Metro Fiber and Bandwidth Providers Face Surplus Challenges

November 02, 2006

In the late 1990s, scores of metro service providers based their business plans on the assumption that bandwidth limitations on metropolitan area networks (MANs) was the major bottleneck to higher-capacity long-haul networks. By constructing new MANs, these providers hoped to release constrained demand for intra-city services that would also drive more traffic onto overbuilt long-distance routes. Today, it’s clear that the construction spree that followed replaced the metro bottleneck with a considerable metro fiber surplus, which despite many consolidations, persists through 2006. Considering these developments, is there any hope on the horizon for providers of metro fiber and bandwidth services?

TeleGeography’s enhanced Metropolitan Area Networks Database (MANs) seeks to answer this difficult question by surveying metro service providers worldwide. The research examines the role MANs play between local and long-distance networks and then details shifts in metro market landscapes from both an operator and product/services perspectives. By quantifying provider data, MANs delivers up-to-date primary research to identify potential market opportunities in more than 560 cities worldwide.

While surplus concerns should alarm providers, there’s opportunity in markets where enterprises demand a broader mix of services. “Product mix on developed metro networks is moving more and more toward Ethernet and managed services to accommodate the burgeoning enterprise network market,” states Eric Schoonover, Senior Research Analyst with TeleGeography. The company’s recently released Enterprise Network Pricing Service has also helped quantify this shift. According to Robert Schult, TeleGeography’s Director of Pricing Research, “Carriers are offering customized data services that accommodate the specific requirements of today’s demanding corporate applications. By matching configurations to performance requirements, they deliver services that are not easily replicated and help to preserve margins.” The following graph highlights the expanding product mix being made available across global providers.

Tying together TeleGeography’s research on long-haul networks and colocation facilities, MANs catalogues critical city connections worldwide and provides a market-by-market review of local networks. The enhanced directory of providers that is now searchable by company, metro region, and location (i.e. building) acts as the ideal buyer’s guid e for those needing to purchase metro services or realize market potential by offering the right products. Online access to this regularly updated database provides information to over 1500 profiles of metro area networks that cover over 180 companies.