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Telecommunications equipment industry

U.S. Fiber-in-the-Loop Markets Set to Boom

Strategic Insights

— 1 min read

The U.S. market for optic fiber products in local telecommunications systems is poised for significant growth, driven by increasing demands for communications bandwidth to support applications such as local area network (LAN) interconnectivity and visual applications like high-resolution image transmission. By 2000, the market is expected to more than triple from $761 million in 1994 to nearly $2.5 billion, growing at a compound annual rate of 21 percent. This growth is being fueled by the converging goals of telephone and cable companies to offer a single high-bandwidth access line supporting future digital services.

Key Takeaways:

  • The U.S. market for optic fiber products in local telecommunications systems will more than triple from $761 million in 1994 to nearly $2.5 billion by 2000, growing at a 21 percent compound annual rate.
  • As of 1994, 76 percent of market revenues were derived from sales to dominant local exchange carriers (LECs), 17 percent to cable television companies, and 6 percent to emerging alternative local carriers (CAPs).
  • The market is being driven by increasing demands for communications bandwidth to support applications such as LAN interconnectivity, high-resolution image transmission, video-on-demand, and interactive video.
  • Telephone and cable companies are positioning themselves to poach on each other's traditional turf as the legal strictures preserving their respective monopolies erode.
  • The key technology trends will include increased product flexibility and modularity, increased interface capabilities to new technologies like video servers and ATM switches.
  • Frost & Sullivan projects that the fiber in the loop market will grow at a high rate, over 70 percent in 1995, though dropping significantly thereafter.

Statistics:

  • $761 million: The value of the U.S. market for optic fiber products in local telecommunications systems in 1994.
  • 100%: The increase in market value by 2000, reaching $2.5 billion.
  • 21%: The compound annual growth rate of the market from 1994 to 2000.
  • 76%: The percentage of market revenues derived from sales to dominant local exchange carriers (LECs) in 1994.
  • 17%: The percentage of market revenues derived from sales to cable television companies in 1994.
  • 6%: The percentage of market revenues derived from sales to emerging alternative local carriers (CAPs) in 1994.
  • 70%: The growth rate of the fiber in the loop market in 1995.

Sources:

  • "U.S. Fiber-In-The-Loop Markets," Frost & Sullivan, 1995.
  • "U.S. FIBER-IN-THE-LOOP MARKETS," Frost & Sullivan, 1994.
  • Frost & Sullivan is an international high-technology research firm.

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