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Rboc Strategies: Local Communications Market Opportunities, Market Forecasts, and Market Strategies, 2002-2007

  • ID: 34168
  • Report
  • January 2003
  • Region: Global
  • 345 pages
  • Wintergreen Research, Inc
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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 as the networks become more efficient to run. Markets have stronger growth toward the end of the forecast period. Rboc markets at $170.1 billion in 2001 are expected to reach $238.1 billion by 2007.

Verizon was the largest company with 40% of the total market. SBC was the next largest company accounting for 32% of total dollars of revenue.

Market growth for local telephone services from the regional bell operating companies will be driven by participation in broadband value added services and wireless communication. Broadband communication is set to begin to replace analog wireline communication by 2007. The residential services markets are expected to become a smaller proportion of the telecommunications local services markets as DSL and cable modems replace existing landline services.

Rboc wireline services at $120.4 billion in 2001 are expected to reach $142.8 billion by 2007. Local Rboc business telecommunications services markets at $14.6 billion in 2001 are expected to reach $17.4 billion in 2007. Local residential telecommunications services at $26.6 billion in 2001 are expected to remain relatively stable, declining slightly to $24.7 billion by 2007.

By the first half of 2002, Rboc revenue had declined significantly. Half-year revenue was $74.7 billion versus $170 billion for the full year 2001. Verizon continued to be the largest Rboc in 2002 with 43% of total revenue generated in the first half 2002. SBC accounted for 26% of revenue and BellSouth for 19%. Qwest accounted for 12%. SBC lost market share in Rboc markets while the other three companies gained market share.

The key topics covered in this report include:

- Telecommunications Act Of 1996
- Rboc Support For Competition
- Constellation Of Next-Generation Elements
- Rboc Market Outlook
- Rboc Local Service Area Regional Analysis
- Competitive Forces That Impact Rboc Businesses

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

- BellSouth
- Qwest
- SBC Communications
- Verizon Communications

This report consists of over 345 pages and includes over 175 tables and figures.
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TABLE OF CONTENTS:

