Metro wholesale spending trends

15 December 2010 | Judy Reed Smith


A glimpse into the future suggests the next major trends for metro wholesale carriers.

Robert J. Sawyer, author of Flashforward, is sometimes considered Canada’s answer to Michael Crichton. In Sawyer’s fiction, people the world over blacked out for 137 seconds, during which they glimpsed 137 seconds of the future. Think what you could do with that power.

Stateside, metro wholesalers now have their own glimpse into the future available, courtesy of our latest customer feedback, the Metro Wholesale Carrier Report Card. This may not deliver foreshadowing on steroids as a plot device, but it can tell us which products metro customers will choose in the coming months; and this information comes straight from buyers. It might not be as exciting as a good book, but it could be more relevant to your bottom line.

Ethernet transport tops this list, with 81% of metro wholesale purchasers planning to increase their Ethernet spends over the next year. Another 13% of purchasers project that spending on this product set will remain flat, while only 6% plan reductions. This growth comes from what is still a small base of Ethernet spending, with those who have tried it liking it and wanting more. Carriers take note: they tell us they don’t want to wait for bids and may shop for carriers with solid delivery dates.

VoIP remains at the top of the wholesale technology migration list as well, with 76% of respondents projecting spending increases. Interestingly, only 1% of metro wholesalers plan to reduce their VoIP spends. This low-cost product replaces higher-margin switched voice, so that the increased VoIP spending will further diminish shrinking traditional voice revenues.

When looking at dedicated internet access, 59% of wholesale metro purchasers anticipate increased spending while 28% anticipate flat spending and 12% plan spending reductions. Although customers will be expanding usage, pricing pressure will allow more for less. High-speed private line products are earmarked for spending increases by 51% of respondents, with 37% anticipating flat spending over the next year. Reduced spending was planned by 11% of respondents. This supports the trending from low-speed to high-speed over the past years, with high-speed revenue moving from 27% of transport spending in 2008 to 44% in 2009 and to 55% for 2010.

The sci-fi Flashforward would be a great asset. However, we hope customers’ predictions of product spending will add some important data for your 2011 planning.


Judy Reed Smith is CEO of Atlantic-ACM. She can be contacted at: judyrsmith@atlantic-acm.com