The emergence of frame relay and asynchronous transfer mode (ATM), as well as the emergence of broadband access technologies such as digital subscriber line (xDSL) and cable modems, has placed considerable strain on existing metropolitan infrastructures. With data services growth averaging more than 50 percent per year and voice growth at more than 15 percent per year,¹ the need to use existing network infrastructure in a careful and cost-effective manner is of critical importance.

BancBoston Robertson Stephens predicts that to support the growth of the Internet alone, 350,000 T1s and 25,000 T3s must be provisioned over the next four years (compared to the current installed base of approximately 300,000 T1s and 2,200 T3s). Driven by Web hosting, business-to-business and business-to-consumer electronic commerce (e-commerce), IDC projects that by 2003, 55 percent of all enterprises and 71 percent of all home businesses will be on-line. The result is an Internet protocol (IP) services market of $5.75 billion and a line aggregation (ATM, frame relay, and private line) market of $21.5 billion by 2003.² And, as corporations deploy Internet virtual private networks (VPNs) to replace existing private-line and frame-relay networks, the U.S. Internet access market is expected to grow from less than $3 billion in 1998 to $42 billion by 2003.³

Figure 1 outlines the expansion in e-commerce driving data traffic and revenue growth, while Table 1 describes broadband data and service access revenue projections.

Figure 1. E-Commerce Revenue Projections⁴ (in Millions of Dollars)

	1998	1999	2000	2001	2002	2003
Dial1	1,206	2,302	3,314	4,458	5,607	6,627
56 kbps	197	467	746	1,068	1,472	1,782
DSL	—	24	105	259	504	876
Cable	18	74	276	697	1,225	1,786
FT1/T1	896	1,687	3,019	5,619	7,921	9,268
DS3	255	568	1,345	3,696	7,610	12,657
OC3	—	49	351	1,094	2,339	4,140
Total Broadband	1,169	2,402	5,096	11,365	19,599	33,569
Bundled2	270	575	1,151	2,348	3,615	4,842
Total	2,842	8,048	10,307	19,239	30,293	41,978
1includes integrated services digital network (ISDN) 2includes local loops and customer premises equipment (CPE)

Table 1. Access Revenue Projections⁵ (All Numbers in Millions of Dollars)

With user demand for broadband services escalating, tremendous advances have also been made in core network bandwidth capacities. Technologies such as DWDM are capable of data rates in excess of 1 Petabit per fiber.

This convergence of high-bandwidth applications originating from the user and high-speed networks at the core is placing a tremendous amount of pressure on the edge of metropolitan networks that act as on-ramps to the core networks. For the service providers in this arena, the key factors to success now include how effectively they will be able to meet burgeoning demand for high-bandwidth applications, how rapidly they can deploy and provision advanced voice and data services, how well they can protect their existing revenue base (voice still accounts for more than 65 percent of all service-provider revenues), and preserving and fully utilizing their existing network infrastructure.

¹Ryan, Hankin and Kent, 1999
²Ibid.
³Forrester Research, 1999
⁴Forrester Research, 1999
⁵IDC, 1999