VERIZON, SBC, BELL SOUTH, AND QWEST:  RBOC MARKET STRATEGIES, OPPORTUNITIES, AND FORECASTS

2001 - 2006

 
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REPORT NO. S80310019577      240+ PAGES     112 TABLES AND FIGURES   2001      

 

    The RBOCs have undertaken a torrid merger and acquisition race.The pace of change is dramatic, reflecting challenges brought by the Internet revolution.

    Understand the significant differences between the evolving RBOCs.Qwest has moved to become a full service wholesale provider, stimulating competition in its region and selling bandwidth to every CLEC.Qwest has positioned as a full service application service provider (ASP).In this manner the company can leverage commodity pricing for bandwidth to participate in value added services markets.

    Bell South has moved to leverage its strengths in residential markets, improving customer service, adding fiber to the curb systems in its network.BellSouth seeks to achieve competitive advantage in consumer markets.High speed Internet access leverages the company’s strengths as a local service provider.

    BellSouth has undertaken a significant initiative with IBM to bring applications that support back office applications to small and midsize businesses.The IBM alliance gives small and midsize businesses access to e-business and web development software and servers.

    Verizon is positioning as a major wireless supplier with a nationwide network.As pricing of wireless connections drops, people use wireless telephones to call locally and for long distance.Bell Atlantic changed its name to the name of its wireless subsidiary.

    The potential to increase professional productivity via the use of wireless communications has only begun.The impact will be noticed in every industry.

    SBC has positioned to transform voice communications systems into data centric systems.The company seeks to be a communications supplier for voice, data, and video.Data wireless, international, and long distance are the areas of investment.These are the market segments driving SBC revenue growth.


 
 

RBOC Strategy Market Assessment

 

 

Verizon, SBC, BellSouth, and Qwest:

RBOC Market Strategies, Opportunities, and Forecasts

2001-2006

 

 

 

 

 

                         

Opportunity To Deliver Value Added Services

 

 

RBOCs

The Big Winners

The Last Mile Becomes Increasingly Significant

POSITIONING TO PARTICIPATE IN HIGH GROWTH WIRELESS SEGMENTS

POSITIONING TO TAKE ADVANTAGE OF INTERNET OPPORTUNITIES

RBOC STRATEGIC POSITIONING FOR GROWTH

 

 

WinterGreen Research, Inc.

Lexington, Massachusetts          www.wintergreenresearch.com

 

 

The Study Gives Detailed Information About The RBOCs

 

Verizon, SBC, BellSouth, and Qwest:

Table of Contents

 

 

Positioning to Participate in changing markets

 

 

CHECK OUT THESE KEY TOPICS

 

Industry Restructuring

Market Strategies

 

Market Growth Opportunities

Service Providers Position With Data Capability

-Local U.S. Telecommunications Services Market Forecasts

Market Shares

Residential Lines

Business Lines

Wireless

Yellow Pages

Calling Features

Data

 

The RBOC business opportunity relates to growth of the Internet and value added services.  As local voice services become commoditized, service providers seek to participate in high margin services provision.

The business opportunity relates to the Internet.  The ability to partition mainframes and offer large enterprise software to small and mid-size businesses opens an entirely new business opportunity to the RBOCs.

 

 

REPORT METHODOLOGY

 

This is the forty third 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 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.

 

 

 

RBOC Local Telecommunications Services Strategy

 

YOU MUST HAVE THIS STUDY


RBOC STRATEGY EXECUTIVE SUMMARY

Executive Summary

 

