Owing to several technological advancements in the telecommunication market, the global Competitive Local Exchange Carriers (CLEC) market is expected to witness significant growth over the forecast period. Various advancements such as fiber optics network, DSL, and LMDS are expected to trigger the CLEC market.
After the U.S. Government passed the Telecommunication Act of 1996, the CLEC concept has emerged in the market. CLECs are local area businesses that purchase or lease telephone lines and switches from well-known telecom operators and provide end-users with better quality telephone services at low prices.
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Prominent features such as cost-effectiveness, scalability, and flexibility are expected to drive the CLEC market over the next six years. CLEC provides high-speed data service to home-users, telecommuters, and businesses. Highly developed telecommunication services, amplified demand by customers for cost-effective tariff plans, and the rising demand for enhanced bandwidth are expected to drive CLEC market growth.
Emergence of advanced technologies such as Metro Ethernet and fixed wireless is anticipated to offer prominent opportunities for the CLEC market development. Additionally, ongoing erosion of wireless access lines and continued growth of wireless-only households and interconnected VoIP is estimated to impel CLEC market growth.
However, high infrastructural requirements and initial investments for the expansion of networks are expected to challenge the CLEC market over the forecast period. Further, the CLEC’s vulnerability against lower operating margins is anticipated to immensely affect their ability to produce heavy cash flows.
The CLEC market can be segmented based on the technologies applied into copper local loop, terrestrial fixed wireless, Fiber-To-The-Premises (FTTP), and coaxial cable for data transmission. On the basis of service connection, the market can be categorized into VoIP subscriptions and end-user switch access lines. Various wireless telephone companies across the world are adopting facilities-based VoIP services over fiber-based facilities for offering enhanced telephone services to the end-users which are expected to drive the CLEC market expansion.
North America is expected to be the dominant region for the CLEC market owing to the regulatory reforms combined with well-established industry standards. Growing IT infrastructure developments in the Asia Pacific region, mainly in countries such as India, Japan, and China are further expected to fuel the market demand in this region.
Major market vendors in the CLEC market include CenturyLink Inc., Broadview Networks, Enventis Telecom Inc., InterGlobe Communication, AT&T Inc., RCN Corp., TW Telecom Inc., Verizon Comm. Inc., Electric Lightwave, Granite LLC, EarthLink Inc., XO Comm. LLC, and World Communication Inc.
Information Source: Grand View Research