Capacity Wholesaler

from Internet Business

The Internet relies on a telecommunications infrastructure which was established to carry telephone conversations. The vast increase in capacity provided by technologies such as fibre optic cable and digital signal processing have transformed transmission between exchanges including long distance in a way which enables the carriers to bulk sell digital communication capability. The providers of Internet aggregation and 'backbone' services are just one of a number of classes of clients for such bulk capacity. In a climate of increasing deregulation of telecommunications, it is likely that carriers specialising in communications other than voice will start to own some of the physical network, extending what has already been learnt by building campus networks and microwave links.

The opportunity for low cost early entry into the dedicated Capacity Wholesaler business has passed in markets with well established Internet usage, such as Australia. However, the decentralised nature of the Internet creates scope for Access Providers and even Host Services to sell some of their services in bulk and so migrate gradually into the Capacity Wholesaler market. In contrast, $10 million is at the low end of the cost range to launch a dedicated Capacity Wholesaler business in an established market.