1.       Regional Bell Operating Company (RBOC)

Market Description   1-1

1.1      Communications Industry Overview    1-1

1.2           Business Opportunity  1-2

1.3           Competitive Market Aspects  1-3

.4             RBOC Description  1-4

1.5           RBOC Market Description  1-5

1.6           Reportable Business Segments  1-7

1.7           Change Drives Industry  1-8

1.8           Exchange Telecommunications Service  1-9

1.9           Change In Long Distance and Network Access Fees  1-10

1.10         Telecommunications Act Of 1996  1-11

1.10.1             Competitive Obligations  1-12

1.11         RBOC Support For Competition  1-12

1.11.1             CLECs Target Business Markets  1-14

1.12         Federal Policies  1-15

1.12.1             FCC Powers  1-15

1.12.2             Incentive Regulation  1-16

1.12.3             Universal Service  1-16

1.12.4             Access Charge Reform   1-18

1.12.5             FCC All Elements Rule  1-18

Long Distance Market Entry Based On Local Services

Competition  1-19

1.14         Price Regulation  1-19

1.15         Competitive Forces That Impact RBOC Businesses  1-20

1.16         Wireless Services  1-21

1.16.1             Wireless Technology  1-21

1.16.2             Digital Wireless Advantages  1-23

1.17         Cable Television  1-24

1.17.1             Cable Competition  1-25

1.18         Communications Switching Systems  1-26

1.18.1             Circuit-Switching Systems  1-26

1.18.2             Packet-Switching Systems  1-27

1.19         Web Hosting  1-28

1.20         Application Service Provider (ASP) 1-29

 

2. RBOC Services Market Forecasts   2-1

2.1           RBOC Services Market Driving Forces  2-1

2.2           RBOC Market Success Factors  2-2

2.3           Competitive Forces  2-3

2.4           Competition In Local Access Markets  2-5

2.5           RBOC Summary Market Shares  2-7

2.6           RBOC Summary Market Forecasts  2-9

2.7           RBOC Local Consumer Services Shares  2-10

2.7.1               RBOC Calling Feature Market Shares  2-12

2.8           RBOC Local Consumer Services Market Forecasts  2-13

2.8.1               RBOC Calling Feature Forecasts  2-15

2.9           Summary RBOC Data Market Shares  2-16

2.10         Summary RBOC Data Market Segments  2-18

2.11         Summary RBOC Data Forecasts  2-19

2.11.1             RBOC Data Market Segment Forecasts  2-23

2.12         RBOC Directory Services Shares  2-24

2.13         RBOC Directory Services Market Forecasts  2-26

2.14         RBOC Network Access Services Shares  2-28

2.15         RBOC Network Access Services Market Forecasts  2-29

2.16         RBOC Wireless Services Shares  2-31

2.17         RBOC Wireless Services Market Forecasts  2-33

2.18         RBOC International Services Market Shares  2-36

2.19         RBOC International Services Market Forecasts  2-38

2.20         RBOC Revenue Analysis By Segment 2-40

2.21         RBOC Capital Investment Strategy  2-41

2.22         RBOC Revenue Summary  2-42

2.23         RBOC Access Line Summary  2-45

2.23.1                 RBOC Total Business Lines - Switched

               And Voice Line Equivalents  2-45

2.23.2             RBOC Switched Business Lines  2-46

2.23.3             RBOC Access Line Equivalents  2-49

2.24         BellSouth Total And Data Access Lines  2-55

2.24.1             Bellsouth Residential Access Lines 2000  2-56

2.24.2             BellSouth Data Transport Services  2-56

2.24.3             Bellsouth Wireless Data  2-58

2.24.4             BellSouth Interactive Marketplace  2-58

2.24.5             BellSouth Interactive Messaging Capabilities  2-58

2.25         Qwest Access Line Summary  2-58

2.26         SBC Data Access Line Summary  2-61

2.27         Verizon Data Access Line Summary  2-65

2.27.1             Verizon Positioning  2-67

2.27.2             Verizon DSL  2-67

 

 

3.   RBOC Strategic Positioning   3-1

3.1           BellSouth Strategies  3-1

3.1.1               Bellsouth Fiber-To-The-Curb (FTTC) Systems  3-4

3.1.2               Bellsouth International Strategy  3-4

3.1.3               Bellsouth International Digital Wireless Strategy  3-5

3.2           Qwest 3-6

3.3           SBC Strategy  3-8

3.4           Verizon Corporate Strategy  3-11

3.4.1               Verizon Corporate Wireless Strategy  3-13

3.4.2               Open To New Ideas  3-14

3.4.3               Diversity  3-14

3.5           Strategic Partnering And Acquisitions  3-15

3.5.1               RBOC Operator Strategic Decisions Relate To Alliances  3-15

3.5.2               New Model Of Flexible Partnering  3-16

3.5.3               Go To Market Alliances  3-19

3.5.4               BellSouth IBM E-Business Alliance Strategy  3-21

3.5.5               Bellsouth / IBM E-Business Initiative Focused At Web-Enabling

     Small And Mid-Sized Businesses  3-22

3.5.6               BellSouth Big Business Strategy  3-24

3.5.7               BellSouth / Qwest 3-26

3.5.8               Qwest / Microsoft Web Sites  3-27

 

