Regional Bell Operating Companies (Rboc) Data Communications Strategies and Opportunities, Market Forecasts 2002-2007

The Rbocs are positioning to achieve a market presence in broadband services.Companies are expected to have lower total revenue in the near term, but become increasingly profitable.

Rboc data markets totaled $25.2 billion in 2001.Leased lines and frame relay accounted for the largest proportion of data services revenue.For the first half of 2002 Rboc data markets totaled $13.1 billion.
Leased lines are expected to account for an increasingly large proportion of Rboc data communications revenue in the near term.

Rboc markets are $170.1 billion in 2001 are expected to reach $238.1 billion by 2007.Market growth will be driven by participation in wireless communication.

This report covers the following key topics:

- Rboc Participation In Industry Change,
- Competitive Market Aspects,
- Rapid Development Of Data Services,
- Rboc Data Market Outlook
- Carriers Adapt System Architecture For Voice And Data,
- Rboc Wireline Service Forecasts,
- Rboc Growth Platform Expansion, Data and DSL

Following is a list of the companies profiled in this report:

- BellSouth
- Qwest
- SBC Communications
- Verizon Communications

This report consists of over 250 pages and includes over 85 tables and figures.

TABLE OF CONTENTS:

REGIONAL BELL OPERATING COMPANY DATA SERVICES EXECUTIVE SUMMARY ES-1

RBOC Data Market Outlook ES-1

RBOC Growth Platform Expansion, Data and DSL ES-3

1. RBOC DATA SERVICES MARKET DESCRIPTION 1-1

1.1 Industry Overview 1-1

1.2 Communications Services Industry 1-4

1.3 Business Opportunity 1-5

1.4 Competitive Market Aspects 1-6

1.5 RBOC Description 1-7

1.6 Value Added Services Market Opportunities 1-11

1.6.1 Rapid Development Of Data Services 1-11

1.7 E-Business 1-12

1.7.1 B to B 1-13

1.7.2 Global Exchange Services 1-16

1.8 Value Added Services Opportunities 1-16

1.9 Carriers Adapt System Architecture For Voice And Data 1-18

1.10 RBOC Participation In Industry Change 1-21

1.10.1 RBOC Data Business Strategy 1-22

1.10.2 Enterprise Networking Services 1-25

1.11 Content Hosting 1-27

1.12 Web Hosting 1-28

1.13 Application Service Provider (ASP) 1-28

1.14 Web Services 1-29

1.14.1 High Availability and Security Services 1-30

1.14.2 Data And Internet Services 1-31

1.14.3 Packet Services 1-32

1.14.4 Business Internet Services 1-32

1.15 Wholesale Transport 1-33

1.16 Telecommunications Act 1-35

1.17 U.S. Economic Trends 1-35

1.17.1 Domestic Economic Trends 1-37

2. REGIONAL BELL OPERATING COMPANY DATA SERVICES MARKET ANALYSIS AND MARKET FORECASTS 2-1

2.1 RBOC Data Market Outlook 2-1

2.2 RBOC Market Shares 2-3

2.2.1 Wireline Market Shares by Segment 2-6

2.2.2 RBOC Data Market Shares 2-8

2.2.3 RBOC Market Share Segment Analysis 2-9

2.3 RBOC Growth Platform Expansion, Data and DSL 2-13

2.3.1 RBOC Leased Line Analysis 2-18

2.3.2 RBOC ATM / IP Analysis 2-20

2.3.3 RBOC Frame Relay Analysis 2-23

2.3.4 RBOC DSL Analysis 2-26

