Monday, May 16, 2011

Qwavvis: The Battle for Second

More on the battle of global providers....



About two weeks ago, Level 3 announced plans to acquire Global Crossing and we blogged on the enormous size and scope of the new entity, which we called Level Crossing. This week, CenturyLink, a regional US phone company, agreed to acquire Savvis. Since CenturyLink also owns Qwest, we are seeing another merger of two Tier-1 Internet providers, a pairing which we'll label Qwavvis. In what follows, we examine the possible business considerations behind the move, as well as the impact on Internet transit customers and Renesys Market Intelligence rankings.

Renesys rankings of Internet service providers are based entirely on the quantity of IP space ultimately transited by each provider. While a crude measure, it is an objective one, and it is the ranking trends, rather than any absolute number, that are the most revealing. As noted in our last blog, if #1-ranked Level 3 succeeded in merging with #2-ranked Global Crossing today, the rankings of the top global providers would have the following form. The newly combined entity would dominate the global provider market.


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