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Bankrupt Carriers Avoiding Price WarsApril 9, 2003 After three years of uninterrupted bad news, there are finally signs that the battered long-haul bandwidth industry is reaching bottom. New network construction is at a standstill, much needed consolidation is beginning to reduce the number of competitors, and long-haul bandwidth prices in the U.S. and Europe are finally stabilizing, after falling by as much as 70 percent in previous years. These findings are presented in International Bandwidth 2003, a new report by research firm TeleGeography. The report also lays to rest a persistent fear that has plagued the industry. "There’s no evidence to support the rumor that bankrupt telecom companies are waging a price war," stated TeleGeography Research Director Stephan Beckert. "Based on the thousands of data points we've collected for our Bandwidth Pricing Database Service, we've found that the most aggressive pricing on competitive routes comes from established carriers, or those in financial difficulty but not bankrupt." The telecom sector still has a long way to go before it returns to health, however. Only five percent of potential inter-city bandwidth is active in North America, and only a fraction of this bandwidth is actually being used. And while the sector has shifted from expansion to consolidation, many inter-city routes in Europe and the U.S. are still served by more than 20 bandwidth providers. International Bandwidth 2003 is the 4th annual survey of long-haul terrestrial and submarine network operators from TeleGeography, Inc., the Washington, D.C.-based research group. In addition to system-by-system descriptions and maps, each volume contains an exhaustive analysis of long-haul network competition, pricing, technology, and finance—as well as statistics on supply and demand by region, route, and city.
Stephan Beckert, |
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