2.4 RBOC Market Forecasts 2-32

2.4.1 RBOC Wireline Service Forecasts 2-34

2.5 RBOC Data Services Forecasts 2-35

2.5.1 Telephone Numbers for Data 2-36

2.5.2 RBOC Data Services Forecasts 2-40

2.5.3 RBOC Leased Line Services 2-42

2.5.4 RBOC ATM Services 2-44

2.5.5 RBOC Frame Relay Services 2-46

2.5.6 RBOC DSL Services 2-48

3. RBOC DATA COMPANY POSITIONING 3-1

3.1 Verizon 3-1

3.1.1 Verizon General Business Unit 3-2

3.1.2 Verizon Enterprise Business 3-4

3.1.3 Verizon Enterprise Business 3-5

3.1.4 Verizon Extending Network to Deliver Advanced Services to Large Business, Government Customers 3-8

3.1.5 Verizon 3G Wireless 3-10

3.1.6 Verizon Enterprise Advance 3-10

3.1.7 Verizon National Reach 3-12

3.1.8 Verizon DSL High-Value Service Bundle 3-12

3.1.9 Verizon High-Speed Internet Service To Multifamily Properties 3-13

3.1.10 Verizon High-Speed Internet Access DSL Package of Services 3-15

3.1.11 Verizon DSL Consumer Choice of Pricing Plans 3-15

3.1.12 Verizon Online DSL for Business Customers 3-17

3.1.13 Verizon Digital Music Service 3-17

3.1.14 Music Library 3-18

3.1.15 Verizon Online Business DSL Wireless Router Offer 3-18

3.1.16 Verizon DSL Wireless Security 3-19

3.1.17 Verizon Advanced Data Services Centers 3-20

3.2 BellSouth 3-21

3.2.1 BellSouth Sample Data Applications 3-21

3.2.2 BellSouth ATM Benefits 3-23

3.2.3 BellSouth Large Business Services Targeted To Large And Complex Business Customers 3-24

3.2.4 BellSouth Focus On Data Portfolio 3-25

3.2.5 BellSouth Net-Based IP VPN Data 3-26

3.2.6 Data Solutions For Business Based On Customer Needs 3-27

3.2.7 BellSouth IP, Security and Hosting Solutions 3-28

3.2.8 BellSouth Basic Dedicated Web Hosting 3-29

3.2.9 BellSouth Server Clustering 3-30

3.2.10 BellSouth Global Load Balancing 3-30

3.2.11 BellSouth Managed Services for VoIP 3-30

3.2.12 BellSouth Small Office Managed Firewall 3-31

3.2.13 BellSouth Managed Site VPN 3-31

3.2.14 BellSouth Data Positioning 3-32

3.2.15 BellSouth Exchange Access Asynchronous Transfer Mode (XAATM) 3-34

3.2.16 BellSouth ATM Virtual Connections 3-35

3.2.17 BellSouth Exchange Access Connectionless Data Service (XACDS) 3-38

3.3 SBC 3-40

3.3.1 SBC Data Services 3-40

3.3.2 SBC e-Business and Data Strategy Overview 3-41

3.3.3 SBC / Sterling Commerce Customer Service 3-42

3.3.4 Sterling Commerce Partnerships 3-42

3.3.5 Sterling Commerce Selected by Wal-Mart As Integration Specialist 3-43

3.3.6 Sterling Commerce Direct Software 3-44

3.3.7 SBC Project Pronto Broadband Applications 3-45

3.4 Qwest 3-48

3.4.1 Qwest Hosting Solutions 3-49

3.4.2 Qwest Web Sites 3-49

4. RBOC DATA MARKET STRATEGIES AND TECHNOLOGIES 4-1

4.1 RBOC Data Strategies 4-1

4.2 RBOC Data Target Markets 4-2

4.3 RBOC Data Target Services 4-3

4.3.1 Interconnection Services 4-12

4.4 Carrier Data Services 4-14

4.5 Network Access Services 4-16

4.6 Customer Premises Equipment (CPE) 4-16

4.7 Cable Television 4-17

4.7.1 Cable Modems 4-18

4.8 Frame Relay 4-19

