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Strategic Data Services for US Businesses:  IP VPNs, Ethernet, Cloud, and Hosting Services, 2014-2019



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Table of Contents

Market Segmentation

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With many voice and legacy data services declining, advanced strategic services represent the highest growth areas for telecom services targeted to US businesses. Advanced strategic services include business broadband, IP-VPNs (Internet protocol virtual private networks), Ethernet, IP applications, and hosting services. Wireline enabled services such as broadband Internet access, IP transaction services, and Ethernet connectivity have become the foundation for many entertainment and business services— and the continued growth coming from wireless data, cloud, and IPTV (Internet protocol television) services will extend the life of these services well into the next decade. This report provides detailed analysis of business wireline data services, along with segmentation by business size (S, M, L) and wholesale vs. retail. The report includes detailed forecasts of data services revenues, circuits, packets, and pricing, with projections of migration patterns from legacy data services to advanced strategic services required by B2B and B2C applications..

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    Report Excerpt

    1.1       Telecommunications Industry Economic Conditions

    The past year has exhibited modest growth in most markets, significant economic slowdown in the hyper-growth rates enjoyed over the past decade in advancing economies, and renewed political and economic threats in some isolated countries.  The US, Japan, and most other western economies have started to accelerate from lower growth levels of the past two years, while China and other emerging market economies in Asia and Latin America have slowed from the double-digit growth rates of the past decade.  While consumer and infrastructure spending is rising in most regions, other regions, such as Middle East, North Africa, Afghanistan, and Pakistan, and  sub-Saharan Africa, remain in a weak investment climate.  In the US, for the first half of 2013, GDP grew at an annual rate of 1.25 percent, while inflation averaged 1.8 percent.  The US is facing a turning point in monetary policy as the Federal Reserve is likely to taper economic stimulus plans in the coming year.

    Looking forward, according to the most recent World Economic Organization (WEO) forecast, in October 2013, from 2014 to 2019 global GDP annual growth will range from 2.7 percent to 3.7 percent.  During the same period US GDP will remain below 3.1 percent, while Europe, Middle East and Africa GDP is unlikely to exceed 2.6 percent in any year.  The growth regions of Asia and Latin America will raise the global average higher, with GDP growth projected at highs of 5.2 percent and 3.7 percent, respectively.

    These economic factors are important predictors of telecommunications spending, as macro-economic variables, including gross domestic product (GDP) growth, population changes, employment, the number of business establishments, and ............... 

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    Market Segmentation


    Business Broadband Subs
    Business Services Revenues
    Business Data Services Revenues
        Dedicated IP
        Private Line
        Frame Relay
        Advanced Strategic
    Advanced Strategic Services Revenues by Service
        IP VPN
        IP Application
    IP VPN Services Revenues by Access Speed
        >=1 Gbs
        100 Mbps - 1 Gbps
        10 Mbps - 100 Mbps
        <10 Mbps port
    Ethernet Services Revenues by Access Speed
        >=1 Gbs
        100 Mbps - 1 Gbps
        10 Mbps - 100 Mbps
        <10 Mbps port
    IP Application Services Revenues
        Infrastructure-as-a-Service (IaaS)
        Platform-as-a-Service (PaaS)
        Software-as-a-Service (SaaS)
    Hosting Services Revenues
    IP VPN Ports by Access Speed
        >=1 Gbs
        100 Mbps - 1 Gbps
        10 Mbps - 100 Mbps
    Ethernet Ports
        >=1 Gbs
        100 Mbps - 1 Gbps
        10 Mbps - 100 Mbps
        <10 Mbps port

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    Table of Contents


    Chapter I
    1.1  Telecommunications Industry Economic Conditions
           1.1.1  Regional Economies and Communications Patterns
    1.2  Report Structure

