Next Generation Digital Loop Carrier Market Opportunities, Strategies, and Forecasts, 2003 to 2008

Report # SH29821299 | 360+ Pages | 120+ Tables and Figures | 2003

Next Generation Digital Loop Carrier Messaging Market Assessment

Market Segmentation
Digital Loop Carrier Market Shares
Next Generation Digital Loop Carrier Forecasts
Digital Loop Industry
Carrier Requirements
RBOC Use of Digital Loop Carrier and XDSL
Digital Loop Carrier Competitive Forces
Internet Impact on Access Networks
Advanced Fiber Communications
Broadband Services
Network Layer Service Intelligence
Management of Ethernet in the First Mile
EPON Concept
Circuit Networks vs. Packet Networks
Reduced Complexity
Technology Challenges

Next Generation Digital Loop Carrier Market Opportunities, Strategies, and Forecasts, 2003 to 2008

The service provider converged voice and data network promises to be implemented as nodes in a neighborhood or remote switches in regional locations. Digital loop carriers are the base for broadband services delivery.

The Internet is poised to spin off thousands of specialized broadband services. The access network needs digital loop carriers (DLCs) that provide the platform for delivery of these services.

NGDLCs extend the reach of connections to remotely located subscribers and improve overall service quality. Over the past three decades, DLCs have evolved to next-generation digital loop carriers (NGDLCs) capable of simultaneously providing POTS and advanced broadband services, such as digital subscriber lines (DSL).

NGDLCs are economical and scalable vehicles to deliver POTS, narrowband, and broadband services. Lack of broadband capability in the majority of the DLC installed base is a factor prompting spending by carriers.

Broadband services shifts, regulation, and technology influence the pace of change in the access network. There is ongoing demand for broadband connections. Broadband will completely replace narrowband within ten years.

Any significant changes in broadband regulation could trigger growth in the access market by encouraging carriers to invest in upgrading neighborhood networks with new equipment that delivers broadband services. Congress' enactment of the 1996 Telecommunications Act (the Act) created an environment in which carriers accelerated their offerings of voice, data and video services. In February 2003, the Federal Communications Commission (FCC) adopted new rules concerning incumbent local exchange carrier obligations for elements of their networks.

NGDLC technologies make broadband rollout economical for a higher percentage of the population. Six-circuit card NGDLCs are efficient. Innovative evolution helps drive down deployment costs. Over time, these three factors are expected to stimulate an increase in investment in the access network.

Micro-DLC solutions enable service providers to meet growing demands for additional phone, fax, and data lines in residential and business areas with limited copper deployment. Systems reduce equipment and labor costs associated with line installation. They provide a quick solution for filling held orders.

At of the end of 2002, 45% of the U.S. equipped lines and investment in the major telcos access networks was unused. Only 36%were unused in 1997. That is a 20%jump in unused local network capacity in 5 years. Stranded capacity is a significant aspect of broadband communications network planning. NDLCs are being combined with Metro DWDM platforms. Platforms promise to further increase the access capacity with the transport platforms taking on some access capability.

Growing market demand for high bandwidth services is forcing telecom providers to reevaluate their network planning models and create new ones. Network planners and engineers responsible for this emerging network face a complex problem: how to effectively implement a network that optimizes diverse such as voice, video, and data services.

Overlay networks and discrete network elements are being replaced with integrated platforms. Existing investment needs to be protected while maintaining the design requirements for a packet, digital network.

An integrated multi-service access platform provides a foundation for multi-service deployment, with an evolutionary path to networks of the future.

Functional Partitioning / NGDLC Platforms Embrace Access In Neighborhood Nodes

 The metropolitan and the local access markets are changing simultaneously. This leads to the opportunity to build bradband services capability out to the neighborhood, replacing the narrowband circuit swith functions in the neighborhood instead of the central office to bring IP to homes and businesses. Switching and routing functions work from remote boxes in neighborhoods to implement converged systems. The functional split between access, switching, and transmission is changing. Metro DWDM platforms are evolving access and application capability. The split in access, switching, and transmission functionality is a result of the fact that high-value service terminations are best concentrated in the network core. High-value service terminations depend on use of expensive equipment and personnel. The network edge is more appropriately the place for access devices. Bringing switching and routing functions to the access network goes against all past and current practices in functional partitioning. Field technicians are trained to deal with copper and fiber-transmission. Field technicians manage multiplexing issues. Complex functions including switching are left to the central office or network operations center.

