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.