New Telecom Report by TFI: Broadband Equipment Lives for Local Exchange Carriers

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A new report by Technology Futures, Inc. (TFI) forecasts continued increases in broadband speeds, hastening the obsolescence of broadband investment. The report, Broadband Equipment Lives for Local Exchange Carriers, by Lawrence K. Vanston, Ph.D. (President, TFI), provides recommendations for depreciation lives for broadband equipment such as video set-top boxes, headend equipment and broadband loop electronics, including DSLAMs, DSL modems and BPON equipment.

A new report by Technology Futures, Inc. (TFI) forecasts continued increases in broadband speeds, hastening the obsolescence of broadband investment. The report, Broadband Equipment Lives for Local Exchange Carriers, by Lawrence K. Vanston, Ph.D. (President, TFI), provides recommendations for depreciation lives for broadband equipment such as video set-top boxes, headend equipment and broadband loop electronics, including DSLAMs, DSL modems and BPON equipment.

Discussing the report, author Dr. Vanston states, "The business of incumbent local exchange carriers (ILECs) is transitioning from primarily voice to primarily high-speed broadband and video. This means that equipment devoted to delivering broadband and video will come to dominate the useful investment of ILECs. Much of this equipment is significantly different than traditional narrowband equipment and, thus, may have different depreciation lives."

The research was sponsored by the Telecommunication Technology Forecasting Group, a consortium of telephone companies comprised of AT&T, Bell Canada, Qwest and Verizon.

A Sampling of Key Findings from the Report:

  •      The required data rate for broadband is increasing rapidly, causing rapid obsolescence of broadband equipment. By 2010, about 75% of U.S. households will have broadband service, and over 15% of households will subscribe to very high-speed broadband (at least 24 Mb/s). (See attached graph: "Broadband Households by Nominal Date Rate.")
  •      New video services such as IP video, Internet television, and HDTV are rapidly being adopted and improved. This will cause significant obsolescence of broadband equipment.
  •      The broadband, voice, and video networks are moving toward the IP paradigm, meaning less expensive equipment, rapid obsolescence and marked volatility in applications, services and network requirements.
  •      In each of the broadband architectures currently being deployed, significant amounts of active electronics are exposed to the elements (either on the side of a house or at a remote node) or to household activity. This will reduce depreciation lives.

The study recommends Average Remaining Lives (ARLs) and a P-Life range for each of the following equipment categories:

  •      Standard DSL Equipment: DSLAMs & DSL Modems
  •      VDSL Equipment: VDSLAMs & VDSL Modems
  •      BPON Equipment: OLTs & ONTs
  •      Broadband Switching & Video Equipment
  •      Set-top Boxes

This report will be of interest to:    

  •      Incumbent local exchange carriers
  •      Competitive LECs
  •      Cable TV companies
  •      Internet service providers
  •      Telecom equipment manufacturers
  •      Regulatory personnel
  •      Depreciation professionals
  •      Property tax professionals.

Report details, a table of contents, and list of figures is available at http://www.tfi.com/pubs/r/r02007_bellec.html.

We would be pleased to have this report reviewed by your publication and/or be cited for articles examining the subject matter. Dr. Vanston would also be glad to be interviewed and quoted for articles relating to the subject matter.    

Author Lawrence K. Vanston, Ph.D., is an internationally- recognized authority in the use of technology forecasting in the telecom industry. His research reports and forecasts are used and referenced extensively worldwide. His forecasting track-record (see attached sample) is legend. The September 21, 1998 issue of "The Wall Street Journal" featured an in-depth interview entitled "Consultant's Call: Lawrence Vanston Makes Some Pretty Bold Predictions for the Future of Telecommunications. He Has Been Right Before." The predictions therein have come true as well. Dr. Vanston's corporate bio is attached.

For 29 years, TFI has helped organizations plan for the future by offering outstanding technology forecasting, strategic planning, trend analysis, and strategic market research services and publications in high-technology and telecom technologies. Drawing on proven, quantifiable forecasting methods and strategic applications, we combine the vision of the futurist with the down-to- earth judgment of the technologist. Let us be "Your Bridge to the Future."    

We are always happy to comment on the subjects of technology and telecom trends. For a list of many of the citations by our staff members, please see TFI News at http://www.tfi.com/pressroom/tfinews.html.    

PRESS CONTACT: Please contact Ms. Carrie Vanston at (800) TEK-FUTR, (512) 258-8898, or by e-mail with questions about the report and/or to arrange an interview with Dr. Vanston or other technology and telecom experts at TFI.    

PURCHASING CONTACT FOR YOUR READERS: Report details and ordering information are available at http://www.tfi.com/pubs/r/r02007_bellec.html. Readers interested in purchasing a copy may also contact Debra Robison, Technology Futures, Inc. at (800) TEK-FUTR or (512) 258-8898, fax (512) 258-0087, or by e-mail. The report is $1,995.    

Thank you for your attention.

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