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To: Greg h2o who wrote (19728)	3/23/2000 9:27:00 AM
From: Greg h2o	Respond to of 42804

Fiber Optic Spending Goes Up, Up And Away! Spending in the fiber optics market has more than tripled from $4.1 billion in 1990 to $14.6 billion in 1999, reports the 2000 MultiMedia Telecommunications Market Review and Forecast, a joint publication produced by the Arlington, Va.-based Telecommunications Industry Association and the MultiMedia Telecommunications Association. "The phenomenal increase in fiber optics spending reflects the growing demand for access to broadband service," says MMTA president Mary Bradshaw. "We'll see the fiber market continue to grow to accommodate the increasing reliance worldwide on the Internet as a business and communications tool." Other major findings in the Market Review and Forecast regarding the fiber optic market include: * Interexchange carriers increased their fiber deployment by 85.5 percent to 4.5 million miles in 1999, which is 15 times the installation level achieved in 1995. The significant increase is the result of the huge demand for Internet access combined with the entry of IXCs into local service markets, as well as the emergence of a number of new carriers that are developing high- capacity networks. * Cable companies' installation of fiber grew 12.3 percent in 1999 compared with 10.3 percent in 1998. Cable companies account for the installation of 2.6 million fiber miles in 1999, approximately 22 percent of total installation. * The biggest increase in the deployment of fiber by the local exchange carriers is projected to be in the residential access area, with an increase from 322,000 miles in 1999 to 2.2 million miles in 2003, exhibiting a compound annual growth rate of more than 61 percent. * Competitive access providers increased fiber deployment by 1.2 million fiber miles in 1998 for a total of 3 million fiber miles, which represents a 66 percent increase over 1997. Fiber deployment levels of the CAPs are much lower than those of the LECs, but are growing at a much faster rate, associated with overall growth in the competitive local market. The top three CAPs in terms of fiber mileage -- Teleport, MFS and McLeod USA [MCLD] -- accounted for 1.3 million fiber miles, or more than 40 percent of the total for that category. * Spending on fiber-optics equipment is projected to rise from $12.2 billion in 1999 to $28 billion in 2003, a compound annual growth rate of 23.1 percent. The report had a few cautionary notes about fiber growth, stating that the major disadvantage of deploying fiber optics is the cost, both of the cable itself and of the labor involved in the installation. The labor costs are relatively high, as the connections must be made perfectly to prevent signal loss. But the cost of the cabling will fall as economies of scale are generated through increased deployment. The introduction of plastic optical fiber, as opposed to glass, also will reduce costs. Because of the high initial costs of fiber, carriers usually deploy far more cable than is necessary. AT&T [T] has approximately 50 percent of its fiber miles lighted, while Sprint has 85 percent lighted. By contrast, the newer competitors, such as Qwest [Q], Williams [WMB] and Frontier are still in the process of deploying their networks and have less than 10 percent of their fiber lit. A similar pattern is evident among the local phone companies, with Bell Atlantic [BEL] and GTE [GTE] using about half of their fiber, while Ameritech uses only about 15 percent. In addition to the segment-by-segment statistical breakdown and analysis of the U.S. telecommunications industry (including growth areas in international markets), the 2000 Market Review and Forecast includes a discussion of applications/product migration from the enterprise to network services; data for spending on professional services in key international markets; distribution of call-center spending by application; and the market outlook for unified messaging. The report costs $495 for MMTA or TIA members, $995 for non-members. (Mary Bradshaw, MMTA, 703/907-7700, mmta.org.) Fiber Optics Spending Year $ (Billions) 1990 4.1 1991 4.7 1992 5.4 1993 6.1 1994 6.8 1995 8.0 1996 9.3 1997 11.1 1998 12.1 1999 14.6 2000 17.6 2001 20.7 2002 25.1 2003 30.2 (Found on pg. 67 of 2000 MultiMedia Telcommunications Market Review and Forecast) Sources: KMI Corp., MMTA Installed Fiber Miles (in millions) Year ILEC CLEC 1993 7.5 0.2 1994 9.0 0.4 1995 10.7 0.6 1996 12.3 1.3 1997 14.0 1.8 1998 16.1 3.1 (Found on pg. 36 of 2000 MultiMedia Telcommunications Market Review and Forecast) Source: FCC Growth Of Installed Fiber Miles (in percent) Year ILEC CLEC 1993 32 88 1994 20 72 1995 19 62 1996 15 104 1997 14 39 1998 15 72 (Found on pg. 36 of 2000 MultiMedia Telcommunications Market Review and Forecast) Source: FCC