The $36 billion private line services market probably wont see much growth in 2011. However, the need for new private lines should rebound soon as new 4G wireless applications boost demand.
Thats according to a new market analysis study from Insight Research.
Private lines are leased point-to-point circuits. Wireless carriers use them to link their towers to landline networks, and enterprises use them to link sites to one another and to the Internet. In the near term, though, the communications industrys move from frame relay/ATM networking to IP networks will continue to drag on private line revenue growth.
And yet, as video and new data applications strain 4G wireless networks, operators will have little choice but to use more private lines for backhaul. Insight Research predicts that will happen within two years.
“The need to backhaul 4G services will create huge demand as will the local bandwidth for caching IPTV video services, and for facilitating VoIP,” Insight President Bob Rosenberg said in a press release. These areas are telecom’s growth areas and they create demand for private lines, so we expect to see overall growth return to the private line sector by 2013.”