Infonetics Looks at Tier 2

SAN JOSE, Calif. -- U.S. and Canadian Tier 2 service provider expenditures grow over 170%, from $2.1 billion to $5.7 billion between 2001 and 2005, according to a market research study released today by Infonetics Research, "The Tier 2 Service Provider Opportunity, US/Canada 2001." "Many Tier 2 carriers in the U.S. and Canada failed over the last 12 months, leaving about 75," said Infonetics Research analyst Kevin Mitchell. "The free-wheeling days are over -- at least until the next cycle -- and all eyes are focused on revenue and profitability. The Tier 2 service providers are under pressure to reduce capital expenditures by using their equipment more efficiently, and by buying new products only where the operational cost savings are clear, such as with next gen voice equipment and intelligent optical hardware." MPLS is of interest to many of the carriers interviewed in this study, as they look to use it as a traffic engineering tool and as a foundation for advanced services, such as VPNs. For QoS and traffic engineering: -- 70% of respondents will use MPLS in 2002, up from 30% in 2001
-- 45% of respondents will use Diff-Serv in 2002, up from 25%
-- 45% of respondents will use ATM both in 2001 and 2002 Infonetics Research Inc.