Digital Loop Carrier Market Strategies and Forecasts, 2001-2006 2006 Table of Contents EXECUTIVE SUMMARY ES-1 1. DIGITAL LOOP CARRIER MARKET DESCRIPTION 1-1 TOC-1
1.1 Market Condition 1-1 1.2 Telecom Markets 1-1 1.3 Telecommunications Industry Shifts 1-2 1.4 Point Of Presence 1-4 1.5 Evolution of the Last Mile 1-5 1.6 Distinct Access Systems 1-7 1.7 Combined Voice And Data 1-8 1.8 Reduced Complexity 1-8 1.9 Broadband Implementation By Incumbent Service Providers 1-9 1.10 Upgrades to Existing DLCs 1-10 1.11 Integrated Multimedia Services 1-10 1.12 Integrated Video Services 1-11 1.13 Digital Loop Carrier product Positioning 1-11 1.14 RBOC Use of Digital Loop Carriers and XDSL 1-12 1.15 Bundled Services 1-14 1.16 DLC Functions 1-14 TOC-2
1.17 Design Solutions 1-15 1.18 Coaxial Cable Internet Competition 1-16 1.19 Copper Loop Conditioning 1-16 2. DIGITAL LOOP CARRIER MARKET FORECASTS 2-1 2.1 DLC Market Driving Forces 2-1 2.2 Digital Loop Carrier Competitive Forces 2-2 2.3 Digital Loop Carrier Customer Demands 2-4 2.4 Digital Loop Carriers Market Shares 2-7 2.5 Pricing 2-11 2.5.1 DLC Pricing Variables 2-11 2.5.2 Alcatel Pricing 2-12 2.5.3 Lucent Pricing 2-13 2.5.4 AFC pricing 2-13 2.6 Digital Loop Carrier Market Forecasts 2-14 2.6.1 Penetration Analysis 2-14 TOC-3
2.6.2 Large Digital Loop Carriers 2-17 2.6.3 Small Digital Loop Carriers 2-19 2.6.4 digital loop carrier forecast 2-21 2.6.5 replacement market 2-23 2.7 Regional Analysis 2-25 2.8 Digital Loop Carrier Market Partnering Issues 2-31 2.9 Voice and Data Services Market 2-32 2.10 Market Segmentation 2-33 2.10.1 Business Markets 2-33 2.10.2 Residential Markets 2-34 2.10.3 Potential Customers / Target Market 2-34 2.10.4 Small Telco Target Markets 2-38 2.11 The Internet And Digital Loop Carriers As A Market Force In Local Access 2-38 2.11.1 Global Economy 2-39 2.11.2 Intensifying Competition On A Global Scale 2-41 2.11.3 Business Forces Driving Change 2-43 2.11.4 Pace Of Technological Change 2-43 2.11.5 Response To Change 2-44 2.12 Circuit Networks Vs Packet Networks 2-45 2.12.1 Convergence Of Voice And Data 2-46 2.12.2 End-To-End Internet Solutions 2-46 TOC-4
2.12.3 Rapid, Flexible Deployments 2-47 2.12.4 E-Services 2-48 2.12.5 E-Services Partnering 2-49 2.13 Internet 2-52 2.13.1 Web Based Supply Chain Exchanges 2-53 2.13.2 Exchange Infrastructure Functionality 2-54 2.13.3 Internet Explosion 2-55 2.14 Internet Users 2-56 2.15 Need For Digital Loop Carriers 2-57 2.15.1 Web Lifestyle 2-59 2.15.2 Time To Market Issue 2-59 2.15.3 ATM Packet Networks 2-60 3. DIGITAL LOOP CARRIER PRODUCT DESCRIPTIONS 3-1 3.1 Overview 3-1 3.2 Multiservice Digital Loop Carriers 3-3 3.3 Alcatel 3-5 3.3.1 Integration of DSL into Litespan 3-6 3.3.2 Higher Density On Voice And DSL 3-6 TOC-5
