The following rankings of wholesale service providers by region are based on information from Global Internet Intelligence firm Renesys. Its unique Market Intelligence database provides objective data on internet routing and offers a glimpse into the commercial dynamics of the world of the IP backbone over the past 12 months, across geographies and networks. The data comes from the Renesys Market Intelligence product, which is used by service providers for competitive analysis, product planning, and sales management.
South America
The last 12 months have proved extremely fruitful for European operators in the South American wholesale IP rankings. Telefónica moved into pole position after it began handling more transit in a large number of South American markets, including Uruguay, Colombia, Paraguay, Brazil and Argentina. Teleom Italia Sparkle likewise was able to expand its volume of transit in Argentina and as a result climb from third to second in the rankings.
Telefónica and Telecom Italia Sparkle were also joined in the top 10 for the first time this year by Portugal Telecom. The Portuguese operator began providing transit to Telecomunicações da Bahia in Brazil, and as a result rose from eleventh to eighth position.
The natural crossover between language and content gives these European operators an obvious foothold in the South American market. The Atlantis-2 cable is the principal connection between South America and Europe, which connects Brazil and Argentina to Spain and Portugal via Senegal and the Republic of Cape de Verde. Renesys notes, however, that most IP transit from South America travels north to Miami or across the Atlantic to Europe.
Asia
Strong movement in the Asian IP wholesale rankings over the last 12 months can be attributed to high growth markets in south east Asia.
After clinching Vietnamese mobile operator Viettel as a new customer, Tata rose significantly from sixth to third in the rankings. Along with NTT, Deutsche Telekom, PCCW, Hutchison and China Telecom, Tata will be providing global transit services for Viettel’s 2G and 3G mobile data networks.
The growth of these networks has also benefited Deutsche Telekom which rose from twelfth to eighth. The German carrier also added Vietnam Posts and Telecommunications and Thai company Triple T Internet as customers over the last 12 months.
China Telecom’s drop from fourth to ninth in the rankings stems from its complicated transit history with China Education and Research Network Centre (CERNC). China Telecom has historically been a transit provider to CERNC, but this has gradually evolved into more of a peering role. CERNC’s international connectivity has since been passed onto the likes of Pacnet and Deutsche Telekom, further enabling both companies to rise up the league tables.
Renesys notes that many North American and European Tier 1s are now focussed on supporting large enterprise accounts in Asia as opposed to engaging in new wholesale business.
Africa
Success in the African IP wholesale rankings over the last 12 months came from service providers either securing diverse customers across the continent, or establishing a dominant position in a particular region.
Level 3, for instance, was able to move from fourth to first on the strength of its connectivity in South Africa. The company gained South African provider Internet Solutions as a customer, and began carrying international traffic for downstream customers such as the South African government and the South African Broadcasting Corporation. It also carried more transit for existing customers such as Telkom SA, Vodacom and Zimbabwe’s Telone. Telefónica likewise rose from third to second based on its leading role as a transit provider to Morocco’s ONPT.
Tata, on the other hand, rose from eighth to fourth in the rankings as a result of handling more transit or adding new customers across the continent. It handled increased volumes of transit for South Africa’s Neotel and Vodacom, Sudan’s Sudatel, and Tanzania’s Simbanet and Tanzania Telecom, as well as adding new customers Ghana Telecom, and Zimbabwe’s Mainone Cable Company and Telone. Renesys notes that due to the sheer size of the continent and the topography of its subsea cable systems, native African network service providers tend to stay within their regional quadrants - with service providers in South Africa never venturing north of the equator and vice versa. Renesys also notes that Zimbabwe is now receiving fibre connectivity to augment its satellite services, which means the centre of the continent is beginning to receive good, albeit expensive, connectivity.
Europe
Movement in the European IP wholesale ranking has practically been stagnant over the last 12 months. Telecom Italia Sparkle was the only notable mover, rising from eighth to sixth position. The Italian operator’s success stems from transit sales to Russian mobile operator Vimplecom as well as the Russian incumbent Rostelecom. It also saw increased transit activity from Romania’s Romtelecom, Croatia’s Hrvatski Telekom, Telekom Serbia, Greece’s Hellas Online, the Cyprus Telecommunications Authority, and Turkey’s Turkcell/Superonline.
Over the last three to four years, many European wholesalers have increasingly be drawn to the higher profit margins still found in eastern Europe. Telecom Italia Sparkle appears to now be reaping the rewards of pursuing a long-term strategy in many of those markets.
Renesys notes that Level 3 and Cogent are now the leading North American network service providers pushing IP transit sales hard in Europe, with the rest instead choosing to concentrate on their enterprise businesses.
North America
While activity in the North American wholesale rankings appears more robust than in Europe, most movement either up or down the league table can be attributed to large-scale consolidation in the US market.
Comcast has continued to utilise its national backbone, and edged up the table from ninth to eighth after handling increased transit over the last 12 months. The company seems likely to continue to pursue new wholesale opportunities within its network footprint.
In this very tight market, securing a new customer or experiencing an increase in transit can seemingly instantaneously alter a company’s position in the rankings. After acquiring Charter as a customer, Cogent rose from sixth spot to fifth, while XO increased its transit for customer Verizon Wireless to move up from eight to seventh.
Renesys notes that it will be interesting to finally see what CenturyLink’s IP transit strategy will be over the coming months, as it looks to pull together traffic from subsidiaries CenturyTel, Qwest and Savvis.
Global
There’s been very little change to the global rankings over the last 12 months. The most eye catching movement came from AT&T, which was out manoeuvered from its fifth spot and fell to tenth in the rankings. This can be partly attributed to the company’s loss of Korea Telecom as a customer back in October 2011.
AT&T’s loss was Tata’s and NTT’s gain, with the former subsequently being able to inch its way from sixth to fifth in the league table.
AT&T’s fall in the overall global rankings mirrors its five place descent in the Asian rankings, which illustrates just how essential the regional markets have become for maintaining a position on the global league table. Likewise, Cogent’s climb from eight to sixth on the global rankings comes as a direct result of its improved position in the North American rankings.
In spite of the order flutter of movement here or there, Renesys notes that the global rankings have generally stabilised over the last 12 months and expect that to continue to be the case moving for the rest of 2012.
