Albany, NY -- (SBWire) -- 03/13/2015 --Competitive local exchange carriers (CLEC) are telephone companies operating in the telecom industry, providing their own network and switching facilities and competing with the established local telecom businesses or incumbent local exchange carriers (ILECs).
The concept of CLECs first surfaced in the U.S. after the Telecommunication Act of 1996 was passed. This act was intended to increase competitiveness between local and long distance phone service providers. The term CLEC serves as a differentiation between new or potential competing businesses and established telecom service providers. CLECs are commonly local area businesses that lease or purchase telephone lines and switches from established telecom service providers and offer consumers alternate telephone services. CLECs serving the consumer better than the parent ILECs directly promote competition, and provide the consumer better service at competitive prices.
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When the Telecommunication Act of 1996 was passed in the U.S., CLECs were allowed to offer only data and voice services through landline and wireless connections. CLECs are thus segmented primarily according to the services provided by them, including wireless or digital subscriber line (DSL), wired, and others. Accordingly, a CLEC that provided DSL services is referred to as data local exchange carrier (DLEC). These services, after being leased from local telephone service providers, are re-sold to internet service providers.
How do CLECs Sustain?
The Telecommunications Act made it mandatory for ILECs to offer any telecommunication retail service to the CLECs at wholesale discounts. This allows CLECs to save on investments that would have otherwise been required for installing switches, collocation arrangements, and fiber optic facilities. The sustenance of CLECs in the hugely-competitive telecommunications industry depends majorly on cost saving achieved from this business - the purchase of services at low wholesale costs from ILECs and reselling them at competitive prices.
CLECs operate via the use of ILEC's infrastructure or one that is similar to that of ILECs, with switching network that meets the regulations laid by state, and offer services majorly in small and mid-sized cities, which are regionally-distinct market areas.
Competitive Local Exchange Carriers - Market Drivers and Inhibitors
The CLECs market is driven chiefly by factors such as cost effective tariff plans, increased bandwidth, and advanced telecom services at competitive prices. The factor that hinders the growth of the global CLECs market is the reluctance of service providers to expand their networks. Network expansions require high cost for additional infrastructure development, which increases the initial cost required for the deployment of CLEC services. The reluctance of CLECs in expanding their networks also arises partly from the need to comply with a number of rules and regulations set by government bodies.
Competitive Local Exchange Carriers - Segmentation
The CLECs market is segmented based on a number of parameters including connection access technology and connection types. Based on the variety of connection types, the CLECs market is further segmented into Voice over IP (VoIP) and end-user switched access line. Connections of this kind require technologies such as coaxial cables, fiber to the premises (FTTP), copper local loop, etc., to transfer data from the subscriber to the end user. The continuous improvement in data transfer technologies serve to bring better services to the customers, which may lead to the introduction of better transmission lines and technologies in the future.
Competitive Local Exchange Carriers - Key Market Players
There is no shortage of public businesses in the telecom industry. However, the comparability of these carriers with the incumbent local exchange carriers is quite questionable. However, in the niche marketplace that most CLECs operate, they have their significant share of consumers. On the global front, some of the chief market players in the CLECs market include companies such as World Communications Inc., Digital Network Access Communications, Inc., Enventis Telecom Inc., EarthLink Inc., Broadview Networks, TelePacific Communications, XO Communications, RCN Communications, Affinity Network Inc., CenturyLink Inc., Integra Telecom, FiberLight LLC, TW Telecom, Granite LLC, Level 3 Communications, and Windstream Corp.
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Competitive Local Exchange Carriers - A Global Market Overview
Transparency Market Research Report Added "Competitive Local Exchange Carriers Market" to its database.