文档介绍：September 8, 2000 . Morgan Securities Inc.
New York Equity Research
Industry Analysis
Backbone!
How Changes in Technology and the Rise of IP
Threaten to Disrupt the Long-Haul
Services Industry
Highlights of a ing Joint Industry Study by McKinsey & Company
and . Morgan
• Explosive growth in IP data – estimated to exceed 100% a year through 2004 – will soon
position IP as the dominant form of traffic on long-works and drive aggregate
long-haul traffic growth of over more than 60% annually versus 20% historically, in our
view.
• Continued investment in new technologies by transport providers will be necessary to
meet demand and lower costs, but we work scale and utilization will emerge
as the most important determinants of petitiveness. As a result, carriers will have
large incentives to cut price pete for traffic on works.
• We believe key IP-based services are set to take significant share from legacy voice and
data services and exert a disproportionate influence on pricing of those legacy services,
resulting in slowing aggregate industry revenue growth.
• The industry will likely face considerable turmoil as challengers seek to take advantage
of and accelerate this disruption and incumbents wrestle with cannibalization and
restructuring issues.
• These underlying economic bined with too many industry players have the
potential to drive insufficient aggregate returns on capital, in turn driving consolidation
and shakeout.
This report is the result of a joint research effort between McKinsey & Company and
. Morgan. The research is focused primarily on technological change in the
munications backbone industry and its expected impact on overall industry
performance.
. Morgan Securities Inc.
Equity Research
2
EXECUTIVE SUMMARY
In May of this year, bined team set out to answer a few fundamental questions that
have for the past two years created considerable confusion for the industry and its
in