Trading Desk: Attention Turns to Asia-Pacific Trading

Posted: 11/2000

Attention Turns to Asia-Pacific Trading
By Khali Henderson

International capacity trading has centered primarily in America and the
United Kingdom with online exchanges setting up shop, logically, where a
majority of international traffic converges: in London, Los Angeles and New
York. With those PoPs up and running, exchanges are beginning to turn their
attention to the emerging but potentially lucrative international wholesale
market in Asia. A Yankee Group (
study says the region’s capacity could reach terabit level by 2002.

In mid-September, The Global TeleExchange Inc. (
opened its Singapore office, which will anchor its operations in Southeast Asia
and connect to the exchange’s hubs in Europe (London) and North America
(Washington, D.C.).

"The Global TeleExchange is making a significant infrastructure,
operations and marketing investment in Asia," said Joe Ratnam, regional
director of sales for The GTX in a press statement. "We offer Asian
carriers an efficient method of conducting business with the thousands of new
carriers in the West."

The GTX will be promoting membership in its Virtual Real-Time Exchange (VRTX)
to carriers in China, Hong Kong and Malaysia. VRTX is a fully automated,
Internet-based trading floor and delivery mechanism for telecommunications
minutes, bandwidth data and content.

In late summer, RateXchange Corp. (
completed its first trans-Pacificbetween Hong Kong and Los Angelesbandwidth
trade using its new open electronic trading system. Called RateXmatch, the new
system supports various trading agreements and delivery options.

These recent moves by The GTX and RateXchange challenge the Asia Capacity
Exchange Ltd. (ACE,,
which has been operating in the region alone for the past two years.

"In a relatively young marketplace like ours, competition is a very
healthy sign," says ACE chairman and co-founder Paula Brillson. "We
are in a growth market, and competition in these conditions tends to increase
the rate of growth rather than eating into the revenues of the competing
parties. We have been anticipating greater competition in the trans-Pacific and
Asian arena. We are continually developing the products and services we offer in
order to ensure that we maintain a competitive advantage."

By virtue of its considerable head start, ACE is in good position to defend
its reign as the pre-eminent exchange in the region. Like its competitors, it
has begun to expand out of region with a trading desk in the United States and a
reciprocal marketing alliance with the London Satellite Exchange (

In addition, in late September it launched the first trans-Pacific
Bandwidth-on-Demand (BoD) service over its Hong Kong-Los Angeles route.

The new BoD service allows carriers, ISPs and corporations to purchase
dedicated or IP bandwidth on an as-needed basis or to sell their excess
bandwidth through ACE’s online proprietary software trading engine, the ACE
Virtual Trading Floor.

"The Hong Kong-Los Angeles route was the logical choice for our pilot
BoD product launch," says Brillson. "We have been actively trading
this route over the past year for international voice traffic, using Hong Kong
as a hub for the rest of Asia for U.S.-and Hong Kong-originated traffic."

ACE operates Telehubs in Hong Kong and Los Angeles to which it has added
broadband access equipment from Lucent Technologies Inc. (
to support its BoD services. ACE plans to deploy additional Telehub operations
in key cities in Asia, Europe and North America within the coming months.

Lucent’s solution will allow ACE to route and bill its customers’ BoD
transactions providing a total bandwidth solution to its clients.

Bandwidth can be purchased on a fixed rate basis for a fixed term or on a
time-of-day usage basis.

ACE also provides 24/7 monitoring and technical support, as well as
collocation of equipment. It also manages billing and settlement functions
through a propriety OSS that customers can access directly.

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