Surging Demand for Data Services Among SMBs Drives the CLECs Market, According to New Report by Global Industry Analysts, Inc.

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GIA announces the release of a comprehensive US market report on Competitive Local Exchange Carriers (CLECs). The US market for Competitive Local Exchange Carriers (CLECs) is projected to register 156.94 million service connections by 2018, primarily driven by CLECs’ migration from traditional TDM network to a nomadic, IP-based infrastructure in response to surging demand for data services among small and medium-sized businesses (SMBs) and rise in Network Computing.

Competitive Local Exchange Carriers (CLECs): A US Market Report

Follow us on LinkedIn – Privatization of the telecommunication industry initiated during the mid-1990s and the ensuing freeplay of competitive forces brought competitive local exchange carriers (CLECs) into the spotlight. Years of liberalization and steady privatization with the goal of promoting competition, reducing regulation, encouraging innovation and securing lower prices and higher quality services for consumers, has brought in high levels of improvement in the productive efficiency of the telecom sector.

Today, CLECs have evolved from being just alternative access providers into a new breed of players capable of providing full end-to-end services. Over the years, CLECs have collectively cornered a sizable share of the market pie. Of late, competition from multiple quarters i.e. ILECs, other CLECs, cable companies, and VoIP service providers, has forced CLECs to invest in resources to evolve their networks to the IP platform. Migration from traditional TDM network to a nomadic, IP-based infrastructure provides ample opportunities. For instance, CLECs supported by higher bandwidth capabilities can now support applications ranging from e-mail to cloud computing. The new generation of CLECs, dubbed as CLEC 2.0, provide in addition to raw bandwidth, high speed connectivity and applications for businesses and consumers, such as, voice (VoIP), security (Firewall & VPN), and video conferencing. Shifting customer preferences and greater reliance on and adoption of cloud-based services, e-commerce, and video conferencing, are key factors for triggering increased CLEC investments on high bandwidth core network technologies, given that bandwidth availability and quality in terms of parameters like latency and jitter, are critical for supporting these applications.

Surging demand for data services and associated technologies from small and medium-sized businesses makes this segment an attractive target for competitive local exchange carriers (CLECs). CLECs, which have traditionally focused on provision of value-added services and adopted a customer-centric approach, are expected to capitalize on the burgeoning opportunities. Although holding on tight to their residential “sweet spot” clientele, CLECs are also hot on the heels of SMBs. Strong demand from large and small businesses alike for integrated broadband services is encouraging CLECs to target both SMBs and large companies.

With over 57% of the enterprise market opening up as a potential avenue for pushing out bundled services comprising of local, long distance and internet access, its opportunities galore in this space. With superior fiber infrastructure in place and the accompanying ability to target opportunities in cloud-based data center services, CLECs are optimally positioned to tap into the SMB market. In this regard, CLECs are expected to expand their portfolio of mobile wireless services, which will be offered in close reseller partnerships with the well-established wireless operators. In association with wireless operators like Sprint and Verizon Wireless, opportunistic CLECs like CBeyond, Lightyear Solutions, and TelePacific are already offering wireless mobile services as part of their SMB bundled services. Mutually beneficial and synergistic alliances with wireless operators allow wireline-based CLECs to differentiate SMB service packages in the marketplace by including wireless services. CLECs also stand to benefit from the fact that SMBs typically lack the financial muscle required for handling multiple wireless and wireline contracts and therefore tend to prefer CLECs capable of providing low cost and simplified nationwide voice and data access.

The paradigm shift to network-centric (NC) computing by large companies has paved the way for increased usage of wireless and broadband services thereby necessitating CLECs to go data-centric. Several factors triggering NC computing in the enterprise world include the development and launch of mobile computing devices and other non-traditional computing devices with sophisticated networking capabilities, increase in desktop computing power, the rise of the internet and the growing popularity of cloud computing and virtualization technologies, among others.

Providing data communications over the local loop, CLECs now provide voice, data and co-location services to businesses and small to medium-sized ISPs. Data CLECs services for network service provider (NSPs) who resell data access to business customers, include establishment of collocation centers equipped with data networking equipment, such as, DSL access multiplexer (DSLAM), coordinating all local loop provisioning, installation and testing of customer premises equipment (CPE), maintenance, upgradation, accounting and billing activities. In view of the evolving era of Net-Centric Computing (NCC), where all applications and data reside in a distributed network environment on servers accessible from multiple points on a as needed basis, CLECs of the future will emerge into exclusive data-only network operators and shed their legacy voice/data dual-purpose infrastructure.

As stated by the new market research report on Competitive Local Exchange Carriers (CLECs), interconnected VOIP subscriptions represent the most prominent segment with the number of subscriptions growing at a CAGR of about 18.1% over the analysis period 2009-2018.

Major players in the marketplace include AT&T Inc., Cox Communications Inc., EarthLink Inc., FiberLight LLC, Level 3 Communications Inc., PAETEC Holding Corporation, TelePacific Communications, XO Communications, LLC, among others.

The research report titled “Competitive Local Exchange Carriers (CLECs): A US Market Report” announced by Global Industry Analysts, Inc., provides a comprehensive review of market trends, issues, drivers, company profiles, mergers, acquisitions and other strategic industry activities. The report provides market estimates and projections by Number of Subscribers (in Thousands) for segments - End-User Switched Access Lines; and VOIP Subscriptions. The report also provides market sizing by technology - Coaxial Cable; and Others.

For more details about this comprehensive market research report, please visit –

About Global Industry Analysts, Inc.
Global Industry Analysts, Inc., (GIA) is a leading publisher of off-the-shelf market research. Founded in 1987, the company currently employs over 800 people worldwide. Annually, GIA publishes more than 1300 full-scale research reports and analyzes 40,000+ market and technology trends while monitoring more than 126,000 Companies worldwide. Serving over 9500 clients in 27 countries, GIA is recognized today, as one of the world's largest and reputed market research firms.

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Global Industry Analysts, Inc.
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