    Chapter II
    2.1   Global Markets
            2.1.1  Regional Economies and Communications Patterns
            2.1.2  Global Telecommunications Spending
            2.1.3  North American Telecommunications Spending
            2.1.4  European, Middle East, and Africa Telecommunications Spending
            2.1.5  Asia-Pacific Telecommunications Spending
            2.1.6  Latin America-Caribbean Telecommunications Spending
    2.2   Wireline Market Trends
            2.2.1  Wireline Revenues
            2.2.2  Wireline Demand
    2.3   Wireless Market Trends
            2.3.1  Wireless Revenues
            2.3.2  Wireless Demand
            2.3.3  Wireless Technology

    Chapter III
    3.1   Definitions of Network Topology
            3.1.1  End-Users
            3.1.2  Access Networks
            3.1.3  Metro Networks
            3.1.4  Core Networks
    3.2   Transmission Improvements
    3.3   Circuit Switching vs. Packet Switching Overview
    3.4   The Public Switched Telephone Network
            3.4.1  Evolution of the PSTN
            3.4.2  Central Offices
    3.5   Data Networks and VoIP
            3.5.1  Broadband Switches
            3.5.2  Data Core Networks
            3.5.3  Data Metro Networks
            3.5.4  Data Access Networks
            3.5.5  Signaling and Support Structures for Data Networks
            3.5.6  Voice over Internet Protocol
            3.5.7  VoIP as Transport
            3.5.8  VoIP Operational Advantage
            3.5.9  VoIP as Value-Added Stage
    3.6   Carrier Ethernet Networks
            3.6.1  E-line
            3.6.2 E-LAN
            3.6.3 Other Typologies: Dedicated vs. Switched
            3.6.4 Carrier Ethernet Market Forecast
    3.7   The Next Generation Network
            3.7.1  Gateways
            3.7.2  Softswitches
            3.7.3  Service Delivery Platforms
            3.7.4  IP Multimedia Subsystems
    3.8   Optical Networking
            3.8.1  Baseline Optical Transport Technologies
            3.8.2  Optical Transport Technology Overview
            3.8.3  Current Gaps in Baseline Transport Technologies
            3.8.4  The Hybrid Approach to Optical Transport Technologies
    3.9   Capital Expenditures Forecast

    Chapter IV
    4.1   Narrowband: The Decline of US Landlines
    4.2   Broadband Access Networks
            4.2.1  Broadband Access Forecasts
    4.3  Access Network Technology Options
           4.3.1  DSL
           4.3.2  Cable
           4.3.3  Bonded Copper
           4.3.4  Fiber
           4.3.5  Wireless
           4.3.6  Fixed Mobile Convergence
           4.3.7  WiFi
           4.3.8  WiMAX

    Chapter V
    5.1   Operations Support Systems Overview
    5.2   Operations Support Applications
    5.3   Business Operations Support
            5.3.1  Billing
            5.3.2  Customer Care
            5.3.3  Business Management
    5.4   Network Operations Support
            5.4.1  Engineering and Planning
            5.4.2  Provisioning 
            5.4.3  Trouble Repair
            5.4.4  Network Management
            5.4.5  Workforce Management
    5.5   OSS Market Revenue Estimates
            5.5.1  Impacts of Equipment Markets on OSSes
    5.6   The Impacts of Open Source Software on OSSes
            5.6.1  The Question of Intellectual Property
            5.6.2  Open Source Software Benefits
            5.6.3  Open Source Software Project Challenges
            5.6.4  Open Source Support: The Commercial License

