This report provides an update and comparison to earlier forecasts conducted by Technology Futures, and describes and quantifies the impact of new technologies such as xDSL and dense wave division multiplexing. Circuit equipment investment is growing over 10% per year, while telephone plant in service is growing less than 5% since more functionality is being booked to the circuit category. This report forecasts the transitions and quantifies the rate of obsolescence of the significant and growing embedded investment in circuit equipment.
Circuit equipment in service as of 1/1/2001 comprises 23% of the ILECs' $355 billion plant investment and has an average remaining life of 3.2 years.
The range of remaining lives for categories of equipment within the account range from 3.0 years for pre-SONET digital equipment (over 60% of the circuit investment) to 7.7 years for ADSL (currently less than 2% of circuit investment). However, the life for some of the early product lines of ADSL may be much shorter.
SONET equipment currently represents over 25% of the circuit account investment. However, the vast majority is at the OC-48 level or below and will continuously be made obsolete by higher SONET levels and/or DWDM. The ARL for this category is 3.4 years.