CIR: Alcatel Leads DLC Market

CHARLOTTESVILLE, Va. -- CIR, a leading market research and consulting firm based here, has recently released a report on the U.S. Digital Loop Carrier market and claims that French telecommunications supplier Alcatel holds a 42 percent market share of the DLC market in the U.S. followed closely by U.S.-based Advanced Fibre Communications (AFC) at 38 percent. Ciena, by virtue of its acquisition of Catena Networks and Adtran were tied for third place with 5 percent shares.

Market Breakout

According to CIR, the DLC market is really three separate segments. The first, the Regional Bell Operating Companies (RBOCs), makes limited use of new features, and prefers traditional vendors but comprises the bulk of the market and it is here that Alcatel dominates. The second segment, the Independent Operating Companies, IOCs with over 500,000 lines, also have little need for advanced technology, and while they are far more open to buying directly from start-up equipment suppliers, it is in this segment that AFC dominates. The last group, IOCs with fewer than 500,000 lines, accounts for most of the country’s FTTH projects and while AFC again dominates this market, it is in this segment where start-ups are booking revenue.

The Good News and Not So Good News

The smaller IOCs have shown themselves to be open to embracing new technologies and working with smaller equipment vendors. These rural providers are often at the forefront of new trends in access networking and have provided opportunities for companies such as Calix, Catena and Optical Solutions. These carriers are also the basis for much of the “triple play” hype bandied about by both the press and equipment vendors. Yet, CIR notes that while there are over 1,300 of these carriers, the overwhelming majority of them provision fewer than 150,000 access lines each. The seven independents with more than 500,000 lines (Sprint LTD, Alltel, CenturyTel, Citizens, Cincinnati Bell, TDS, and Valor) provision 18 million lines in aggregate, more than twice as many as the other 1,300 IOCs combined.

Communications Industry Researchers Inc.