Specially trained personnel are available. Some scenarios predict the separation of incumbent carriers into wholesale and retail entities. This market division is designed to facilitate loop unbundling. Access multiplexing and service processing become even more distinct and stratified if this occurs.

Disruptive Operations 

Network equipment vendors tend to believe deeply in their product technologies, but this belief can blind innovators to a less attractive-but no less important-element of the network business equation: manageability.

A product that can be managed easily ultimately determines that it can be deployed successfully. Unless it is stationed in an entirely new network, a product best chance of success lies in its ability to fit the telco PMO. Converged systems NGDLC vendors leverage the value proposition of a product that can be placed in the neighborhood along with existing equipment.

Carriers that are incumbent cannot justify retooling an entire back office along with massive retraining of personnel.

Vendors design interfaces and operations methods to fit existing technologies. This strategy supports the legacy software and interfaces for which legions of central office, NOC, and field personnel have been laboriously and expensively trained.

Digital loop carrier (DLC) market dollar shipments at $1.8 billion in 2000 declined to $945 million in 2002, and are expected to remain flat through 2005, reach $1 billion by 2006 and $1.4 billion by 2008.



Companies Profiled
Advanced Fibre Communication (AFC)
Lucent Technologies
Zhone Technologies
Forum Systems
Cisco Systems
Redback Networks
UT Starcom

Report Methodology

This is the one-hundred thirtieth report in a series of market research reports that provide forecasts in communications, telecommunications, the internet, computer, software, and telephone equipment. The project leaders take direct responsibility for writing and preparing each report. They have significant experience preparing industry studies. Forecasts are based on primary research and proprietary data bases. Forecasts reflect analysis of the market trends in the segment and related segments. Unit and dollar shipments are analyzed through consideration of dollar volume of each market participation in the segment. Market share analysis includes conversations with key customers of products, industry segment leaders, marketing directors, distributors, leading market participants, and companies seeking to develop measurable market share. Over 200 in-depth interviews are conducted for each report with a broad range of key participants and opinion leaders in the market segment.

About the Company

WinterGreen Research, founded in 1985, provides strategic market assessments in telecommunications, communications equipment, health care, and advanced computer technology. Industry reports focus on opportunities that will expand existing markets or develop major new markets. The reports assess new product and service positioning strategies, new and evolving technologies, and technological impact on products, services, and markets. Market shares are provided. Leading market participants are profiled, and their marketing strategies, acquisitions, and strategic alliances are discussed. The principals of WinterGreen Research have been involved in analysis and forecasting of international business opportunities in telecommunications and advanced computer technology markets for over 30 years.

About the Principal Authors

Ellen T. Curtiss, Technical Director, co-founder of WinterGreen Research, conducts strategic and market assessments in technology-based industries. Previously she was a member of the staff of Arthur D. Little, Inc., for 23 years, most recently as Vice President of Arthur D. Little Decision Resources, specializing in strategic planning and market development services. She is a graduate of Boston University and the Program for Management Development at Harvard Graduate School of Business Administration. She is the author of recent studies on worldwide telecommunications markets and the Top Ten Telecommunications market analysis and forecasts.

Susan Eustis, President, co-founder of WinterGreen Research, has done research in communications and computer markets and applications. She holds several patents in microcomputing and parallel processing. She is the author of recent studies of the Regional Bell Operating Companies' marketing strategies, Internet equipment, a study of Internet Equipment, Worldwide Telecommunications Equipment, Top Ten Telecommunications, Digital Loop Carrier, Web Hosting, and Application Integration markets. Ms. Eustis is a graduate of Barnard College.

2003 WinterGreen Research, Inc. All Rights Reserved.