4.   RBOC Regions and Organizational Analysis   4-1

4.1           Regions  4-1

4.1.1               BellSouth  4-1

4.1.2               Qwest 4-2

4.1.3               SBC Regions  4-2

4.1.4               Verizon  4-3

4.2           RBOC Organizations  4-3

4.2.1               Consumer Groups  4-4

4.2.2               BellSouth Organization  4-5

4.2.3               BellSouth Telecommunications Organization  4-6

4.2.4               Qwest Organization  4-8

4.2.5               SBC Organization  4-8

4.2.6               SBC Organization  4-9

4.2.7               Verizon Organization  4-12

4.2.8               Verizon Enterprise Business Unit 4-14

4.2.9               Verizon Global Wireless  4-20

4.2.10             Verizon Directory  4-21

4.2.11             Verizon Other Businesses  4-22

 

5.   RBOC Company Profiles   5-1

5.1           Regional Bell Operating Companies (RBOCs) 5-1

5.2           Bellsouth  5-1

5.2.1               BellSouth Research And Development 5-2

5.2.2               Wireless  5-2

5.2.3               BellSouth 2000 Total-Revenues  5-3

5.2.4               Growth Sectors Of BellSouth Businesses  5-3

5.2.5               BellSouth Wireless  5-6

5.2.6               Strengths And Weaknesses Of BellSouth  5-6

5.3           Qwest 5-8

5.3.1               Qwest Partners  5-8

5.3.2               Alliance With Microsoft 5-10

5.3.3               Qwest High-Capacity Fiber Optic Network  5-11

5.3.4               Qwest Equity Investment In Rhythms

     To Position As Data DSL Provider 5-13

5.3.5               Qwest Investment In Covad To Position

     As Data DSL Provider 5-14

5.3.6               Strengths And Weaknesses Of Qwest 5-14

5.3.7               Qwest Revenue 2000  5-17

5.4           SBC Communications (SBC) 5-17

5.4.1               SBC End-To-End Service  5-18

5.4.2               SBC Acquisitions  5-18

5.4.3               SBC Prodigy Agreement 5-20

5.4.4               SBC / Sterling Commerce  5-20

5.4.5               SBC / DirecTV Agreement 5-21

5.4.6               SBC / Williams Communications  5-21

5.4.7               Puerto Rico Acquisition  5-21

5.4.8               Radiofone Acquisition  5-22

5.4.9               SBC Information And Entertainment 5-22

5.4.10             Directory And Electronic Advertising Services  5-22

5.4.11             Security Monitoring Services  5-23

5.4.12             Comcast Acquisition  5-23

5.4.13             Cable Television Services  5-23

5.4.14             Cable Television Licenses  5-24

5.4.15             In-Region Long Distance  5-24

5.4.16             SBC Revenue  5-25

5.4.17             SBC National-Local Trends  5-26

5.4.18             Strengths And Weaknesses Of SBC   5-26

5.4.19             SBC Project Pronto  5-30

5.4.20             SBC Wireless  5-30

5.5           Verizon  5-31

5.5.1               Verizon Domestic Telecom   5-39

5.5.2               Verizon Global Wireless  5-40

5.5.3               Verizon Bell Atlantic / GTE Merger 5-42

5.5.4               Verizon Nationwide Wireless Venture  5-43

5.5.5               Strengths And Weaknesses Of Verizon  5-43

 

List of Tables and Figures

Market Forecasts 2001-2006              Market Shares 2000

Based on analysis of year 2000 revenue in multiple market segments

List of Tables and Figures

 

Table 1-1  1-3

Varied Range Of Communication Service Providers

Table 1-2  1-5

RBOC Services And Products

Table 1-3  1-6

RBOC Business Divisions

Table 1-4  1-9

Change in Local Communications Services

Table 1-5  1-13

RBOC Competitive Obligations

Table 1-6  1-22

Digital Wireless Technology Market Advantages

Table 1-7  1-23

Digital Cellular Technology Advantages

Table 1-8  1-29

Functions Of Application Service Providers (ASPs)

 

