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Bandwidth Mergers: Road To Nowhere?

from the lots-of-positioning-going-on dept

With most of the attention today being focused on the approval of the big two mergers, there isn't nearly as much talk about Level 3's move to buy Wiltel. Fresh off their dispute with Cogent, Level 3 looks to be buying up as much bandwidth as it can find -- and it may not be done yet. Om Malik reports that the company is likely to announce a similar (if slightly smaller) deal before Thanksgiving as well. However, Om also takes a a look at the overall market and notes that it's consolidating rapidly, as the largest customers in the space are buying/building their own infrastructure and networks, which could leave Level 3 out in the cold. With that in mind, the peering argument with Cogent may look even worse, because it could scare off some potential customers or partners -- but SBC's own statements should be equally as chilling. So, the trick is for Level 3 to look to add some additional value above and beyond the pipes -- but that's a game that no one's really figured out just yet, and it's not clear if Level 3 will be the first to succeed.

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