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The Impacts of Competition and Technology on Local Exchange Switching Assets Analysis and Forecasts for Terrestrial Service Providers Lawrence K. Vanston, Ph.D. Description Key findings Who should read this report? Table of contents Exhibits Pricing/Ordering information

Description  [back to top]

This study estimates the impact of competition on narrowband local exchange switches, especially as it relates to obsolescence and depreciation lives. The study addresses access line competition from wireless, resellers, cable companies, and other full-service providers. It also addresses the displacement of voice usage by wireless and e-communications. The impact of these forces on ILEC switches is forecast for both voice and data. Finally, the forecasts are combined with previous forecasts of switch technology, including the adoption of ATM/IP switching, to provide estimated depreciation lives.

Key Findings From This Latest TFI Report  [back to top]

• Competition from wireless and other sources may cut the number of existing ILEC narrowband access lines by 25% between now and 2005.
• Wireless and e-communications -- e-mail, e-commerce, and IP-voice -- could displace enough usage over time to have a major impact on usage-based ILEC voice revenues. Between now and 2005, 50% of existing ILEC revenue-generating voice usage may be lost.
• The economic value of existing ILEC assets will be very much affected by the transition from shared to dedicated lines, the adoption of high-speed data services, and the increase in data rates to above 10 Mb/s.
• When competitive and technology impacts are considered, existing narrowband switching equipment has an average remaining life of between four and five years.

Who should read this report?  [back to top]

• Local Exchange Carriers
• Competitive LECs
• Cellular Carriers
• PCS Carriers
• Wireless Suppliers
• Interexchange Carriers
• Cable MSOs
• Internet Service Providers
• Telecom Equipment Manufacturers
• Regulators
• Depreciation Experts
• Property Tax Experts

Table of Contents  [back to top]

Chapter One

Introduction

• Purpose
• Access Alternatives
• Study Scope
• ILEC Data Issues
• ILEC Voice Issues
• ILEC Switching Transition Issues
• Outline of Forecasting Logic

Chapter Two

Forecasts for Voice Access

• Logic for Voice Access Line Forecasts
• Forecast of Wireless for Wireline Access
• Market Penetration of New Telecom Competitors
• Wireline Primary Voice Households by Provider
• ILEC-Switched Voice Access Lines
• Primary Voice Access Market Shares
• ILEC Switched Voice Access Lines

Chapter Three

Forecasts for Data Access

• Logic for Low-Speed Data Access Line Forecasts
• Forecast of Online Households
• Forecast of High-Speed Digital Access
• Online Households by Primary Data Access Type
• Market Shares for Low-Speed, Dedicated Data Lines
• ILEC-Switched Narrowband Access Lines

Chapter Four

Forecasts of Usage Per Access Line

• Logic for Voice Usage Per Access Line Forecasts
• Wireless for Wireline Forecasts
• Households by Wireline/Wireless Type
• Impact of Wireless on Wireline Voice Usage
• Voice Usage Displaced by E-Communications
• Combined Impacts of Wireless and E-Communications
• Data Usage

Chapter Five

Combined Usage and Access Line Forecasts

• Logic for Combining Access and Usage Forecasts
• ILEC-Switched Narrowband Access Lines
• Usage per Access Line
• Usage Remaining on ILEC-Switched Narrowband Access Lines

Chapter Six

Impacts on ILEC Narrowband Switching Assets

• Forecast of Utility per Access Line
• Impact of Technological Change
• Depreciation Analysis

Appendix A

Tabular Data

List of Exhibits  [back to top]

2.1	Logic for Voice Access Lines
2.2	Forecast of Wireless for Wireline Access
2.3	Market Penetration of New Telecom Competitors
2.4	Wireline Primary Voice Households by Provider
2.5	ILEC-Switched Voice Access Lines
2.6	Primary Voice Access Market Shares
2.7	ILEC Switched Voice Access Lines
3.1	Logic for Low-Speed Data Access Line Forecasts
3.2	U.S. Adoption of Home PCs and Online Services
3.3	Online Households and the Adoption of High-Speed Digital Access
3.4	Online Households by Primary Data Access Type
3.5	Market Shares for Low-Speed, Dedicated Data Lines
3.6	ILEC-Switched Narrowband Access Lines
4.1	Logic for Voice Usage Per Active Wireline Access Line
4.2	Wireless for Wireline Forecasts
4.3	Households by Wireline/Wireless Type
4.4	Base Wireline Voice Usage Left After Impact of Wireless
4.5	Voice Usage Displaced by E-Communications (among Online Users)
4.6	Base Wireline Voice Usage Umpacts of E-Communications
4.7	Base Wireline Voice Usage Left After Combined Impacts
5.1	Logic for Voice Access Lines
5.2	ILEC-Switched Narrowband Access Lines
5.3	Usage Remaining per ILEC-Switched Narrowband Access Line
5.4	Usage Remaining on ILEC-Switched Access Lines
6.1	Indexed Utility Remaining per Existing ILEC-Switched Narrowband Access Line
6.2	ATM Equivalent Access Lines by Implementation Alternative, Late Scenario
6.3	Survivor Curves for ILEC Narrowband Switching

Pricing Information  [back to top]

November 2000, 74 pages, Sponsored by the TTFG, ISBN 1-884154-15-8

US $95 Electronic Delivery

US $95 Hard Copy Mail Delivery

US $95 Hard Copy Mail Delivery Outside US, Canada

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