    Chapter VI
    6.1   IP-Based Application Services
            6.1.1 Introduction & Definitions
            6.1.2 VoIP as a Non-Starter
            6.1.3 Key IP Service Trends
    6.2   The Future of IP Services: Web 2.0
            6.2.1 Web 2.0 and Mashups
            6.2.2 Web 2.0 & the Carriers
            6.2.3 Web 2.0 Market Forecast
    6.3   The Future of IP Services: Mashups
            6.3.1 What We Found
            6.3.2 What Role for Telcos in Mashups?
            6.3.3 Mashup Market Forecast
    6.4   Mobile Phones’ Impacts on the Financial Sector
            6.4.1 Core Banking
            6.4.2  User Financial Applications for Mobile Phones
            6.4.3  Financial Services Segment Forecast
    6.5   Telecommunications Role in Improving the Environment
            6.5.1  Modeling the Benefits of Green
    6.6   The Future of Telecommunications
            6.6.1  IP Changes Everything
            6.6.2  Convergence Cuts Both Ways
            6.6.3  The Road Ahead for Operators
            6.6.4  The Road Ahead for OEMs

    Chapter VII
    7.1  The Classification of Businesses by Size
           7.1.1 Distribution of Business by Size
           7.1.2 The Business Line Market Methodology and Analysis
           7.1.3 The Business Line Market in Small Enterprises
    7.2   Private Lines
            7.2.1 Evolution in the Private Line Services Market
            7.2.2 Circuit Types
            7.2.3 SONET, IP and Private Lines
            7.2.4 Private Line Circuit Layout
            7.2.5 Redundancy & Restoration
            7.2.6 Private Line Alternatives
            7.2.7 Private Line Services Market Forecast
    7.3   Managed Services & the Enterprise
            7.3.1 Why Managed Services?
            7.3.2  Industry Structure
            7.3.3  Managed Service Industry Forecast
    7.4   Healthcare as a Fast Growing Vertical Industry
            7.4.1  Healthcare Industry Structure Ready for Change
            7.4.2  Market Estimate of Healthcare Telecom Spending
    7.5   The Mobile Workforce and Enterprise Applications
            7.5.1  The Key Enterprise Mobility Applications
            7.5.2  Mobile Enterprise Market Forecasts
    7.6   The CATV MSOs’ Push into the Enterprise
            7.6.1  CATV Industry
            7.6.2  MSO Commercial Services: Big Opportunity, Major Challenges
            7.6.3  Deploying Commercial Services
            7.6.4  Market Forecast Summary
    7.7   Hosted Voice Services in the Small Enterprise
            7.7.1  The Small Business Market for Hosted PBX/VoIP Services
    7.8   Advanced Strategic Services: The Growth Engine for Wireline Business Services
            7.8.1  Advanced Strategic Services
            7.8.2  Importance of Strategic Services
            7.8.3  Market Forecast Summary

    Table of Figures

    Chapter I
    I-1  Global Carrier Revenue by Region, 2014-2019
    I-2  Global Wireline and Wireless Revenues, 2014-2019
    I-3  US Wireline and Wireless Revenues, 2014-2019

    Chapter II
    II-1  US LTE Coverage, 2010-2014

    Chapter III
    III-1  Public Communication Network Architecture
    III-2  SONET Ring Configuration
    III-3  Hierarchy of Broadband Switch Functions
    III-4  Typical National Data Core Network
    III-5   E-Line Point-to-Point Service Type
    III-6   E-LAN Multipoint-to-Multipoint Service Type
    III-7   Softswitch Architecture Diagram
    III-8   Circuit vs. Packet Switching of Internet Traffic
    III-9   SDP Service Provider Network Architecture
    III-10 STS-1 Frame Structure
    III-11 STM-1 Frame Structure
    III-12 Four-Channel DWDM System
    III-13 Schematic of an MPLS Network
    III-14 Label Header Structure
    III-15 MPLS over WDM Core

    Chapter IV
    IV-1   US Voice Services Penetration of Households, 2014-2019
    IV-2   Worldwide Broadband Subscribers, 2014-2019
    IV-3   HFC Architecture Providing Video and Voice Services
    IV-4   Typical Backhaul Configuration
    IV-5   Typical DSLAM Backhaul Application
    IV-6   Global Wireless Subscribers, 2014-2019
    IV-7   US Wireless Subscribers, 1997-2017
    IV-8   US Wireless Average Minutes Per Local Call, 2008-2010
    IV-9   Revenue Split between Non-Voice & Voice Wireless Revenue
    IV-10 Phone Usage Habits, Women versus Men, January 2011
    IV-11 Monthly Voice and Text Usage by Age, January 2011
    IV-12 Common Fixed Mobile Convergence Scenarios

