WorldCom Controls the Most Internet Bandwidth, Connections, and Revenue

July 10, 2002

The WorldCom accounting scandal has tarnished the company's reputation and could possibly lead it into bankruptcy. Unlike many recent telecom headline-makers, however, WorldCom operates an established voice and data network with significant market share and revenue. Specifically, WorldCom's UUNet business unit generated $4.7 billion in Internet revenues from access and hosting in 2001, three times more than its closest competitor.

Although WorldCom offers a huge range of Internet services, its backbone access operation occupies a particularly strong position in the market. "WorldCom is the largest Internet backbone on many levels including its expansive, international network, large customer and revenue base, and rich interconnection relationships," said Alan Mauldin, Research Analyst at TeleGeography. As a result, WorldCom is able to charge a premium for connectivity to its network—an enviable position for any Internet services company, particularly when its rivals are engaged in a price war. Although WorldCom CEO John Sidgmore has denied plans to sell off UUNet, the decision to do so may ultimately belong to the company's creditors.

Valuing UUNet and understanding its role in national infrastructure will not be simple, however. Ferocious competition, rapid network deployment, and turbulent market conditions have made the U.S. backbone a complex snarl of overlapping networks. TeleGeography's latest research on U.S. backbone deployments untangles the mess and provides the most comprehensive view available of how WorldCom stacks up against the competition. Published this month, U.S. Internet Geography 2003 presents an exclusive picture of WorldCom's role:

  • WorldCom operates 30 percent of the bandwidth on the 20 largest U.S. Internet backbone routes—more than the next four providers combined.
  • WorldCom connects over 3,400 networks throughout the world—Sprint and AT&T each connect less than half as many.
  • In 2001, WorldCom accounted for at least 30 percent of the wholesale U.S. backbone access market—three times more than its largest rival.

In addition to providing valuable competitive analysis on an individual network basis, U.S. Internet Geography 2003 includes a unique data set on how much bandwidth connects each of the country's major metropolitan areas as well as information on how this matches up with actual demand.

Share of Capacity by Provider on the 20 Largest U.S. Internet Routes, 2002
WorldCom 29%
Qwest 8%
Cogent 7%
Level 3 7%
Genuity 6%
Sprint 6%
France Telecom 5%
XO 5%
AT&T 4%
Cable & Wireless 4%
Note: Data as of mid-2002
Source: TeleGeography, Inc.

For more information, please contact:

Alan Mauldin
Research Analyst
Tel: +1 202 741 0048

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