Capital Spending by Largest CLECs to Grow 54 Percent in 1998, According to Piper Jaffray Research.

MINNEAPOLIS--(BUSINESS WIRE)--Oct. 8, 1998--

A new report highlights private and public companies positioned to benefit from the boom

Capital spending by the 12 largest Competitive Local Exchange Carriers (CLECs), representing 70 percent of the industry, is on track to grow more than 54 percent to $5.6 billion in 1998, according to a new Piper Jaffray Inc. report. The 33-page report, "Riding the Wave: Equipment Beneficiaries of the CLEC Boom," by Senior Analyst Conrad Leifur, was published today.

In the report, Leifur explores equipment market segments and companies that are benefiting from the CLEC boom. CLECs have multiplied since the Telecommunications Act of 1996 was enacted. Among the report's findings and projections:

-- CLECs have driven a significant increase in network

infrastructure growth, accounting for roughly a 14 percent

increase in service provider capital spending in the United

States; -- Capital spending by CLECs is on pace to grow 30 percent over the

next three years; -- Spending will shift from basic infrastructure to access

equipment, as CLECs increase their market share in built-out

regions; -- T1 lines will be the primary means by which CLECs reach

customers, based on economics and the expected popularity of

integrated voice and Internet offerings; -- The equipment segments that will be the biggest beneficiaries of

CLEC capital spending are integrated access devices, digital loop

carriers, access cross-connects, physical connectivity products

and add/drop multiplexers; -- Data CLECs are driving deployment of digital subscriber line 

(xDSL) data services to business customers. For xDSL equipment

vendors, CLECs represent a new customer segment that offers high

growth potential.

The new report follows Leifur's April 1998 report, "Telecom Equipment: Network Infrastructure," which explores the growth of data traffic and the last mile bottleneck, in addition to service provider competition. The current report, published in October of 1998, explores CLEC capital spending trends and the shift toward access equipment; CLEC network architectures and deployment options; key equipment segments; and how data CLECs are teaming with network service providers to deliver data services over xDSL. Finally, the report points to 17 public and 23 private companies that are positioned to benefit from CLEC and data CLEC growth.

Please contact your Piper Jaffray representative for a copy of the report. Members of the media may also receive the report by calling 612/342-6594.

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