Private-Line Services Market to Decline

By Arselia Gales

A new study shows that the $35 billion U.S. private-line services market is expected to decline 1 percent annually over the next five years as the shift to packet-based services offsets demand for higher bandwidth private lines.

The new study from Insight Research, “Private Line and Wavelength Services, 2013-2017”, provides analysis of the U.S. market and evaluates the total private-line market and segments it by local and long-distance private-line service revenue, wholesale and retail private line revenue, revenue by type of carrier, revenue by T1, T3 or OC-n circuit class, as well as the number of T1, T3, and OC-n private lines sold. The study also provides estimates of wavelength revenues.

The study shows that while private line revenues will decline modestly, equivalent circuit counts will continue to rise driven by cloud computing and the new video applications. 

“We have reached one of those unique periods where demand is rising yet revenues are in decline. Price erosion and the shift to lower unit pricing at higher bandwidth tiers are to blame,” says Fran Caulfield, Insight Research Director. “The need to backhaul data-intensive wireless services and increased local bandwidth for wireline data and video services will prevent significant revenue erosion for the foreseeable future.”