Table 2-1  2-2

RBOC Services Market Driving Forces 

Table 2-2  2-3

RBOC Services Market Success Factors 

Table 2-3  2-4

Principal Competitive Factors In RBOC Services Markets 

Table 2-4  2-4

Competitive Product Positioning For RBOC Services Markets 

Table 2-5  2-6

Competitors In Telecommunication Local Access Services Markets 

Table 2-6  2-7

Factors contributing to intensifying competition 

Figure 2-7  2-8

RBOC Total Revenue Market Shares, Dollars, 2000

Table 2-8  2-8

RBOC Total Revenue Market Shares, Dollars, 2000

Figure 2-9  2-9

RBOC Total Market Forecasts, Revenue, 2000-2006

Table 2-10  2-10

RBOC Total Market Forecasts, Revenue, 2000-2006

Figure 2-11  2-11

RBOC Landline Local Consumer Services

Market Shares, Dollars, 2000

Table 2-12  2-11

RBOC Landline Local Consumer Services

Market Shares, Dollars, 2000

Figure 2-13  2-12

RBOC Calling Feature Revenue Market Shares, 2000

Table 2-14  2-13

RBOC Calling Feature Revenue Market Shares, 2000

Figure 2-15  2-14

RBOC Wireline Consumer Market Forecasts, 2000-2006

Table 2-16  2-14

RBOC Wireline Consumer Market Forecasts, 2000-2006

Figure 2-17  2-15

RBOC Calling Feature Market Forecasts, Revenue, 2000-2006

Table 2-18  2-16

RBOC Calling Feature Market Forecasts, Revenue, 2000-2006

Figure 2-19  2-17

RBOC Data Services Market Shares, Dollars, 2000

Table 2-20  2-17

RBOC Data Services Market Shares, Dollars, 2000

Table 2-21  2-18

RBOC Data Market Shares By Segment,

Dollars, 2000 In Millions of Dollars

Figure 2-22  2-20

US. Data Communications Services

Market Forecasts, Dollars, 2000-2006

Table 2-23  2-20

US. Data Communications Services Market

Forecasts, Dollars, 2000-2006

Table 2-24  2-21

Key Drivers In RBOC Data Communications Growth 

Table 2-25  2-22

Uses of RBOC Data Communication 

Table 2-26  2-24

RBOC Data Market Segments, 2000-2006

Figure 2-27  2-25

RBOC Directory Services Revenue Market Shares, Dollars, 2000

Table 2-28  2-25

RBOC Directory Services Revenue Market Shares, Dollars, 2000

Figure 2-29  2-27

RBOC Directory Services Market Forecasts, 2000-2006

Table 2-30  2-27

RBOC Directory Services Market Forecasts, 2000-2006

Figure 2-31  2-28

RBOC Network Access Revenue Market Shares, Dollars, 2000

Table 2-32  2-29

RBOC Network Access Revenue Market Shares, Dollars, 2000

Figure 2-33  2-30

RBOC Network Access Market Forecasts, 2000-2006

Table 2-34  2-31

RBOC Network Access Market Forecasts, 2000-2006

Figure 2-35  2-32

RBOC Wireless Revenue Market Shares, Dollars, 2000

Table 2-36  2-32

RBOC Wireless Revenue Market Shares, Dollars, 2000

Figure 2-37  2-35

RBOC Wireless Market Forecasts, 2000-2006

Table 2-38  2-36

RBOC Wireless Market Forecasts, 2000-2006

Figure 2-39  2-37

RBOC International Revenue Market Shares, Dollars, 2000

Table 2-40  2-38

RBOC International Revenue Market Shares, Dollars, 2000

Figure 2-41  2-39

RBOC International Market Forecasts, 2000-2006

Table 2-42  2-40

RBOC International Market Forecasts, 2000-2006

Table 2-43  2-41

Total RBOC Segment Market Forecasts, 2000-2006

Table 2-44  2-42

RBOC Capital Expenditures, Dollars, 2000

Figure 2-45  2-43

BellSouth Market Segment Revenue, Dollars, 2000

Table 2-46  2-43

Qwest Market Segment Revenue, Dollars, 2000

Table 2-47  2-44

SBC Market Segment Revenue, Dollars, 2000

Table 2-48  2-44

Verizon Market Segment Revenue, Dollars, 2000

Table 2-49  2-45

Total Access Lines, 2000

Table 2-50  2-46

Total Access Lines, 2000

Figure 2-51  2-47

RBOC Switched Access Lines As A Percent

Of Total Access Lines, 2000

Figure 2-52  2-48

