A Baker’s Dozen, 2011 Edition

It’s become an annual tradition at Renesys to provide a year-end review of how the Internet providers at the top of our Market Intelligence global AS rankings fared over the previous year. Back in 2008, we chose to look at the 13 providers that spent time in the Top Ten in our IPv4 rankings, hence the name “Baker’s Dozen“. We looked at the same group in 2009 and 2010. This year, we welcome a new member to the group, Telecom Italia Sparkle, or simply Sparkle, and say good-bye to Qwest. We report on a resurgent Cogent and a declining AT&T and Savvis. These latter carriers will probably disappear entirely from next year’s edition to be replaced with the likes of PCCW or perhaps Hurricane Electric. Finally, in this edition, we’ll take our first glimpse at global IPv6 rankings. Complete ranking information about the IPv6 Internet is now part of our Market Intelligence product offering. So let’s dive into the data and highlight some trends and changes we observed in 2011.

Drum roll, please …

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This graph shows our global scores for the Baker’s Dozen over the past year. As always, the absolute scores are not meaningful in this context, so we omit the scale. In 2006, the top five in our rankings were Sprint, Level 3, Verizon, Savvis and AT&T, in that order. At that time, Global Crossing was seventh and Qwest eighth. Today, Sprint has been passed for the third time in four years, Level 3 has acquired number-2 Global Crossing to become the undisputed number 1, and Savvis and AT&T will probably soon disappear from our top rankings altogether, as Qwest did this year. In other words, the deck has been thoroughly reshuffled in five short years. To make sense of tangled graph above, we’ll divide up the players into three tiers and zoom in on each.

The Top of the Heap

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Level 3 (AS3356) completed their acquistion of Global Crossing (AS3549) in October of 2011. We show them as separate entities here, since their networks have not yet been merged, a process that will understandably take some time. However, we did blog on what the combined company would look like in our rankings, and it is safe to say that Level 3 has the pole position locked up for the foreseeable future. As we discussed in that posting, the next five global providers would have to merge to rival the score of new mega-Level 3.

Still, Level 3 did stumble a bit in the ranking in early 2011 when they lost Singapore Telecom (AS7473) as a customer. But they then rebounded in part by picking up routes from Cable and Wireless (AS1273). Global Crossing gained increased transit from large customers throughout the year, including Vietnam Posts and Telecommunications (VNPT, AS45898), OJSC Vimpelcom (AS3216), The Communication Authority of Thailand (AS4651) and returning customer PCCW (AS3491). Such customer additions and increased transit from existing customers saw both Level 3 and Global Crossing increase their individual scores by double-digit percentages, whereas the Internet as a whole only grew by 5.1% by our metric.

So it’s safe to say the global race is now for the number-2 position. At the beginning of 2011, NTT (AS2914) passed Sprint, continuing a slow and steady climb in the rankings. Meanwhile, Sprint continues to tread water as they have been for several years. Like Verizon (AS701) and AT&T (AS7018), the Sprint sales team is clearly no longer focused on Internet transit. While transit is declining for some of the providers, this may actually indicate that they are selling services directly to enterprises, changing the distribution model.

The Battle for Middle Earth

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In our second cluster, we show Sprint again, as they are about to be passed by TeliaSonera (AS1299). TeliaSonera has shown consistent growth throughout the year, as reflected by their double-digit percentage increase in our scoring metric. Another big mover in this group has been Cogent, although their increases have been a bit more erratic. The dips you see in their score in the latter part of the year are due entirely to decreases in routes from Pacnet (AS10026), the first such drop lasting only 9 days. Pacnet became a Cogent customer in June of 2011 and may be in the process of adjusting traffic flows to a new provider.

In this group, Tinet (AS3257) and Tata (AS6453) also showed steady growth throughout the year, easily beating the global average. However, both providers tailed off a bit at the end of 2011, due to both decreased transit from existing customers and a few customer losses. Tata lost Japanese customer Technology Networks Inc. (AS9824), Norwegian provider Ventelo (AS2116), now single-homed behind Level3 Global Crossing, and Romanian provider Romtelecom (AS9050), among others. Tinet, part of Neutral Tandem, has just been rebranded as Inteliquent. During the year, Tinet losses included European provider LambaNet (AS13237), global provider KPN (AS286) and Philippine provider Bayan Telecommunications (AS6648). Time will tell if the losses for Tata and Tinet at the end of 2011 represent the start of a trend or simply a normal ebb and flow of customers reaching the end of their annual contracts.

