/Ethnicity,
2000-2005 ($Billions)
VI-13 Carrier Revenues from Telemedicine and Health Data
Networks, 2000-2005 ($Millions)
VI-14 Total Expenditures for Telecom Products, Enhanced
Services, and Internet Access by US Small Businesses, 2000-2005 ($Billions)
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Telecom
Market
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