RBOC Business Access Line Market Shares, 2000

Figure 2-53  2-49

RBOC Total Access Line Market Shares, 2000

Figure 2-54  2-50

RBOC Switched Access Lines As A Percent

Of Voice Grade Equivalent Access Lines, 2000

Figure 2-55  2-51

RBOC Voice Grade Equivalent Access Lines As A Percent

Of Total Switched Voice Grade Equivalent Access Lines, 2000

Figure 2-56  2-52

RBOC Voice Grade Equivalent And

Switched Access Lines As A Percent

Of Total Switched Voice Grade Equivalent Access Lines, 2000

Figure 2-57    2-53

RBOC Voice Grade Equivalent

Access Line Market Shares, 2000

Figure 2-58  2-54

RBOC Total Switched And Voice Grade Equivalent

Access Line Market Shares, 2000

Figure 2-59  2-55

Bell South Total Switched Access Lines, By State, 2000

Table 2-60  2-56

Bell South Residential Access Lines, By State, 2000

Table 2-61  2-59

Qwest Consumer Access Lines

Table 2-62  2-60

Qwest Business Lines by State, 1999 and 2000

Table 2-63  2-61

Qwest Total Access Lines By State, 1999 and 2000

Wireline Operations Residential Primary Access Lines In Thousands

Table 2-64  2-62

SBC Access Lines, 1999 

Table 2-65  2-63

SBC Access Lines, 2000 

Table 2-66  2-64

SBC Voice Grade Equivalents, 1999 

Table 2-67  2-64

SBC Voice Grade Equivalents, 2000 

Table 2-68  2-65

Bell Atlantic Switched Access Lines, 1999

Table 2-69  2-66

Verizon Access Lines, 2000

Table 2-70  2-67

Verizon / Northpoint Subscribers 

 

Table 3-1  3-2

BellSouth Strategic Goals

Table 3-2  3-7

Qwest Strategic Goals

Table 3-3  3-9

SBC Strategic Goals

Table 3-4  3-12

Verizon Strategic Goals

Table 3-5  3-16

RBOC Model Of Flexible Partnering

Table 3-6  3-17

Structure Of RBOC Strategic Alliances

Table 3-7  3-17

Go To Market Alliance Structure

Table 3-8                                                                                                                                                                        3-18

Examples Of RBOC Strategic Alliances

Table 3-9  3-25

BellSouth Big Business Strategy

 

Table 4-1  4-3

RBOC Major Customer Bases

Table 4-2  4-4

RBOC Consumer Services

Table 4-3  4-5

BellSouth Reportable Operating Segments

Table 4-4  4-9

SBC Operating Subsidiary Groups

Table 4-5  4-10

SBC Merger Reorganization Initiatives

Table 4-6  4-15

Verizon Enterprise Services

Voice Switching/Processing Services

Table 4-7  4-16

Verizon Network Optimization Enterprise Services

Table 4-8  4-16

Verizon Video Enterprise Services

 

Table 5-1  5-3

Growth Sectors of BellSouth Businesses in 2000 

Table 5-2  5-5

BellSouth Customer Growth Market Drivers 

Table 5-3  5-7

Strengths and Weaknesses of BellSouth 

Table 5-4  5-9

Qwest Partners 

Table 5-5  5-10

Qwest Network Resource Optimization Factors 

Table 5-6  5-13

Qwest Network Advantages 

Table 5-7  5-14

Strengths and Weaknesses of Qwest

Table 5-8  5-27

Strengths and Weaknesses of SBC  

Table 5-9  5-39

Verizon Wireline Telecommunications Services Offerings 

Table 5-10  5-41

Verizon Global Wireless Telecommunications Services 

Table 5-11  5-42

Verizon Global Directory Domestic And International

Publishing Business Aspects 

Table 5-12  5-43

Strengths and Weaknesses of Verizon 


RBOC Market Dynamics


Many of these Key Topics Have Phenomenal Subcategories


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 Telecommunicaitons Equipment, Top Ten Telecommunications, Digital Loop Carrier, Web Hosting, and Application Integration markets.  Ms. Eustis is a graduate of Barnard College.

 

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