REGIONAL BELL OPERATING COMPANY EXECUTIVE SUMMARY

RBOC Market Outlook ES-1

RBOC Market Shares ES-2

RBOC Market Share Segment Analysis ES-6

RBOC Market Forecasts ES-9

1. OPERATING ENVIRONMENT AND TRENDS OF LOCAL TELECOMMUNICATION BUSINESS

1.1 U.S. Economic Trends 1-1

1.2 Communications Services Industry Overview 1-5

1.3 Business Opportunity 1-7

1.4 Competitive Market Aspects 1-7

1.5 RBOC Description 1-8

1.6 RBOC Market Description 1-9

1.7 Reportable Business Segments 1-11

1.8 Industry Change 1-12

1.9 Exchange Telecommunications Service 1-14

1.10 Change In Long Distance And Network Access Fees 1-14

1.11 Telecommunications Act Of 1996 1-15

1.11.1 Competitive Obligations 1-17

1.12 RBOC Support For Competition 1-17

1.13 Wireless Services 1-19

1.13.1 Wireless Technology 1-19

1.13.2 Digital Wireless Advantages 1-20

1.14 Cable Television 1-22

1.14.1 Cable Competition 1-22

1.15 Communications Switching Systems 1-23

1.15.1 Circuit-Switching Systems 1-24

1.15.2 Packet-Switching Systems 1-24

1.15.3 Softswitch Emergence 1-26

1.15.4 Constellation Of Next -Generation Elements 1-26

1.15.5 Need For Flexibility 1-27

1.15.6 Modular Designs Provide Flexibility 1-27

1.16 Network Convergence Of Voice And Data 1-28

1.17 Network Architecture 1-29

1.17.1 Softswitch Flexible Architecture 1-32

1.18 Web Hosting 1-34

1.19 Application Service Provider (ASP) 1-34

2. REGIONAL BELL OPERATING COMPANY MARKET ANALYSIS AND MARKET FORECASTS

2.1 RBOC Market Outlook 2-1

2.2 RBOC Market Shares 2-2

2.2.1 RBOC Wireline Market Shares 2-5

2.2.2 RBOC Data Market Shares 2-7

2.2.3 RBOC Wireless Market Shares 2-9

2.2.4 RBOC Directory Market Shares 2-12

2.2.5 RBOC International Market Shares 2-13

2.2.6 RBOC Market Share Segment Analysis 2-15

2.2.7 Wireline Market Shares by Segment 2-19

2.3 RBOC Growth Platform Expansion, Data and DSL 2-21

2.3.1 RBOC Leased Line Analysis 2-22

2.3.2 RBOC Wireless Analysis 2-23

2.4 RBOC Market Forecasts 2-27

2.4.1 RBOC Wireline Service Forecasts 2-28

2.4.2 Business Telecommunications Service Forecasts 2-32

2.4.3 Residential Telecommunications Service Forecasts 2-33

2.4.4 RBOC Pay Telephone Forecasts 2-34

2.4.5 RBOC Network Access Forecasts 2-35

2.4.6 RBOC Long Distance Forecasts 2-37

2.5 RBOC Data Services Forecasts 2-38

2.6 RBOC Directory Services Market Forecasts 2-40

2.6.1 Telephone Numbers for Data 2-41

2.7 RBOC Wireless Market Forecasts 2-43

2.7.1 Wireless Communications Market Trends 2-44

2.7.2 Convergence Means That Voice Becomes Data In The Network 2-44

2.7.3 Worldwide Wireless Communications Market Driving Forces 2-48

2.7.4 Wireless Telecommunications Market Forecasts 2-50

2.7.5 Wireless Infrastructure Buildout 2-50

2.8 RBOC International Markets 2-52

3. RBOC SERVICES POSITIONING

3.1 RBOC Residential Services 3-1

3.1.1 Verizon Telecom Services 3-1

3.1.2 BellSouth Residential Services 3-2

3.1.3 SBC Wireline 3-6

3.1.4 SBC Local Exchange Services 3-6

3.1.5 Qwest Local Voice Services 3-7

3.1.6 Qwest Retail Services 3-9

3.1.7 Qwest Custom Calling Features 3-9

3.2 RBOC Network Access Services 3-9

3.2.1 Verizon Network Access Services 3-10

3.3 RBOC Business Services 3-10

3.3.1 Customer Premises Equipment (CPE) 3-10

3.3.2 Qwest CPE (Customer Premise Equipment) 3-11

3.4 RBOC Data 3-11

3.4.1 Asynchronous Transfer Mode (ATM) 3-11

3.4.2 Frame Relay 3-11

3.4.3 Private Lines 3-12

3.4.4 BellSouth Data 3-12

3.4.5 BellSouth Business Services 3-13

3.4.6 BellSouth ATM 3-15

3.4.7 Verizon Data 3-18