4.9 Unbundled Network Elements 4-19

4.10 Digital Subscriber Lines (DSLs) 4-20

4.10.1 DSL Technical Issues 4-20

4.11 ADSL / SDSL 4-21

4.12 Web Hosting 4-26

4.12.1 Web Hosting Competitive Factors 4-29

4.13 ATM Applications 4-36

4.14 Switching Systems 4-39

4.14.1 Packet-Switching Systems 4-40

4.15 Softswitch Emergence 4-41

4.15.1 Constellation Of Next -Generation Elements 4-42

4.15.2 Need For Flexibility 4-42

4.15.3 Modular Designs Provide Flexibility 4-43

4.15.4 Network Convergence of Voice and Data 4-44

4.15.5 Network Architecture 4-44

4.15.6 Softswitch Flexible Architecture 4-48

4.16 Blade Computers 4-50

5. 5. REGIONAL BELL OPERATING COMPANY (RBOC) PROFILES 5-1

5.1 Regional Bell Operating Companies (RBOCs) 5-1

5.1.1 Bankruptcies 5-1

5.2 BellSouth 5-2

5.2.1 BellSouth Operating Segments 5-3

5.2.2 BellSouth Revenues 5-3

5.2.3 BellSouth Second Quarter 2002 5-4

5.2.4 Domestic Wireless / Cingular 5-5

5.2.5 Central and South American / Latin America Group 5-6

5.2.6 Advertising and Publishing Group 5-6

5.2.7 Workforce Reduction 5-6

5.2.8 Long Distance Launch 5-7

5.2.9 Growth Sectors Of BellSouth Businesses 5-7

5.2.10 Strengths And Weaknesses Of BellSouth 5-9

5.3 Qwest 5-11

5.3.1 Qwest Strategic Positioning 5-12

5.3.2 U. S. Attorney Office In Denver and SEC Criminal Investigation Of Qwest 5-12

5.3.3 Qwest Partners 5-13

5.3.4 Qwest Strategic Alliance With Microsoft 5-14

5.3.5 Qwest Strategic Alliance with Cisco 5-15

5.3.6 Qwest Strategic Alliance with IBM 5-16

5.3.7 Qwest Network Resource Optimization 5-16

5.3.8 Qwest High-Capacity Fiber Optic Network 5-17

5.3.9 Strengths And Weaknesses Of Qwest 5-19

5.3.10 Qwest Total Communications Revenue 5-21

5.4 SBC Communications 5-24

5.4.1 SBC Wireline 5-25

5.4.2 SBC Packaging Innovations 5-26

5.4.3 SBC Product-Based Revenue Categories 5-27

5.4.4 SBC New Markets 5-28

5.4.5 SBC End-To-End Service 5-29

5.4.6 Directory And Electronic Advertising Services 5-29

5.4.7 SBC Internet-Based Directory Services 5-30

5.4.8 SBC Cingular Wireless Strategy 5-30

5.4.9 Cingular Wireless New York Launch 5-32

5.4.10 SBC Data Strategy 5-33

5.4.11 SBC Yahoo DSL Strategy 5-35

5.4.12 SBC / Sterling Commerce 5-38

5.4.13 SBC Sells Its Interest in Bell Canada 5-41

5.4.14 SBC Supports Reform of Universal Service 5-41

5.4.15 SBC National-Local Trends 5-42

5.4.16 SBC Communciations Revenue 5-43

5.4.17 Wireline Segment Results 5-45

5.4.18 SBC Directory Revenue Results 5-49

5.4.19 SBC International Revenue Results 5-49

5.4.20 Strengths And Weaknesses Of SBC 5-50

5.5 Verizon Communications 5-52

5.5.1 Verizon Operating Revenues 5-53

5.5.2 Verizon Domestic Telecom 5-56

5.5.3 Verizon Local Services 5-57

5.5.4 Verizon Network Access Services 5-58

5.5.5 Verizon Long Distance Services 5-59

5.5.6 Verizon Other Services 5-59

5.5.7 Cost Reductions 5-60

5.5.8 Verizon Domestic Wireless 5-61

5.5.9 Verizon International 5-63

5.5.10 Verizon Information Services 5-64

5.5.11 Strengths And Weaknesses Of Verizon 5-66