The global competitive local exchange carriers market is anticipated to gain lucrative growth over the next six years owing to the varied advancements in the telecommunication market. Advancements such as LMDS, fiber optics network, and DSL is expected to accentuate market growth. After the Telecommunication Act of 1996 was passed by the U.S. government, the Competitive Local Exchange Carriers (CLEC) concept evolved in the market forefront. The initiation of CLEC is expected to increase the competition between long-distance and local phone service providers. CLECs are local area businesses that lease or purchase telephone switches and lines from major telecom operators and provide the end-users with alternate telephone services at a reasonable price and better quality. CLECs are preferred for local data transmission as they offer better service in terms of speed and bandwidth as compared to ILECs.
Key features such as flexibility and scalability along with cost-effectiveness are expected to elevate the CLEC market augmentation. CLEC offers high-speed data service to businesses, home users, and telecommuters, which is projected to accentuate the CLEC market development. Increasing demand for enhanced bandwidth, highly developed telecommunication services along with the augmented usage by customers for cost-effective tariff plans are expected to drive market growth over the forecast period. Customers are shifting towards reasonably priced packages and improved functionalities provided by CLECs leading to a considerable decline in the residential and business ILEC wireless access lines, which is anticipated to further amplify the Competitive Local Exchange Carriers market development.
The emergence of novel technologies such as fixed wireless and Metro Ethernet is expected to offer lucrative opportunities for market expansion over the next six years. The continued growth of interconnected VoIP and wireless-only households along with the ongoing erosion of wireless access lines offering network reliability is anticipated to fuel CLEC market growth. Additionally, differentiation of services and delivery of flexible bandwidth to prime office locations are projected to offer favorable circumstances for the market development. High initial investment along with infrastructural requirements for the expansion of networks is expected to hamper the market growth. The reluctant approach of service providers to expand the network coverage despite rising demand from customers is further projected to hamper the market Further, CLECs are more vulnerable against lower operating margins, which are expected to adversely affect their ability to generate huge cash flows.
The intensifying price competition within the CLEC market is associated with the entry of various participants such as voice over broadband providers and cable telephony operators. However, new players entering the market need to follow the stringent regulations set by the government. The Competitive Local Exchange Carriers market can be segmented on the basis of service connection into end-user switch assess lines and VoIP subscriptions. On the basis of technologies applied, the market includes Fiber To The premises (FTTP), terrestrial fixed wireless, copper local loop, and coaxial cable to transmit data from one end to another. Several wireless telephone companies across the globe persist to deploy facilities-based VoIP services over fiber-based facilities along with developing advanced solutions to offer enhanced telephone and other services to the end-users, which are expected to trigger the CLEC market augmentation.
The North American region is expected to be the prominent region for the CLEC market owing to the well-established industry standards and regulatory reforms. This trend is expected to continue over the forecast period. Rising IT infrastructure development in the Asia Pacific region, especially in countries such as China, Japan, and India is further expected to increase the demand for CLEC in this region. The Competitive Local Exchange Carriers market is highly competitive with the presence of several market players including RCN Corp., AT&T Inc., XO Comm. LLC, Electric Lightwave, EarthLink Inc., InterGlobe Communication, CenturyLink Inc., WindStream Corp., Verizon Comm. Inc., World Communication Inc., Tw Telecom Inc., Granite LLC, Broadview Networks, and Enventis Telecom Inc.
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In order to ensure business continuity amidst the COVID-19 crisis, business organizations, especially in highly affected countries are allowing their employees to work from home. The increase in people working from home has led to a surge in demand for online video viewing, downloading, and communication through video conferencing, all of which are leading to increased network traffic and data usage. COVID-19 shall accelerate the demand for agile and flexible work styles and further push the adoption of communication services that tend to improve work-life balance. On the flip side, telecom regulators worldwide have postponed their plans of 5G spectrum auction amidst the global pandemic. This is expected to have an impact on the commercialization of commercial 5G standalone deployments and revenue generated through 5G services. The ongoing pandemic has forced telecom operators worldwide to test their network resiliency and revisit their planned investments, especially in 5G technology. The report will account for Covid19 as a key market contributor.