Monday, May 16, 2011

Level Crossing

Shake-up in the global provider market.


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On Monday, 11 April 2011, Level 3 announced they had entered a definitive agreement to acquire Global Crossing. According to the Renesys Market Intelligence rankings, this merger would bring together the world's #1 and #2 global providers, with over half the Internet market on earth dependent on the combined entity. If the deal gained regulatory approval in the US and elsewhere today, how would the Internet provider landscape change? We'll answer that question in this blog, giving the proposed union a fictional name of Level Crossing for the purposes of our discussion.

It's become a tradition at Renesys to provide a periodic review of how the Internet providers at the top of our Market Intelligence global rankings are faring. We took our most recent look at the end of 2010, at which point Sprint had just been overtaken by Global Crossing for the #2 position and was on the verge of being passed again by NTT. Note that our rankings are a rather crude measure of size, as they are based entirely on the quantity of IP space ultimately transited by each provider. However, it's the ranking trends that are more revealing than any absolute number. Who is adding customers? Who is losing them or just standing still? Changes in IP transit answer these questions and provide an objective measure by which to rate providers.

Looking at the top five global providers today, we have the following breakdown by global market share. The percentages add up to more than 100%, since any organization serious about its Internet presence is multi-homed, i.e., has more than one service provider for redundancy. By our metric, Level 3 has just over 40% of the market and Global Crossing just over 30%.


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