DSL Equipment Sales Soar with Service Provider Price Cuts According to a Dell'Oro Group Report; Alcatel Continues to Dominate the DSL Market with 30% Market Share - Industry Trend or Event

Cambridge Telcom Report, Feb 28, 2000

The DSL Market continued to show impressive growth in 4Q99 growing 41% quarter over quarter to $536M, according to a recently published Dell'Oro Group Report.

Propelling the growth in 4Q were the DSL Service Providers who began to engage in market penetration pricing tactics. "Many of these service providers missed the groundswell of Internet subscriptions during the mid-90's, and they plan to lead the migration to high-speed Internet services," says Tam Dell'Oro, founder of Dell'Oro Group. "With aggressive pricing tactics, DSL service providers can lure tens of millions of new DSL subscribers during 2000."

Benefiting from the strong growth in the DSL market were equipment manufacturers like Alcatel, Cisco and Lucent. Other companies showing significant growth in 4Q were Efficient Networks, Nortel, and Copper Mountain. There is no doubt that this technology segment holds the promise of delivering significant gains for Service Providers and Equipment Manufacturers alike, the question is whether or not they can keep up with and fulfill demand.

                 Market Leaders -- DSL
            (Access Concentrator and Client Modem)

                                                  Quarterly
Total Market                           4Q99          Growth

 MFG Revenue ($M) -- DSL               $536             41%

Vendor -- DSL                          Rank           Growth

 Alcatel                                  1              30%
 Cisco                                    2              16%
 Lucent                                   3              50%

The Dell'Oro Group's Routers, Access & Voice report provides in-depth data and analysis on the following technologies: Legacy Routers (data capable), Access Routers (voice and data capable), Access Concentrators (Central Office Equipment for Modem/ISDN, Cable Modem and DSL), and Client Modems (Customer Premise Equipment for Cable and DSL). The report tracks market shares for approximately 25 vendors in terms of revenues, ports shipped and ASPs.

The Dell'Oro Group is a research and consulting firm specializing in business planning and strategic competitive analysis in the networking industry.