3.4.8 Qwest Access And Transport Solutions 3-18

3.4.9 Qwest VPN Service 3-20

3.4.10 Qwest ATM (Asynchronous Transfer Mode) 3-21

3.4.11 Qwest Frame Relay 3-22

3.4.12 Qwest Port 3-22

3.4.13 Qwest Advantage 3-22

3.4.14 Qwest Control 3-22

3.4.15 Qwest Local Broadband 3-23

3.4.16 Qwest Managed Exchange Services 3-23

3.5 RBOC DSL 3-23

3.5.1 DSL Internet Home Networking Services 3-24

3.5.2 Verizon DSL 3-24

3.5.3 BellSouth DSL 3-25

3.5.4 SBC DSL Project Pronto 3-25

3.5.5 SBC / Ameritech DSL Home Networking 3-26

3.6 RBOC Long Distance Services 3-27

3.6.1 Verizon Long Distance Services 3-27

3.6.2 Qwest Long Distance Services 3-29

3.7 RBOC Core Network 3-29

3.7.1 BellSouth Core Digital Network Capital Expenditures 3-30

3.7.2 Verizon 3-31

3.8 RBOC Wholesale Services 3-31

3.8.1 SBC Wholesale Services 3-31

3.8.2 BellSouth Interconnection Wholesale Services 3-32

3.8.3 BellSouth Point-To-Point Network 3-37

3.8.4 Qwest Wholesale Access & Transport Solutions 3-39

3.8.5 International Private Line Services 3-40

3.8.6 Qwest Domestic Wavelength Services 3-40

3.8.7 Qwest Sea-Cable Backhaul 3-40

3.8.8 Qwest Interconnection 3-40

3.8.9 Qwest Collocation 3-41

3.8.10 Qwest Subscription Services 3-41

3.8.11 Qwest Express Voice Origination And Termination Services 3-41

3.9 RBOC Information Services 3-41

3.9.1 BellSouth Information Services 3-42

3.9.2 SBC Directory 3-43

3.9.3 Verizon Directory 3-43

3.9.4 Qwest QSerach Electronic Directory Assistance 3-44

3.9.5 Qwest Calling Card Service & Fulfillment 3-44

3.10 Centrex Services 3-44

3.10.1 Qwest Advanced Data And IP Products 3-45

3.10.2 Qwest Wholesale Services 3-45

3.10.3 Qwest Data Products 3-45

3.11 IP / Internet 3-46

3.11.1 SBC Yahoo! Agreement 3-47

3.11.2 SBC Data Services 3-47

3.11.3 Qwest Web Hosting Centers 3-48

3.11.4 Qwest Dedicated Internet Access (DIA) 3-49

3.11.5 Qwest Cyber Solutions Application Service Provider 3-49

3.11.6 Qwest Dedicated Internet Access 3-50

3.11.7 Qwest Advanced Data And IP Products 3-51

3.12 Advertising And Publishing 3-51

3.12.1 Media Yellow Page Directories 3-52

3.12.2 RBOC Internet Directory Advertising 3-52

3.12.3 BellSouth Advertising 3-53

3.12.4 BellSouth Domestic Advertising And Publishing 3-53

3.12.5 SBC Directory 3-54

3.13 RBOC Wireless 3-54

3.13.1 Verizon Domestic Wireless 3-54

3.13.2 Verizon Global Wireless 3-55

3.13.3 BellSouth Wireless Services 3-56

3.13.4 Wireless Auction 3-57

3.13.5 SBC / BellSouth Wireless - Cingular Wireless 3-57

3.13.6 SBC Wireless 3-58

3.13.7 Qwest Wireless Services And Products 3-59

3.13.8 Qwest All-Digital Wireless Voice And Wireless Data Service 3-60

3.13.9 Qwest Wireless Data 3-61

3.13.10 Qwest Wireless Positioning 3-61

3.14 RBOC International Presence 3-63

3.14.1 SBC International 3-63

3.14.2 Verizon International 3-66

3.14.3 BellSouth International 3-67

3.15 RBOC Other 3-68

3.15.1 Verizon Other 3-68

3.15.2 SBC Other 3-68

3.16 RBOC Research And Development 3-68

3.16.1 National Telecommunications Alliance 3-69

3.16.2 Bellsouth Emergency Systems 3-69

4. RBOC STRATEGIC POSITIONING

4.1 BellSouth Business Strategy 4-1

4.1.1 Broadband / IP Platforms 4-3

4.1.2 BellSouth Brand Strategies 4-3

4.1.3 BellSouth Fiber-To-The-Curb (FTTC) Systems 4-6

4.1.4 Bellsouth International Strategy 4-7

4.1.5 BellSouth International Digital Wireless Strategy 4-8

4.1.6 Strategic Partnering And Acquisitions 4-9

4.1.7 Bellsouth IBM E-Business Alliance Strategy 4-9