3.3.3 Derived Voice over DSL 3-7 3.3.4 NGDLC to NWDLC 3-7 3.3.5 Alcatel Litespan Positioning 3-8 3.4 Nortel AccessNode 3-8 3.4.1 Nortel AccessNode Key Benefits 3-9 3.5 Lucent AnyMedia Access System 3-12 3.5.1 Lucent Technologies AnyMedia Benefits 3-13 3.5.2 COM101 Circuit Pack 3-15 3.5.3 The Fibre-to-the-Curb, Building and Home 3-16 3.5.4 Full Service Access Network 3-17 3.5.5 AnyMedia Access System Application Packs 3-19 3.5.6 Lucent AnyMedia 3-20 3.5.7 Lucent SLC LineReach 3-22 3.5.8 Lucent DDM-2000 FiberReach Narrowband Shelf 3-22 3.5.9 Lucent / Copper Mountain Networks 3-23 3.5.10 Lucent DLC Product Strategy 3-23 3.5.11 Lucent AnyMedia Access System 3-24 3.6 Advanced Fibre Communications (AFC) Products 3-24 3.6.1 UMC 1000 3-25 3.6.2 Custom ASIC 3-25 3.6.3 The UMC1000 Multi-Service Access Platform 3-26 3.6.4 Design Philosophy 3-27 3.6.5 AFC's ONX1012 Optical Network Access System 3-29 3.6.6 UMC 1000 System Expansion 3-29 TOC-6
3.6.7 UMC 1000 Remote Subscriber Terminal (RST) 3-30 3.6.8 UMC 1000 Media Fiber Optic Transport 3-30 3.7 Marconi / RelTec 3-32 3.8 Fibex / Cisco 3-33 3.9 Redback Networks 3-35 3.9.1 Redback Subscriber Support System 3-35 3.9.2 ASICS 3-36 3.9.3 Redback SmartEdge Family 3-36 3.9.4 ADC and Redback Networks SONET and IP Transport Solutions for Cable Market 3-37 3.10 Next Level Communications 3-38 3.10.1 Flexible-Integrated System. 3-38 3.10.2 Broadband Digital Terminal 3.10.3 Universal Service Access Multiplexer 3-40 3.10.4 Broadband Network Unit. 3-40 3.11 Accelerated Networks Switched VoDSL 3-41 3.11.1 Multiservice Broadband Access 3-42 3.12 Infinitec Inteleflex DLC System 3-43 3.13 Redback Subscriber Management System 10000 3-43 3.13.1 Parallel Switch Fabric 3-44 3.13.2 Direct Processing Architecture 3-44 3.13.3 Carrier-Class Redundancy For Mission-Critical Networks 3-47 TOC-7
3.13.4 Multiple Service Aggregation 3-49 3.13.5 Multiple Aggregation for the Mega-POP 3-50 3.14 DLCNetwork Management Systems 3-57 3.14.1 Nortel Networks DLC Open Network Management System 3-58 3.14.2 Next Level DLC Network Management Systems 3-58 3.14.3 Alcatel Access Management System 3-59 4. DIGITAL LOOP CARRIER TECHNOLOGY 4-1 4.1 Project Pronto 4-1 4.2 SBC Advanced Data Services 4-2 4.2.1 SBC e-tone 4-6 4.2.2 SBC's DSL Service 4-8 4.2.3 SBC Fiber 4-8 4.2.4 SBC DSL 4-9 4.2.5 SBC e-tone IBM and E*Trade Strategic Alliance 4-10 4.2.6 SBC Aggressively Migrates To Converged Voice, Data, Video Network 4-10 4.2.7 SBC Voice Trunking Over ATM 4-11 TOC-8
4.3 Qwest 4-12 4.3.1 Qwest All-Optical Nationwide Network 4-12 4.4 Switch Interfaces Include GR-303 4-13 4.5 V5.2 4-14 4.6 xdsl Infrastructure Issues 4-15 4.7 Architecture Reduces Cost And Complexity 4-17 4.8 End-To-End Solutions 4-17 4.9 Standards-Based, Open Architecture 4-18 4.9.1 International NGDLC System 4-18 4.10 Security 4-18 4.11 Power Considerations 4-19 4.12 Advanced Application Specific Integrated Circuits Architecture 4-20 4.13 System Design And Integration 4-21 4.14 Dense Wavelength Division Multiplexing Technology 4-22 4.15 Sonet 4-22 4.16 Standards-Based Architecture 4-24 4.17 Software And Protocol Stacks 4-24 TOC-9
