U.S. wavelength services market to reach $2 billion by 2007

Jan. 1, 2002

As businesses and consumers increasingly demand high-speed, high-capacity Internet access for digital media downloads, local and remote data storage, and coast-to-coast office connectivity, markets for wavelength services are expected to see considerable growth. According to a new report from market researcher Frost & Sullivan (San Antonio, TX), the U.S. wavelength services market totaled $360 million in revenues in 2000, its first full year of availability. Revenues are expected to jump to almost $2 billion by 2007.

"For raw, high-capacity bandwidth at the most reasonable price, optical waves offer the best option for transporting data," says Frost & Sullivan analyst Rod Woodward. "Optical waves have emerged as cost-effective alternatives to dark fiber solutions."

The wavelength services market will continue to grow despite the loss of important customers for wholesale services, contends the report. Several competitive local-exchange carriers (CLECs) have declared bankruptcy or are limiting service expenditures, which could hinder the wavelength services client pool.

"Traditionally, CLECs have depended on interexchange carriers for long-distance transport and regional Bell operating companies for local voice and data services," explains Woodward. "Fewer CLECs could mean fewer potential customers for wavelength services."

To overcome this obstacle, some wavelength service providers are expanding their geographical reach and are teaming with other optical-networking service providers.

"Alliances are being developed be tween long-haul and metro providers," says Woodward. "By working with local metro providers, long-haul companies looking to establish footprints in new markets can employ metro wave and Gigabit Ethernet services to reach particular metro areas."

This ongoing research is part of the "U.S. Wholesale Services Market Service." For more information, visit www.frost.com.