4.1.8 Bellsouth / IBM E-Business Initiative Focused At Web-Enabling Small And Mid -Sized Businesses 4-10

4.1.9 BellSouth Enterprise Strategy 4-12

4.1.10 BellSouth / Qwest 4-14

4.2 SBC Strategy 4-15

4.2.1 SBC Market Strategy 4-17

4.2.2 SBC National Expansion 4-18

4.3 Verizon Corporate Strategy 4-19

4.3.1 Verizon Corporate Wireless Strategy 4-21

4.3.2 Open To New Ideas 4-22

4.3.3 Diversity 4-23

4.4 Qwest Strategic Positioning 4-23

4.4.1 Qwest / Microsoft Web Sites 4-24

4.4.2 Qwest Strategy 4-25

4.4.3 KPNQwest 4-27

4.4.4 Qwest Custom Choice Packages Leverage The Growth Of The Internet 4-27

4.5 Cingular 4-31

4.5.1 Cingular Business Strategy 4-31

4.5.2 Cingular Latin America Business Strategy 4-34

4.6 RBOC Strategic Alliances 4-35

4.6.1 New Model Of Flexible Partnering 4-36

4.6.2 Go To Market Alliances 4-39

4.7 RBOC Local Service Area Regional Analysis 4-41

4.7.1 BellSouth 4-41

4.7.2 SBC Regions 4-41

4.7.3 Verizon 4-42

4.7.4 Qwest Wireline Territory 4-42

4.8 RBOC Target Markets 4-42

4.8.1 Consumer Groups 4-43

4.9 RBOC Organizations 4-44

4.9.1 BellSouth Organization 4-45

4.9.2 SBC Organization 4-48

4.9.3 Verizon Organization 4-53

4.9.4 Verizon Enterprise Business Unit 4-56

4.9.5 Qwest Organization 4-62

4.10 Competitive And Regulatory Environment 4-62

4.10.1 Wireless Auction 4-63

4.10.2 California Marketing Proceeding 4-64

4.10.3 Out-of-Region Competition 4-64

4.10.4 Qwest 4-64

4.10.5 Qwest Justice Department And SEC Investigations 4-65

4.11 Federal Regulatory Authority 4-66

4.11.1 Access Charges and Universal Service 4-66

4.11.2 Access Pricing 4-66

4.11.3 Advanced Telecommunications Services 4-67

4.11.4 Interlata Long-Distance Entry 4-67

4.11.5 Reciprocal Compensation For ISPs 4-68

4.11.6 Price Regulation 4-68

4.11.7 Access Charge Reform 4-69

4.11.8 Local Service 4-69

4.11.9 Federal Policies 4-70

4.11.10 FCC Powers 4-70

4.11.11 Incentive Regulation 4-70

4.11.12 Universal Service 4-71

4.11.13 Access Charge Reform 4-73

4.11.14 FCC All Elements Rule 4-73

4.11.15 Long Distance Market Entry Based On Local Services Competition 4-74

4.11.16 Price Regulation 4-75

4.12 Competitive Forces That Impact RBOC Businesses 4-75

5. REGIONAL BELL OPERATING COMPANY (RBOC) PROFILES

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 5Qwest 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 5-36

5.4.12 SBC / Sterling Commerce 5-39

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 5-50

5.4.20 Strengths And Weaknesses Of SBC 5-50

5.5 Verizon Communications 5-53

5.5.1 Verizon Operating Revenues 5-54

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 5-60

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

6. REGIONAL BELL OPERATING COMPANY ACCESS LINE ANALYSIS

6.1 RBOC Access Line Outlook 6-1

6.2 RBOC Switched Residential Line Analysis 6-5

6.3 RBOC Switched Business Line Analysis 6-7

6.4 RBOC Switched Pay Telephone Line Analysis 6-8

6.5 RBOC Residential Access Line Trends 6-9

6.6 RBOC Business Access Line Trends 6-10

6.7 RBOC Pay Telephone Access Line Trends 6-11

6.8 RBOC Switched Access Line Trends 6-12

6.9 RBOC Voice Grade Equivalent Access Line Trends 6-13

6.10 RBOC Total Access Line Trends 6-14

6.11 RBOC Voice Grade Equivalent Access Lines 2000 6-15

6.12 BellSouth Access Lines 6-16

6.12.1 BellSouth Residential Access Lines By State 6-17

6.13 Qwest Access Lines By State 6-20

6.14 SBC Access Lines By State 6-22

6.15 Verizon Access Lines By State 6-26
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