4.18 Element Management System 4-25 4.19 Equipment Issues / Digitizing Voice Signals 4-27 4.20 Enclosures Outside Plant 4-35 4.20.1 Indoor Cabinets 4-35 5. DIGITAL LOOP CARRIER (DLC) COMPANY PROFILES 5-1 5.1 ADC Telecommunications 5-2 5.1.1 Revenue 5-5 5.1.2 ADC and PairGain Technologies 5-6 5.1.3 Pairgain 5-6 5.2 Advanced Fibre Communications (AFC) 5-7 5.2.1 Advanced Fibre Communications (AFC) 5-8 5.2.2 Advanced Fibre Communications / Marconi Communications 5-9 5.2.3 Distribution 5-10 5.2.4 Advanced Fibre Communications DLC Network Access System 5-10 5.2.5 Platforms 5-12 5.2.6 Global Presence 5-12 5.2.7 Advanced Fibre Communications Revenues 5-13 5.2.8 Industry Alliances 5-13 TOC-10
5.2.9 Markets And Customers 5-16 5.2.10 Revenue 5-17 5.3 Accelerated Networks 5-17 5.4 Alcatel 5-18 5.4.1 Alcatel Acquisitions 5-19 5.5 Alcatel 5-20 5.5.1 Alcatel Organization / Internet Division 5-21 5.6 Cisco Systems 5-22 5.6.1 Cisco Sales Overview 5-23 5.7 Copper Mountain Networks 5-24 5.8 Efficient Networks 5-24 5.9 Ericsson 5-25 5.9.1 Flexible Access Products 5-26 5.9.2 Ericsson Makes Strategic Investment In Saraïde.Com 5-27 5.9.3 Acquisitions And Investments 5-27 5.10 Infinitec 5-29 5.10.1 Inteleflex A New Generation Digital Loop Carrier 5-29 5.11 Lucent 5-30 5.11.1 Company Organization 5-31 5.11.2 Outsourcing Portfolio 5-33 TOC-11
5.11.3 Lucent Customer Base 5-33 5.12 Lucent Acquisitions 5-34 5.12.1 Acquisition Of Excel Switching 5-36 5.12.2 Outsourcing Portfolio Expanded With INS 5-38 5.12.3 Ascend Business Segments 5-38 5.12.4 Nexabit Networks 5-38 5.12.5 Spring Tide 5-39 5.12.6 Lucent Divestiture Of Enterprise And Microelectronics 5-39 5.12.7 Lucent AnyMedia Products 5-40 5.13 Marconi / Reltec 5-41 5.13.1 Global Presence 5-42 5.13.2 Marconi 5-43 5.14 Next Level Communications 5-44 5.14.1 Next Level Communications From General Instrument 5-45 5.14.2 Outsource Manufacturing 5-45 5.14.3 Products 5-45 5.15 Nortel Networks 5-46 5.15.1 Strategies 5-46 5.15.2 Lines Of Business 5-46 5.16 Redback 5-47 5.16.1 Products 5-47 5.16.2 Differentiation 5-48 5.16.3 Customers 5-49 TOC-12
5.16.4 Distribution And Partners 5-50 5.17 Scientific Atlanta 5-51 5.18 Tellabs 5-52 5.18.1 Tellabs Advanced Switch Interfaces 5-52 6. DIGITAL LOOP CARRIER COMPANY STRATEGIC ALLIANCES AND STRATEGIC POSITIONING 6-1 6.1 Alcatel Technology Agreements With ADC And Adtran 6-1 6.2 Lucent Anymedia Access System 6-2 6.3 AFC EMAX Applications 6-9 6.4 AFC Multi-Year Supplier Contract With France Telecom For Access Equipment 6-10 6.5 Next Level Communications / Verizon / GTE 6-10 6.6 Next Level Communications / Independent Telephone Companies 6-11 6.6.1 VERIZON / ALCATEL'S ADSL 6-12 6.7 Cisco 6-13 6.8 Fujitsu / AFC 6-15 TOC-13