    Chapter V
    V-1   Operations Support Systems Dataflow
    V-2   Business Operations Systems Dataflow
    V-3   Telecom Management Net. Functional Architecture
    V-4   Total Worldwide OSS Sales Revenue, 2011-2016
    V-5   Operator Capex in Selected Geographies, 2009-2017

    Chapter VI
    VI-1   Web 2.0 Business Models
    VI-2   Global Opportunities for Web 2.0 Applied to Telecom
    VI-3   Logical Schematic of a Commercial Mashup
    VI-4   Global Mashup Revenue Opportunity for Telcos, 2010-2015
    VI-5   Taxonomy of Revenue Opportunities in the Financial Domains
    VI-6   Global Financial Services & Equipment Revenue
    VI-7   Telecom Networking Before and After IP
    VI-8   Operator Capex in Selected Geographies

    Chapter VII
    VII-1   Capacities of 64 Kbit/s, T1, and T3 Circuits
    VII-2   Typical Layout for a Full Circuit
    VII-3   ISDN Switched Backup
    VII-4   SONET Rings
    VII-5   Fiber-to-Fiber Redundancy
    VII-6   Cable-to-Cable Physical Redundancy (Diverse Cable Redundancy)
    VII-7   Total Private Line Revenue, 2013-2017
    VII-8   Global Managed Services Market by Region, 2012-2017
    VII-9   Total US Healthcare Telecom Service Revenues, 2012-2017
    VII-10 Global Market for Enterprise Mobility Solutions, 2011-2016
    VII-11 US Telecommunications Revenue by Market, 2012
    VII-12 US MSO Commercial Service Revenues, 2013-2018
    VII-13 Rev. Proj for Hosted PBX/VoIP Service in the Small Bus. Segment
    VII-14 Advanced Strategic Services Framework
    VII-15 Telecommunications Value Chain
    VII-16 US Advanced Strategic Services Revenues Summary

    Table of Tables

    Chapter II
    II-1   Global Carrier Revenue by Region, 2014-2019
    II-2   US Carrier Revenue, 2014-2019
    II-3   Global Wireline and Wireless Revenues, 2014-2019
    II-4   NA Wireline and Wireless Revenues, 2014-2019
    II-5  US Wireline and Wireless Revenues, 2014-2019
    II-6   EMEA Wireline and Wireless Revenues, 2014-2019
    II-7   AP Wireline and Wireless Revenues, 2014-2019
    II-8   LA Wireline and Wireless Revenues, 2014-2019
    II-9   Global Wireline Revenue by Region, 2014-2019
    II-10 Access Revenue by Region, 2014-2019
    II-11 US Access Revenue, 2014-2019
    II-12 Broadband Revenue by Region, 2014-2019
    II-13 US Broadband Revenue, 2014-2019
    II-14 Access Lines by Region, 2014-2019
    II-15 US Access Lines, 2014-2019
    II-16 Broadband Subs by Region, 2014-2019
    II-17 US Broadband Subs, 2014-2019
    II-18 Global Wireless Revenue by Region, 2014-2019
    II-19 Wireless Subs by Region, 2014-2019
    II-20 NA Wireless Subscriber Penetration, 2014-2019
    II-21 US Wireless Subscriber Penetration, 2014-2019
    II-22 EMEA Wireless Subscriber Penetration, 2014-2019
    II-23 AP Wireless Subscriber Penetration, 2014-2019
    II-24 LA Wireless Subscriber Penetration, 2014-2019
    II-25 Wireless Data Technologies Comparison 32
    II-26 US Wireless Carriers 4G LTE Coverage as of October 2013

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