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Forecasts of Access Line Competition in the Local Exchange
Technology Futures, Inc, Dec 2003, Pages: 184
Competition is having a major impact on incumbent local exchange carriers (ILECs). For example, after years of high growth, the number of ILEC retail narrowband switched access lines peaked at 181.3 million lines in 1999 and has continuously declined since then, falling to 162.7 million lines by December 2002. This report documents the latest forecasts of the future of competition in the local exchange and its impact on the ILECs.
Key Findings from This Latest Report
- Wireless, cable telephony, and broadband substitution is forecast to cause total ILEC narrowband switched access lines (including UNE and resale) to fall from 181 million at year-end 2002 to 100 million by year-end 2008 and to 50 million by 2013.
- Broadband will make up for some, but not all, of this shortfall. Assuming that ILECs retain reasonable broadband market share, total ILEC lines (including broadband) are forecast to fall from 189 million at year-end 2002 to 135 million by year-end 2008, stabilizing at about 100 million by 2013.
- In the long run, maintaining a reasonable share of the broadband market will require ILECs to offer very-high-speed broadband services (nominally, 24 Mb/s and above) in the 2006 timeframe.
- The transition to very-high-speed broadband will require very significant investment in loop fiber, packet switches, and advanced circuit equipment between now and 2015.
- The combined impact of technology substitution and competition on the depreciation lives (and value) of existing ILEC narrowband switching, copper cable, and conventional circuit equipment assets will be substantial.
Who should read this report?
- Incumbent local exchange carriers
- Competitive LECs
- Interexchange carriers
- Internet service providers
- Telecom equipment manufacturers
- Regulatory personnel
- Depreciation professionals
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