Business: Local Service Market including ILEC and CLEC

1
Business Local Service Market including ILEC
and CLEC

• February 24, 1999
• Darrell Gualco
• Christian Nobs
• Martin Ostermayer

2
The last mile - The last big battle ground

• Telecommunications Act 1996
• Competition in the local access market
• ILEC open market
• CLEC new entrants

3
Incumbent Local Exchange Carriers (ILEC)

• SBC
• Pacific Telesis
• Ameritech
• US West
• Bell South
• Bell Atlantic
• Nynex
• Merger mania 7 gt 5 gt 4 ??

4
Competitive Local Exchange Carriers (CLEC)

• TCG (ATT)
• Worldcom (MCI)
• Teligent
• McLeod-USA
• Nextlink Communications
• USN Communication
• ICG Communications

5
Local telephone market size
Sources Multimedia Telecommunciactions Assoc.
Telecommunications Industry Assoc. The Yankee
Group
6
Marketing strategies

• ILEC
• Expansion - bigger is better
• Access to long-distance
• Alliances with IXCs
• Protect their turf
• Deployment of ADSL

• CLEC
• Better service at competitive rates
• Cream skimming the business market
• Use advanced access technology

7
Other competitors in local access market

• Inter-exchange Carriers (IXC)
• ATT, Sprint, MCI Worldcom, Qwest
• Wireless local loop
• Cable TV
• TCI, Time Warner

8
The Internet bottleneck

• Cost for bundled service
• DSL 49 /month
• Cable 46 /month
• Cost for CPE
• DSL splitter 200
• Cable modem included (300 value)
• Time to market
• DSL 3 to 10 years
• Cable 3 years

Sources Kinteic Strategies, Inc. Telechoice,
Inc.
9
How to switch from ILEC to CLEC

• Insist on specific contact people at CLEC
• Let the CLEC deal with your existing ILEC
• Do the switching in phases to minimize service
  disruption
• Expect billing errors in the first months
• Consider at least 2 or 3 competitors for the
  services and compare rates
• Do research on the CLECs background
• Make your staff take the switch seriously
• Insist on customer references from the CLEC and
  talk to them
• Remember that right now, they need you more than
  you need them

10
Questions?