June 20, 2006 Boonton, NJ -- After years of contraction, the market for private-line services began growing again in 2006, signaling the start of a long-anticipated recovery in this $36 billion telecommunications segment, says a market analysis study from Insight Research. Private lines are point-to-point circuits leased by enterprises from telecommunications carriers in order to link enterprise sites to each other and to the Internet.
According to Insight's report, Private Line and Wavelength Services 2006-2011, continued growth in the segment will come as a result of the strong demand for private lines to support new telco video services and as a consequence of industry consolidations that have created price stability in the marketplace for the first time since 2000. In the study, Insight reports that from 2006 to 2011 the overall private line market will grow at a compound annual growth rate (CAGR) of 4.2 percent, reaching $44.1 billion in revenue by 2011.
"For the first time in several years, the prospects for the private-line industry are looking up," says Insight President Robert Rosenberg. "Private lines will have a role to play in the distribution of video content, and all the recent merger activity we've witnessed has led to a more stable pricing environment. Price cutting was endemic a few years ago, but now we are seeing pricing that looks sustainable," Rosenberg concluded.
Private Line and Wavelength Services 2006-2011 evaluates the total private line market and segments by local and long distance private line service revenue, wholesale and retail private line revenue, revenue by type of carrier, revenue by T1, T3, or OC-n circuit class, as well as the number of T1, T3, and OC-n private lines sold.