6.9 DLC Support Services 6-16 6.10 Preferred Vendor Strategy 6-18 6.11 Phased Expansion Of A Network 6-18 List of Tables and Figures Table 1-1 1-2 Telecommunications Industry Shifts Table 1-2 1-5 Significant Technological And Architectural Advances Table 1-3 1-7 Market Environment Driving Increased Use of DLCs Table 1-4 1-12 Digital Loop Carrier Product Positioning TOC-14
Table 2-1 2-1 DLC Market Driving Forces Table 2-2 2-2 Principal Competitive Factors In Digital Loop Carrier Market Table 2-3 2-3 Competitive Product Positioning For Digital Loop Carrier Markets Table 2-4 2-4 Digital Loop Carrier Market Success Factors Table 2-5 2-5 Digital Loop Carrier Customer Demands Table 2-6 2-6 Digital Loop Carrier Market Positioning Table 2-7 2-7 DLC Competitors TOC-15
Figure 2-8 2-9 Worldwide Digital Loop Carrier Market Shares, 2000 Table 2-9 2-9 Worldwide Digital Loop Carrier Market Shares, 2000 Table 2-10 2-11 Digital Loop Carrier (DLC) Market Penetration Unit Shipment Analysis, United Staes, 2000-2006 Table 2-11 2-12 Digital Loop Carrier (DLC) Data Line Size Market Penetration 2000-2006 Figure 2-12 2-13 Large Digital Loop Carrier Market Forecasts, 2000-2006 Table 2-13 2-14 Large Digital Loop Carrier Large System Shipments, Units and Dollars, 2000-2006 Figure 2-14 2-15 TOC-16
Small and Mid Size Digital Loop Carrier Market Forecasts, 2000-2006 Table 2-15 2-15 Digital Loop Carrier Small and Mid Size System Shipments, Units and Dollars, 2000-2006 Figure 2-16 2-16 Digital Loop Carrier Market Forecasts, 2000-2006 Table 2-17 2-17 Digital Loop Carrier Market Forecasts, 2000-2006 Table 2-18 2-18 Digital Loop Carrier Market Dollar Shipment Analysis, United States, 2000-2006 Figure 2-19 2-20 Worldwide Digital Loop Carrier Regional Market Shares, 2000 Table 2-20 2-21 Worldwide Digital Loop Carrier Regional Market Shares, 2000 Figure 2-21 2-22 TOC-17
Worldwide Digital Loop Carrier Regional Market Shares, 2006 Table 2-22 2-23 Worldwide Digital Loop Carrier Regional Market Shares, 2005 Table 2-23 2-24 Worldwide Digital Loop Carrier Regional Market Forecasts, 2000-2006 Table 2-24 2-25 Digital Loop Carrier Market Partnering Issues Figure 2-25 2-26 Internet Access Servioces Market Forecasts, 2000-2006 Table 2-26 2-34 Market Forces For Global Economy Table 2-27 2-36 Factors Impacting The Level Of Price And Product Competition Table 2-28 2-37 Response To Competition TOC-18
Table 2-29 2-38 Business Forces Driving Change Table 2-30 2-40 Digital Loop Carrier Provider Response To Change Table 2-31 2-46 E-Services Partnering Strategy Table 2-32 2-47 Internet Market Driving Forces Table 2-33 2-49 Web Based Supply Chain Exchanges Table 2-34 2-52 Major Factors Driving Local Access Value Added Services Markets Table 2-35 2-53 Key Strategies Of The Internet Digital Loop Carrier Providers Table 2-36 2-55 ATM Market Impact TOC-19
