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U.S. WHOLESALE NETWORK SERVICES DRIVEN BY IP WHOLESALE WILL EXCEED $116 BILLION ANNUALLY BY 2003 December 14, 1999 - Wholesale PARSIPPANY, NJ, (December 14, 1999) -- A recent report from PBI Media-InfoTech projects the U.S. wholesale network services market will grow at an average annual growth rate of 24 percent to reach $116 billion in revenue by 2003 up from $39 billion in 1998. The surge, according to the Parsippany, NJ-based research and consulting firm, will be driven primarily by Internet Protocol (IP) related wholesale volume. Three key sectors account for increases in IP related wholesale volumes, according to the study. The rapid growth of wireless wholesale services, driven by Internet access, will jump from $500 million in 1998 to $5,500 million in 2003, expanding by a factor of eleven. The second biggest IP Wholesale growth rate will be among new entrants to the industry, known as competitive local exchange carriers (CLECs). These firms posted total wholesale revenues of $250 million in 1998 but in five years, CLEC revenues are anticipated to multiply ten-fold, to $2.62 billion in 2003. The third biggest IP Wholesale rate of growth originates from Packet/Cell-based network service provider services (NSPs), which includes the delivery of IP Telephony. NSP revenues will jump from $2,000 million in 1998, to $20,449 million in 2003. The growth in the U.S. Wholesale market is being generated by three key drivers, according to Richard Kent, Vice President, Global Professional Services at PBI Media- InfoTech, "The initial driver is the impact of ongoing deregulation of the telecom environment and the growth in competition that it has generated. The passage of the Telecommunications Act of 1996 and its implementation has moved much of the focus of wholesale from long distance to local access including not only wireline but wireless and cable access markets. The robust competitive environment has generated a major wave of new telecom competitors who are well financed by Wall Street," said Kent. "The second driver has been the rapid acceleration of telecom technologies particularly fiber optic transmission and switching capabilities that are resulting in the doubling of bandwidth capabilities every nine months. This surge in capacity has led to a significant fall in bandwidth costs and traditional telecom services. The third driver has been the impact of the Internet on the demand for bandwidth and the transformation of bandwidth usage from circuit-switched voice to IP packet networks. PBI Media-InfoTech has identified five emerging business models that are empowering new players who are both creating and taking advantage of the transformation of bandwidth usage. These include the following models and leading companies who have adopted these models: Network service providers (NSPs) furnish network services and applications hosting centers. Examples of prominent NSPs include AT&T (NYSE:T), MCI/WorldCom (NASDAQ: WCOM), QUEST (NASDAQ:QWST), Williams Communication (NYSE:WCG) and Level 3 (NASDAQ: LVLT) Content delivery providers (CDPs) deliver broadband Internet content in innovative approaches that overcome some of the throughput capabilities of the current Internet. Some of the leading CDPs include Adero, Akamai Tech Inc (Nasdaq:AKAM), iBEAM, Intervu (Nasdaq:ITVU) and Sandpiper. Applications service providers (ASPs) offer applications over the network to businesses and end-users as networking costs have plummeted and trained acquiring and retaining IT staff has become more difficult. Example of ASPs include Digex (Nasdaq:DIGX), Oracle Corp (NasdaqNM:ORCL) and SAP Aktiengesell (NYSE:SAP) Headquarters Providers (HQPs) consist of large enterprise businesses that have adopted wholesale like characteristics to serve their internal constituents as well as their external suppliers and customers. Broadband content providers (BCPs) create and deliver broadband content including event broadcasting and depend upon the network service providers and the content delivery providers to insure effective delivery of their content. Examples of BCPs include Excite@Home, (Nasdaq: ATHM) MSNBC, Broadcast.com, (Nasdaq: YHOO) and Intertainer.com. These new business models are helping to accelerate an already explosive growth in wholesale telecom services. PBI Media-InfoTech is a worldwide consulting firm specializing in strategic solutions for corporate clients in the telecommunications and information technologies industries. The firm is part of PBI Media, a division of Phillips International Inc. of Potomac, MD, which has 1,250 employees and total revenues of $350 million. For more information on the report, Click Here! Contact our sales department at infotech@accessintel.com or by phone at 973.884.0100 |
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