With 2009 barely in our rear view mirror and another New England winter storm on its way, I think now is as good a time as ever to take a look at what I think is in store for the wireline industry in 2010. Whether or not the economy does come back in 2010, or it stays relatively flat, I think 2010 will be a continuation of some trends that started to emerge throughout 2009:
- Cable gets its business groove on: Cable continued to be opportunistic with its business service ambitions in 2009 over its HFC and fiber networks and I suspect 2010 will be more of the same. Standing out in the cable business crowd are three MSOs: Cox Business with a its $1 billion revenue goal for 2010; Charter's drive to add more resources to meet wireless backhaul demand and seek opportunities to connect more businesses on its national network; and finally Comcast which is in the process of purchasing Chicago-based CLEC Cimco.
- Wholesale wireless backhaul bonanza: As we chronicled throughout 2009, the wireless operator's expansion of smart phones and advancement to LTE, is attracting a host of players to cash in on the wireless backhaul bonanza. In addition to the ILEC wholesale arms, which are currently expanding their fiber footprints to cell sites, cable operators, CLECs and even VNOs will also continue to ramp up their own wireless backhaul wholesale offerings in 2010.
- Qwest makes a sale?: Qwest making a deal to sell or merge with another service provider in 2010 is probably my boldest prediction here. This could play out in two possible ways: maybe Qwest finally accepts a reasonable offer to sell off its long haul network or one of the ambitious tier 2 ILECs makes a run at the whole company. If I had to bet on one, I think a tier 2 ILEC, or a consortium, could buy Qwest to as one reader suggested to me recently as a way to effectively compete against AT&T and Verizon.
- Carriers proceed to 100 Gbps: As far back as 2001-2002, I remember there was a lot of talk about how service providers would eventually migrate to 40 Gbps. After the Internet bubble burst, the 40 Gbps trend never really took off because there were no applications to fill it up that kind of a pipe. Fast forward to 2010 and it appears that service providers have plenty of bandwidth hungry applications, but instead of going to 40 Gbps, they are migrating to 100 Gbps optical transmission and 100 Gbps Ethernet.
- Meet me at the middle mile: Taking a leverage and extend mentality, wholesalers and even state-run network providers believe they can extend their long-haul networks to serve other last mile broadband providers with a mix of wholesale IP/Ethernet, optical, voice and even traditional TDM-based (DS3s) middle mile services . And while there was the usual uproar to their bids for money under the president's broadband stimulus act, four states have already gotten money for their projects.
Okay, so maybe I can't predict everything that is going to happen this year in the wireline industry, but I do think my choices represent tangible opportunities that will be tapped into in 2010. Of course, I am sure you may not agree with my prognostications, or you may have other suggestions, so please feel free to share them with me. With that in mind, welcome to 2010.
--Sean
Links:
[1] http://www.fiercetelecom.com/story/fiercetelecom-2010-prediction-cable-gets-down-business/2010-01-03
[2] http://www.fiercetelecom.com/story/fiercetelecom-2010-prediction-wholesale-wireless-backhaul-demand-will-rise/2010-01-03
[3] http://www.fiercetelecom.com/story/fiercetelecom-2010-prediction-qwest-goes-auction-block/2010-01-03
[4] http://www.fiercetelecom.com/story/fiercetelecom-2010-prediction-forget-40-gbps-i-want-100-gbps/2010-01-03
[5] http://www.fiercetelecom.com/story/fiercetelecom-2010-prediction-middle-mile-march/2010-01-03
[6] mailto:sbuckley@fiercemarkets.com
