US carriers' carrier market 'to recover' by Q1 2003

25 September 2002 -- After flat growth in 2002, US wholesale, private-line growth is set to reach USD19.7bn in 2003, a 27% increase year-over-year, according to a new report from Yankee Group.

25 September 2002 -- Within the US telecommunications industry, few firms have soared as high or fallen as low as carriers' carriers. After several years of stellar growth, carriers' carriers are now weathering a vicious industry shakeout that has raised doubts about the long-term viability of commercial wholesale telecommunications services and their providers.

After flat growth in 2002, US wholesale, private-line growth is set to reach USD19.7bn in 2003, a 27% increase year-over-year. An evolving customer base will mitigate operational risk and drive sales growth, but challenge "carrier-neutral" proposition.

In a recent Yankee Group Report The Carriers' Carrier Playbook Seth Libby, a senior analyst with the Wholesale Communications research practice, addresses these industry challenges, conceding that things will only get worse before they get better.

"Chapter 11 protection may provide a new lease on life for a few firms, but it is not a magic bullet for all that ails the industry," Libby says. "In fact, it will ultimately prolong industry turmoil and uncertainty."

He notes that carriers' carriers are intrinsic to the US telecommunications landscape and are here to stay. He likens their current problems to "the recurring 'boom and bust' business cycle challenge faced by any growing industry segment," and contends current problems detract attention from their overall value to the industry.

Carriers' carriers ensure truly competitive telephony and enable new retail service providers and services, Libby says. They also are aggressive technology innovators, for example, leading the introduction of next-generation transport offerings (including wavelengths), Gigabit Ethernet, and IP services, he adds.
www.yankeegroup.com

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