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Report: Frame Relay Forges On

Rumors of Frame Relay's demise have been greatly exaggerated. Indeed, it looks as if Frame Relay services worldwide are set to grow at an annual rate of about 10 percent for the next five years, according to a report from Vertical Systems Group.

The firm says Frame Relay service revenues grew 14.4 percent to a total of $14.5 billion worldwide last year, and will grow about 12.3 percent to $16.2 billion in 2003. While the annual growth rate will decline a bit over the next few years, growth will still be substantial, expecially in the U.S., where the bulk of sales are made. In 2002, for instance, domestic sales were nearly 60 percent of the worldwide total.

The telecom downturn may be aiding Frame Relay. As companies add faster ports, and U.S. companies expand outside North America, the service is seen as an easy-to-digest add-on to existing services, delivering bandwidth and protocol flexibility without requiring a commitment to something new. Tight budgets make that a more attractive choice than IP VPNs (virtual private networks), which call for architectural changes on the part of the carrier and its customer (see Crossing Over to VPNs and Readers Take Shots at IP VPNs ).

The U.S. Frame Relay market also is a key opportunity for RBOCs, Vertical Systems says in its report, which is included in its ENS 2003 online research service. As they expand nationwide via FCC Section 271 approvals, the former Bells could take a big chunk of business that now goes to IXCs and others.

How much of a chunk? By Vertical Systems' calculations, the RBOCs could take up to $2 billion of U.S. market over the next three years. Presently, Vertical Systems estimates that market to be worth roughly $9 billion.

Frame Relay's hardiness may surprise some naysayers, who've foretold its extinction for years now -- only to be proven wrong. "Frame Relay's been an interim technology for ten years," quips Erin Dunne, director of research services at Vertical Systems. "It was supposed to be killed by ATM, and that didn't happen; then, by IP VPNs, and that hasn't happened... For the foreseeable future, it fits a market need. The price is right, the speed is right, the learning curve's right."

— Mary Jander, Senior Editor, Light Reading

digerato 12/5/2012 | 12:07:48 AM
re: Report: Frame Relay Forges On How do they explain this forecast?

Sprint was just saying the other day (as reported in Network World) that it is raising low-speed frame relay pricing by nearly 50%. Do they think enterprises are just going to roll over and come up with the extra cash? When everyone's WAN budget is down, don't they think raising FR prices is going to make IP VPNs way more attractive? Especially as VPN gear is now a 40% larger market than a year ago at $700m/quarter (according to Infonetics). Do they really think that is going to have zero effect on Frame Relay?

Digerato
PacketPadre 12/5/2012 | 12:07:42 AM
re: Report: Frame Relay Forges On Sprint and others are raising the low speed prices reportedly to cover increased support expenses and possibly to coerce customers into changing services. But from what I understand, most new frame and VPN ports are not low speed. They're T1 and fractional T1. So, it's not clear how much bearing the low speed price increases will have on either the frame or the VPN market in the next couple years.

digerato 12/5/2012 | 12:07:40 AM
re: Report: Frame Relay Forges On "But from what I understand, most new frame and VPN ports are not low speed. They're T1 and fractional T1. "

That is the very defintion of low speed. Let's do the math. 256K frame relay from New York to Miami is about $1000/month. Business DSL in Miami can't be more than $100/month, and would give you 1.5M downstream and 384K upstream. Now, add, say, $1000 for IP VPN gear at the remote site, and $1000 for a router VPN upgrade at the central site. I break even in 3 months, and start saving money in the 4th month.

Digerato
BobbyMax 12/5/2012 | 12:07:39 AM
re: Report: Frame Relay Forges On Frame Relay Services have neen growing both domestically and internationaly. Some of the popular services like IP VPN can be provided over Frame Relay.
kampar 12/5/2012 | 12:07:39 AM
re: Report: Frame Relay Forges On
Booby:

Thank you for clarifying this point; your insight humbles us all. I, for one (and I think I can say that I truly speak for all of us here) feel incredibly enlightened and can now sleep easy at night knowing, as I now do, that the future of Frame Relay and attendant IP VPN services is most assuredly secure.

I do, however, have another question ... are you able to comment (because this is a question that has puzzled mankind for many centuries) on why no-one ever sees baby pigeons, even though our cities are full of grown birds? They must come from somewhere .....

kampar

-----------------------

Frame Relay Services have neen growing both domestically and internationaly. Some of the popular services like IP VPN can be provided over Frame Relay.
gea 12/5/2012 | 12:07:38 AM
re: Report: Frame Relay Forges On BobbyMax:

All your base are belong to us.
PacketPadre 12/5/2012 | 12:07:31 AM
re: Report: Frame Relay Forges On "That [T1] is the very definition of low speed."

It may be your definition, but it's not the definition of what Sprint and other providers are raising rates on. They raised rates up to 50% on 56kbps connections, not on T1.

As for your example, thanks for doing "the math" for me and the thousands of enterprises currently using frame relay. We'll all rush out now and swap all our $1000/mo connections for $100/mo connections. Why didn't WE think of that?
crapshooter 12/5/2012 | 12:07:30 AM
re: Report: Frame Relay Forges On I do, however, have another question ... are you able to comment (because this is a question that has puzzled mankind for many centuries) on why no-one ever sees baby pigeons, even though our cities are full of grown birds? They must come from somewhere .....

>>>>>>>>>>>>>>>>>

The evil "Dr" Bush and the Indian VCs have used waepons of mass distruktion to wipe out the inosent baby pigones. It will take aproxmatly 4-6 yrs for the pigones to return to normal size. The US is forcing its demcracy on pigones and all the birds of the entire worlds. Dont watch CNN ABC or the other corrupted news media for infromation on these and other birds. The US media tells untrue lies ahtat are not true.

BM

billy_fold 12/5/2012 | 12:07:12 AM
re: Report: Frame Relay Forges On 75 percent of frame relay ports are 56Kbps.

-billy
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