The Best of the Rest

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In this group, we see Verizon (AS701) treading water at number 9, while Savvis (AS3561) and AT&T fall off a cliff. As one example of their decline, Savvis lost a considerable number of routes from Pacnet, as Pacnet juggled providers throughout the year. Savvis is now owned by CenturyLink, who acquired Qwest in 2010 and is rebranding it. When we
blogged on this merger, Savvis was #9 and Qwest was #14. At that time, the merged entity would have been #3, just trailing NTT. Since then, both organizations have lost considerable ground and together they would barely make it into the top 10. Surprisingly, China Telecom (AS4134) also fell during the year, as China Unicom, which also owns China Netcom or CNC Group, diversified their international transit away from the Chinese incumbent.

The one bright spot in this group is Telecom Italia Sparkle (AS6762), which grew by an outstanding 65% relative to our metric to capture the number-10 position. One big win for them last year was Rostelcom (AS12389), along with increasing routes from Pacnet. It will be interesting to see if Sparkle can continue the winning streaking into 2012 and whether or not Pacnet will continue to influence the global rankings to such a degree with their buying patterns.

The Other Internet

So far, we have only been discussing the IPv4 Internet, the one with all the content and all the users. To address the impending exhaustion of IPv4 addresses, there is an alternative, although incompatible, IPv6 Internet. To date, the IPv6 Internet has not gained much traction. According to Google, less than 1% of users even have access to it. This chicken-or-egg problem with IPv6 has been reviewed in our World IPv6 Day blog last year and issues highlighted there still remain. But we do collect and analyze data on this alternative Internet and two of our many IPv6 rankings from Market Intelligence are shown below.

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Here we see many of the familiar global IPv4 providers, although in a different order, and a few new names. In particular, Hurricane Electric (AS6939) maintains a commanding lead over its nearest competitors in the IPv6 world. Without much in the way of users, content or traffic to speak of, such rankings are currently of little consequence, but that may change soon. The growth of the Internet shows no signs of slowing down, especially in the emerging world, and the problem of IPv4 address exhaustion is a very real one.

Conclusions

As we noted last year, the US old guard of AT&T, Sprint, Verizon and Qwest are stagnant or declining. Qwest left our top rankings this year and we expect AT&ampT to follow them next year. With respect to the Internet, the developed markets are not growing, but the emerging markets of Africa, Asia and the Middle East with their relatively low Internet penetration and higher margins continue to remain a bright spot. But in all markets, the enterprise space remains vibrant as more and more businesses move their mission-critical services to the Internet. Any provider who can serve an increasingly interconnected world, and do so
reliably with low latencies, stand to grow in our rankings. Those who don’t will be left behind. An emerging wild card is how IPv4 address exhaustion is handled and if IPv6 takes off as a result. When it comes to the Internet, the only constant is change and we can expect an eventful 2012. Stay tuned.

3 comments
Chris
Chris

The reason that Init7 is currently in the top 10 is that they have been advocating IPv6 for years and are (or were, I'm not sure) giving away a free full table just like HE does. Plus, Fredy is a nice bloke, so their high rank in the IPv6 tier world is well-earned.

Jerome_T
Jerome_T

As usual, this review is very good and very very useful for mid-size and small ISP to update and verify its IP transit policy. Thank you guys!

Chris
Chris

Emil, you say: "Like Verizon (AS1239) and AT&T (AS7018), the Sprint sales team is clearly no longer focused on Internet transit." I think you mistook either Sprint (as1239) or Verizon (as701/2/3/11486/19262). Also, not many of the traditional telecom carriers have sales teams focused on 'ip transit'... which is sad in a way. Editor's Note: Fixed the typo. Thanks.