* A report published in September by Analysis Research (www.analysys.com) estimates that the addressable market for voice and data commodity trading could be worth more than $18 billion in 2006.
Forecast total value of addressable market for traded bandwidth, 2001-2006 chart
Source: Analysis Research (www.analysis.com)
The firm’s analysts say there will be significant rewards for the successful. “The value of a commodity-style trading environment will be felt throughout the supply chain as the market becomes more flexible and transparent and less high risk,” says Tasmin Pert, lead author of the report, which examines the views of carriers, investor and resellers on bandwidth exchange. The report also explains why this move is not just inevitable but desirable for many companies.
Band-X Ltd. (www.band-x.com) opened a Band-X Routed IP transit exchange in Frankfurt, Germany. Frankfurt is the world’s fifth-largest Internet hub city, with more than 160Gbps of Internet capacity. Band-X Routed also has a presence in Amsterdam, Hong Kong, London, New York and Paris.
Physically, Band-X Routed is a cluster of Cisco Systems Inc. (www.cisco.com) routers that connects buyers of IP capacity to backbone suppliers. Band-X monitoring equipment provides independent quality information about the IP transit on offer. Buyers can connect to the supplier of their choice based on price and quality information. Buyers also can change suppliers from month to month, to take advantage of price reductions or quality improvements. Buyers automatically pay current market prices throughout their contract.
Telecom capacity trader Tradingcom Europe (www.tradingcomeurope.com) has achieved a trading volume of 10 million switched minutes per month. The figure includes capacity sold via its electronic trading floors in London, Frankfurt and Paris.
Thirty carriers are connected to its switched minutes trading platforms, and it expects to sign up about 50 more customers by the end of this year. Its trading floors in London and Frankfurt opened this summer.
Tradingcom Europe also has attracted 230 participants to its online bandwidth-trading platform in Paris, where it provides brokerage facilities in bandwidth and IP transit.
Comparison of MetroHub with Physical Pooling Point
|Physical Pooling Point||MetroHub|
|Point of Demarcation||Specific Building||Any on-net Location|
|Time Required to Switch Circuits||Minutes||1 to 5 days|
|Number of Participants||Low||High|
|Protocol||SONET Only||Protocol Independent|
|POPs Per City||1-2||5+|
Source: Sphera Optical Networks Inc. (www.spheranetworks.com)
Trading Desk Links
Cable & Wireless plc
Con Edison Communications Inc.
Level 3 Communications
Looking Glass Networks Inc.
NEON Communications Inc.
Sphera Optical Networks Inc.
Switch & Data Facilities
Williams Communications LLC
The Yankee Group