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NTT America Predicts Increased Broadband Consolidation Among Trends For 2012

Stocks in this article: NTT

NTT America, a wholly owned U.S. subsidiary of NTT Communications Corporation (NTT Com) and a Tier-1 global IP network services provider, today reflected on key trends in the broadband and IP transit industry in 2011, as well as predicted major themes for 2012.

Michael Wheeler, vice president, NTT Communications Global IP Network, NTT America, outlined the following developments that shaped the industry landscape in 2011 and will continue to affect the industry throughout the coming year:

Increased Industry Consolidation

2011 brought a flurry of mergers and acquisitions (M&A) in the market, with Verizon’s acquisition of Terremark, CenturyLink’s acquisition of Qwest and Savvis, Level 3’s acquisition of Global Crossing and, most recently, Windstream’s acquisition of PAETEC. Wheeler predicts that 2012 will bring increased consolidation in the industry, particularly as service providers look to grow their businesses into the cloud. He cited Verizon’s acquisition of Terremark as an example of this trend that has already materialized.

“The motivators for the majority of the M&A activity in 2011 can be traced back to two driving factors: scale and scope. The acquisitions by Qwest, Level 3 and Windstream were largely driven by scale – expanding their services into new markets they didn’t previously have a presence in or access to,” Wheeler said. “Verizon, on the other hand, is an example of a scope play. Terremark added services to the Verizon portfolio that it didn’t have before, specifically in the cloud services space.”

Wheeler notes that NTT America has continued to make investments in its NTT Communications Global IP Network, adding new markets such as Latin America in 2011 and preparing to add new technologies such as 100 Gigabit Ethernet (100GigE) in 2012.

Internet Growth Driving Need for New Technologies

The Internet continues to grow at an exponential rate, with video content being the largest contributor. As a result, new technologies are emerging to alleviate the pressure that this growth places on networks.

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