Telecommunications

Telecommunications Forecasts

Telecommunications Forecasts for the New Year

Capital Expenditures

Capital Expenditures

Capital Expenditures

We forecast a 10% increase (2006 over 2005) in telecommunications capital expenditures

1. In 2006, we predict h-s access will achieve 48% - 50% penetration by year’s end.

Household Penetration of H-S Accesses

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

20002001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Household Penetration of H-S Accesses

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

20002001 2002 2003 2004 2005 2006 2007 2008 2009 2010

1. In 2006, we predict h-s access will achieve 48% - 50% penetration by year’s end.

2 . For 2006, we predict that the telcos will achieve parity with the cable companies by the end of the year.

Forecast for xDSLs and Cable Modems

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

2000 2001 2002 2003 2004 2005 2006 2007

xDSL

Cable Modems

Forecast for 2006 xDSL Overtqaking CMs

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

2000 2001 2002 2003 2004 2005 2006 2007

Parity!!

We predict Network Traffic will increase as much as 150% for 2006.

Network Backbone Traffic

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Voice Traffic

Dail-Up Data Traffic

H-S Access Traffic

Total Backbone Traffic

We predict that one or more of the large, traditional telecom equipment vendors will be involved in a major merger, or will leave the

US market.

Google

Yahoo

Microsoft

Vonage

Skype

E-Bay

NEW COMPETITORS

Google

Yahoo

Microsoft

Vonage

Skype

E-Bay

We predict that these New Competitors will have much more active participation in the telecom market place, and by the end of the year one or more will begin to

be viewed as more competitor than customer.

NEW COMPETITORS

We predict that the network access sharing rules will continue favoring the incumbent carriers; that the Internet will continue untaxed; and that any prospective telecom

vendor merger will be allowed.

Network Modernization

We predict a definitive movement towards a NGN in 2006.

Network Modernization

Network Modernization - ROADMs

R-OADM

EXPRESS WLs

Drop WLs Add WLs

DWDM DWDM

R-OADMs – The Lightwave Under Control!

Network Modernization - ROADMs

We predict that there will be substantial deployment of ROADMs in 2006.

R-OADM

EXPRESS WLs

Drop WLs Add WLs

DWDM DWDM

R-OADMs – The Lightwave Under Control!

Fiber To The Premises

FTTP

We predict that SBC will enter the FTTP arena early in 2006 and that BellSouth will begin a similar program by the end of the year.

FTTP

So, there are our predictions for 2006. We hope they will be useful to you, or at least have offered you a laugh or two.

Happy New Year to all!

We forecast a 10% increase (2006 over 2005) in telecommunications capital expenditures

In 2006, we predict h-s access will achieve 48% - 50% penetration by year’s end.

For 2006, we predict that the telcos will achieve parity with the cable companies by the end of the

year.

We predict Network Traffic will increase as much as 150% for 2006

1

2

3

4

We predict that one or more of the large, traditional telecom equipment vendors will be involved in a major merger, or will

leave the US market.

We predict a definitive movement towards a NGN in 2006.

We predict that these new competitors will have much more active participation in the telecom market place, and by the end of the year

one or more will begin to be viewed as more competitor than customer.

We predict that the network access sharing rules will continue favoring the incumbent carriers; that the Internet will continue

untaxed; and that any prospective telecom vendor merger will be allowed.

We predict that there will be substantial deployment of ROADMs in 2006.

We predict that SBC will enter the FTTP arena early in 2006 and that BellSouth will begin a similar program by the end of the year.

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6

7

8

9

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Holliday's Holiday Horoscope

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