Friday, 24 March 2017

Wholesale Bandwidth: Springing into life

Craig Stephen
Wednesday 01 March 06

Level 3's purchase of the biggest-ever chunk of lit bandwidth could breathe new life into the ailing wholesale market

Wholesale IP transit business is showing signs of springing into life after years of steep price declines. But the model of free peering for international IP traffic could be on its last legs. Last month Level 3 snapped up the largest ever tranche of lit subsea capacity by a single carrier when it bought 300GB of transatlantic capacity from Apollo Submarine Cable System. That is 6% of the total 5.2 terabits per second of lit transatlantic capacity according to TeleGeography. "This is a bold move," says TeleGeography senior analyst, Alan Mauldin. "It shows that Level 3 believes prices can't fall further and is confident in traffic growth over the long run." But it didn't end there. Level 3 Communications, which already had 480GB of transatlantic capacity, took the option of adding a further 300GB. The deal is also a boost for embattled UK operator Cable & Wireless which owns Apollo. But analysts say Level 3 will be driving a hard bargain for the bulk purchase. "They will have got a good discount on this deal," says Tony Marson, senior analyst at Yankee Group. "A 10-Gigabit IRU (15-20 years) would be about $2…

Wholesale IP transit business is showing signs of springing into life after years of steep price declines. But the model of free peering for international IP traffic could be on its last legs. Last month Level 3 snapped up the largest ever tranche of lit subsea capacity by a single carrier when it bought 300GB of transatlantic capacity from Apollo Submarine Cable System. That is 6% of the total 5.2 terabits per second of lit transatlantic capacity according to TeleGeography. "This is a bold move," says TeleGeography senior analyst, Alan Mauldin. "It shows that Level 3 believes prices can't fall further and is confident in traffic growth over the long run." But it didn't end there. Level 3 Communications, which already had 480GB of transatlantic capacity, took the option of adding a further 300GB. The deal is also a boost for embattled UK operator Cable & Wireless which owns Apollo. But analysts say Level 3 will be driving a hard bargain for the bulk purchase. "They will have got a good discount on this deal," says Tony Marson, senior analyst at Yankee Group. "A 10-Gigabit IRU (15-20 years) would be about $2…

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