Broadband digital loop carrier equipment market declining

A new market share study released by telecom market research firm RHK Inc. shows the North American broadband digital loop carrier market (BB-DLC) declined 35 percent in the first half of 2001. In the first six months of this year $703 million in revenue was generated compared to $1.1 billion for the 1H00. RHK expects the BB-DLC market to continue to fall due to cutbacks in service provider capital expenditures, and the lack of resolution by the FCC on DSL deployment.

"Service providers build out their access networks using BB-DLCs primarily for basic dial-tone applications," comments Barry Moon, Senior Analyst Optical Access at RHK. "However, regulatory issues associated with DLC based DSL and apparent capital expenditure reductions by the major carriers are playing a big role in the decline of DLC market revenue."

Overall, declining revenue did not hindered Alcatel from securing, for the second year, the leading position with a 40 percent market share. Following Alcatel, AFC captured a 16 percent share, a significant improvement from its previous fourth place position. Nortel tied with Lucent for third place with 13 percent, a position acquired before Nortel sold its DLC business to Zhone Technologies.

The report explains that DLC product purchases are used primarily for new line growth, access network refurbishment, replacement of older DLC systems, and overbuilds to provide broadband capability. Service providers have reduced capital expenditures and thus have pushed out many non-critical projects into 2002 or later. Areas most affected are access network refurbishment and DLC replacement.

"Maintenance can only be deferred so long," states Moon. "We expect to see more positive growth in DLC sales once a general recovery in the telecom sector occurs."

RHK's BB-DLC Market Share Report, is part of RHK's Optical Access: North America Service, which explores the technologies and market forces and emerging factors that drive the access network market.

About RHK:

RHK Inc. is a global industry market research and consulting firm specializing in the analysis of advanced technologies for the public telecommunications network. RHK's areas of expertise include: optical access, broadband access, and new voice infrastructure; switching and routing; optical transport and undersea; optical components and communications semiconductors; operations support systems; and newly emerging technologies. For more information, visit www.rhk.com.