Table 3-1 3-3 Attributes of a DLC System Table 3-2 3-9 Nortel AccessNode Key Benefits Table 3-3 3-10 Nortel DLC Service Adaptive Access Technology Table 3-4 3-11 Nortel Networks Universal Edge portfolio Table 3-5 3-12 Nortel Integrated DLC Services Supported Table 3-6 3-13 Lucent Technologies AnyMedia Benefits TOC-20
Table 3-7 3-18 Lucent AnyMedia Access System Building Blocks. Table 3-8 3-19 Lucent Application Pack Services Table 3-9 3-28 Unique Design Features of UMC Terminals Table 3-10 3-39 Next Level Communications Network Elements Table 3-11 3-46 Redback Subscriber Management System I/O modules Supported Table 3-12 3-48 SMS Carrier-Class Mission-Critical Network Features Table 3-13 3-51 Redback Subscriber Management System SMS 10000 Features and Functions Table 3-14 3-52 TOC-21
Redback Subscriber Functions Table 3-15 3-53 Redback Subscriber Management Protocols Table 3-16 3-54 Redback Subscriber Management System Security Table 3-17 3-55 Redback Subscriber Management System Accounting and Network Management Table 3-18 3-56 Redback Subscriber Management System Advanced Features Table 3-19 3-57 Software License Configurations TOC-22
Table 4-1 4-2 SBC Broadband Strategies Table 4-2 4-3 SBC Broadband Strategic Alliances Table 4-3 4-4 SBC Corporate Strategy for Data Table 4-4 4-7 SBC Broadband Applications Table 4-5 4-7 SBC Advanced Broadband-Powered Services Table 4-6 4-10 SBC IBM, PeopleSoft, and E*Trade Strategic Alliance Table 4-7 4-14 V5.2 Benefits And Capabilities Table 4-8 4-15 Advanced Fiber Communications EMAXT TOC-23
Equipment Maximization System Table 4-9 4-16 Copper Line Direct Connect Vs. Shared Cable Coax Technology And Issues Table 4-10 4-19 MDLC Power Issues Table 4-11 4-21 Application Specific Integrated Circuit Categories Table 4-12 4-23 Carriers Issues for Deploying Fiber Optic Communication Standards Table 4-13 4-25 Types of Telecommunications Platform Software Table 4-14 4-26 Element Management System Solutions Table 4-15 4-27 TOC-24
DLC Equipment Issues Regarding Digitizing Analog Voice Signals Table 4-16 4-28 Multiplexing Equipment Issues Table 4-17 4-29 T-1 Transmission Defined Table 4-18 4-30 T-1 vs. DS-1 Table 4-19 4-31 T-1 Evolution Table 4-20 4-32 Fractional T-1 Table 4-21 4-35 SONET TOC-25
Table 5-1 5-1 DLC Competitors Table 5-2 5-8 Advanced Fibre Communications Strengths and Challenges in DSL Market Table 5-3 5-14 AFC Strategic Technology Alliances Table 5-4 5-20 Alcatel Strengths And Challenges in DLC Market Table 5-5 5-28 Ericsson Portfolio Table 5-6 5-34 Lucent Acquisitions TOC-26
Table 5-7 5-42 Selected RelTec Customers Table 5-8 5-49 Redback Key Customers Table 6-1 6-2 Lucent DLC Customers Table 6-2 6-14 Principal Functions Of A Cisco Access Network Table 6-3 6-17 DLC Strategic Positioning Table 6-4 6-17 DLC Platform Positioning TOC-27
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