Connecting U.S. ISPs - The State of the Backbone Market

The Internet backbone market is the link that binds the Internet together. The Internet is nothing more than interconnections of different IP networks. Neither ISPs nor the Internet would function as it does today without these connections. Without backbone connections the different networks that make up the Internet would be unable to communicate with each other.

Cahners In-Stat Group forecasts that revenues for the overall backbone connection market will have a compound annual growth rate (CAGR) between 1999 and 2004 of 16.82 percent while the number of backbone connections will have a CAGR close to 23 percent during the same period. The difference between the growth rates in revenue and connections can be attributed to the continued declined in the cost of bandwidth.

T-1 and T-3 connections will continue to play an important role in the backbone connection market. Cahners In-Stat Group forecasts that the number of both connections will have a CAGR near 21 percent between 1999 and 2004. Higher speed connections will see stronger growth rates as a result of the increasing bandwidth needs of ISPs.

Currently the market for backbone connections remains fragmented. UUNET and Sprint supply connections to close to 50 percent of ISPs. No other carrier even has connections to 10 percent of U.S.-based ISPs.

Table of Contents

Executive Summary

Methodology

Introduction

Size of the U.S. Backbone Market

Revenues

Backbone Connections

Market Share

Carrier Profiles

Strategies for Selecting a Backbone Provider

List of Tables

Table 1. Total Revenues for U.S. Backbone Connections 1999-2004

Table 2. Year 2000 Market Share for U.S. ISP Backbone Connections

Table 3. Network Description of Top Backbone Providers

Table 4. Service Level Agreements and Connection Offerings of Top Backbone Providers

List of Figures

Figure 1. Total U.S. Backbone Connections 1999-2004

Figure 2. Total U.S. T-1 Backbone Connections 1999-2004

Figure 3. Total U.S. T-3 Backbone Connections 1999-2004

Figure 4. Total U.S. OC-3 Backbone Connections 1999-2004

Figure 5. Total U.S. OC-12 Backbone Connections 1999-2004

Figure 6. Total U.S. Backbone OC-48 Connections 1999-2004

Figure 7. Total U.S. OC-192 Connections 1999-2004