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Private Line and Wavelength Services, 2013-2017

Private Line and Wavelength Services, 2013-2017

Market Study
Published: March 2013
Pages: For full details, please email deborahf@cmsinfo.com
Research from: Insight Research
Sector: Networks & Infrastructure

From: GBP 2497.00
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Increasing demand for wireless backhaul and converged solutions using VoIP and MPLS are driving the demand for local private lines. The market for high speed point to point circuits is expected to remain moderately positive over the next few years, even as Ethernet takes an increasing share of the point-to-point market. This study will also provide an update on the status of new copper technologies and their deployment vis-à-vis the more traditional fiber private line solutions.

Does the demand for ever-increasing amounts of bandwidth translate into increasing revenue for private lines? Will the emergence of nationwide 4G wireless solutions alter the competitive landscape? This report explores the question of how and when the new 4G infrastructures will create a threat to traditional landline private lines.

A private line is a dedicated non-switched circuit or channel that is leased for a specified period. This channel provides a private and direct connection between at least two sites. Private Line & Wavelength Services, 2012-2017 details revenue and circuit counts by carrier type, and defines the split between wholesale and retail sales of T-carrier (T1, T3) and OC-N circuits (OC-3, OC-12, OC-48, OC 192, OC-768), gigabit Ethernet, and wavelength services. Insight’s annual study illustrates how carriers and their customers continue to move to higher capacity circuits in order to reap the benefits of lower cost-per-bit transport.

Market Segmentation

Private Line Revenue

     By Service Type
               Local
               Long Distance

     By Carrier Type
               IXC
               ILEC
               CLEC
               New Entrants (CATV & Fixed Wireless)

     By Wholesale vs. Retail
               Wholesale
                Retail

     Market Share
                Retail

     New Carrier Type
                Dominant
                Other Long Haul
                Regional
                New Entrant

Private Line Circuit Counts

      By Circuit Class
                DS-1, T-1
                DS-3, T-3
                OC-3
                OC-12
                OC-48
                OC-192

Wavelength Services Revenue

 

Report Excerpt

1.1    Private Line Services: Entering the Mature Phase

The private line market has had a great run, but our most recent analysis suggests that continued growth may finally be nearing its end. 

Year after year technical gurus predicted the death of this market.  New technologies had the potential to displace time division multiplexing (TDM) as the dominant protocol for data transport, the bedrock on which private lines had been built.  Indeed, IP/Ethernet (Internet protocol) services were introduced, adopted, and flourished.  Yet private lines continued to grow; sometimes at a rapid clip.  And though growth was disrupted by the telecom bust of the early 2000’s, private lines long term trajectory was ever upward.

New applications were developed for businesses and consumers that generated more data traffic.  New types of devices were invented to run these applications.  Each device needed a network connection.  The plethora of applications and devices created huge demands for bandwidth.  Some of this data was transported over IP networks, but much of it wound up on private lines.  This insatiable demand for data has kept the private line market growing since its inception.

It now appears, however, that the private line market is entering the mature phase.  Mature markets can be very profitable.  Mature markets can remain viable for years or even decades.  But mature markets do not exhibit growth. 

This transition has been in the making for years.  IP technology was introduced over twenty years ago and initially it drove the demand for private lines.  But now it has reached the point where it is starting to have a negative impact on private lines.  In addition, the nature of IT .............

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