Frost & Sullivan - New Demands for Capacity
Increase Competition Among Packet Data
Providers
MOUNTAIN VIEW, Calif., Oct. 4 /PRNewswire/ -- With companies looking to downsize their operations, finding more
cost-effective data solutions will be an increasingly important step in streamlining their networks. Public data services, such
as frame relay or ATM, represent viable alternatives to expensive private lines. These packet data technologies also supply
high-speed, large-bandwidth capacity that businesses are demanding for their applications.
According to New strategic research from Frost & Sullivan (www.frost.com), U.S. ATM, Frame Relay, SMDS and X.25
Public Data Service Markets, the total revenues generated by this market for the past year was $5.1 billion, which is a the
result of the demand for high-speed solutions and the growing maturity of the packet-switching technology.
``Because users can be exposed to a wide array of data access technologies, the ability to offer seamless, end-to-end
service is becoming critical to winning new customers,' says Frost & Sullivan Telecommunications Industry Analyst
Isabelle Gallo. ``Consequently, several service providers are actively pursuing strategic partnerships to expand their service
offerings. Alliances between service providers will also help to solidify global standards for packet switching, further
boosting the appeal of public data services among multinational corporate users.'
The U.S. ATM, frame relay, SMDS and X.25 public data services market is divided into four segments: The ATM public
data services, the frame relay public data services, the SMDS public data service and the X.25 public data services
markets.
In the past year there were hundreds of competitors in the U.S. ATM, frame relay, SMDS, and X.25 public data services
market. For the purposes of this research, approximately 42 companies were included: Interexchange Carriers, Incumbent
Local Exchange Carriers, and Competitive Local Exchange carriers: including cable service operators and utility
companies, and data service providers.
These companies have placed strong financial commitments in innovative service and technology deployment. For instance,
Sprint actively deploys frame relay switched virtual circuits (SVCs) services. Additionally, MCI WorldCom has deployed
voice over frame relay (VoFR).
With growing demand for seamless services, a number of interexchange carriers, such as AT&T and MCI WorldCom,
have entered the local market through strategic mergers and acquisitions. On the other hand, RBOCs have indicated strong
interests in entering the long distance services market. The completion of the merger between SBC Communications and
SNET is just beginning the long-haul battle. Moreover, the pending merger agreement between Bell Atlantic and GTE is
another example. Continued market consolidation will definitely alter the dynamics of the competitive structure. Eventually,
it will be difficult to identify distinctions between the interLATA and intraLATA carrier segments.
``Although an emerging technology such as ATM is well-designed for the delivery of voice, data and video, it is still
relatively new to business customers,' says Gallo. ``Many IT managers are not aware of the advantages of ATM or of
other packet technologies. As a result, network managers reluctant to risk network errors will hesitate in adopting these
solutions.'
Frost & Sullivan gives out Market Engineering awards to the U.S. ATM, Frame Relay, SMDS and X.25 public data
services industry to recognize companies that have worked hard to make a positive market contribution.
The 1999 Competitive Strategy Market Engineering Award was presented to Williams Communications for demonstrating
superior competitive strategy. This award recognizes the company that has been able to create and implement an effective
competitive strategy integrating the strategic elements of product, price, marketing and sales.
The 1999 Sales Strategy Market Engineering Award was presented to US West for realizing the potential importance of
retaining customers by utilizing an application that generates customer information, including their demographic profiles and
purchasing history.
Market participants include: Access One Inc., Aliant Communications, Ameritech Corporation, AT&T, Bell Atlantic
Corporation, BellSouth Corporation, Cable and Wireless, Inc., CBS Corporation, CCI Telecommunications, CIMCO
Communications Inc., Communication Management Services, Custom Network Solutions, DialLink Corporation, Electric
Lightwave, Inc., Equant Network Services, Executive Presence Inc., Frontier Corporation, General Electric Information
Services, Graphnet, GTE Corporation, IBM Global Services, IDS Long Distance, Infonet Services, Intermedia
Communications, InTouch Communications, IXC Communications, Inc., MCI WorldCom, Net2000 Communications,
Northwest Link, Phone Tech Communications Inc., Qwest Communications, Rascom, SBC Communications, Southern
New England Telephone (SNET), Sprint Corporation, TCC Communications, Telecarrier Services Inc., Telco
Communications Group, TeleMedia International, US WEST, Williams Communications, Inc. and WorldPort
Communications, Inc.
This telecommunications industry research has integrated the Market Engineering consulting philosophy into the entire
research process. Critical phases of this research included: Identification of industry challenges, market engineering
measurements, strategic recommendations, planning and market monitoring. All of the vital elements of this system help the
market participants navigate successfully through the telecommunications market.
Frost & Sullivan is an international marketing consulting and training company that monitors the telecommunications
industry for market trends, market measurements and strategies. This ongoing research is utilized to update a series of
online research publications such as the CTI & CPE Custom Subscription, and to support industry participants with
customized consulting needs.
Visit Frost & Sullivan's Web site at: frost.com .
U.S. ATM, Frame Relay, SMDS and X.25 Public Data Service Markets
Report: 2687-63 Date: August 1999 Price: $3450
SOURCE: Frost & Sullivan |
