CLEC REPORT ™ 2004 - 18th Edition

The CLEC sector is moving closer to stability as 2003 draws to a close. Based on analysis of company and industry trends, the competitive telecom space has reached a kind of plateau where the operational improvements that have been put into place over the past few years by many CLECs have begun to make some positive changes among many of these companies. Based on these positive signs, NPRG predicts that the CLEC sector will see a steady up-trend over the next several years.

Bankruptcies, which have decimated the competitive telecom space over the past few years, sharply declined in 2003. Several CLECs have used Chapter 11 bankruptcy to their advantage, emerging with reduced debt and more efficient operations. NPRG believes that this can be viewed as both a positive and a negative for the industry as a whole. Though these companies have a second lease on life and are arguably better competitors after Chapter 11 than before, some may believe that true stabilization in the industry will occur when the weaker players leave the market and make room for stronger CLECs. Probably the biggest bankruptcy story of 2003 is MCI’s impending exit from Chapter 11, which may have far reaching effects for the CLEC industry.

This edition of the CLEC Report™ focuses on 62 traditionally voice-focused, facilities-based CLECs, as well as another 19 that could attain facilities-based status in the next 24 months. Regarding revenues and other metrics, the CLEC Report 2004™trade;, 18th Edition provides two sets of totals. The first is an aggregate number for the companies profiled in this report - the traditionally voice-focused CLECs. The second total adds in the aggregate number for all other facilities-based CLEC categories covered in other NPRG reports, which cover the entire competitive telecommunications industry. Thus, in addition to reporting on the companies in this Report, we are also reporting totals for the full range of industries that collectively constitute the facilities-based CLEC world.

As is the case across all NPRG industry analysis reports, the CLEC Report 2004™trade;, 18th Edition is a compendium of company profiles, each built on a foundation of basic metrics captured through primary research, as well as on thorough reporting and analysis conducted throughout the year by NPRG analysts. All of the industry metrics in the CLEC Report™ are aggregates of these company metrics. Thus, NPRG’s sector and overall industry numbers are not extrapolations, but actual totals built from the ground up.