Bandwidth Trader Goes Live
The platform has been developed in-house by the IT team at Epsilon Telecommunications , a managed interconnect service provider and systems integrator, which unveiled its plans to put the ghost of Enron Corp. to rest in May this year. (See Bandwidth Trading Is Back! for the full background.)
Epsilon CEO Andreas Hipp had been hoping to start trading in July, but ironing out the final details took longer than expected.
"We had to capture a lot of data from our network and our customers' network inventories and then verify the data, which is the hardest part," stated Hipp, talking to Light Reading in his London offices.
The service is starting with about seven capacity suppliers offering about 50 routes, including bandwidth on all the main subsea transport links (transatlantic, transpacific). Those initial suppliers include the likes of Bharti Airtel Ltd. (Mumbai: BHARTIARTL), PCCW Ltd. (NYSE: PCW; Hong Kong: 0008) and Global Transit, while others, such as Telstra Corp. Ltd. (ASX: TLS; NZK: TLS), Sprint Corp. (NYSE: S) and Cable & Wireless Worldwide plc (London: CW) are in talks to offer their spare capacity to others.
All the operators currently hooked up to Epsilon's interconnect hubs (about 400) are eligible to trade and, for those operators that become suppliers on the eCX there is one key rule -- whatever capacity they offer, they have to have it available, notes Hipp. (Penalties are imposed for any company breaking any of the exchange's rules.)
Technical aspects aside (the platform, which aims to take the laborious manual hassle out of capacity trades, has been tested but not in live trading conditions as yet), the key to the success of the bandwidth market will be the flexibility of the suppliers, notes Hipp. Making capacity available for flexible time periods will be very important for attracting buyers, as operators often need short-term additional bandwidth on certain routes while maintenance is carried out, as backup during a specific customer project and so on.
So who might those buyers be? Well, the companies currently hooked up to Epsilon's hubs include all manner of network operators, including the Web services and business applications giants that have their own infrastructure.
And what about large multinational enterprises? "We're not going to build a sales channel to enterprises and we don't want to step on the feet of our existing [carrier] customers, but if a large enterprise came calling, would we turn them away? I'm not sure we would…"
Now Hipp and his team, which had to develop the platform's functionality (order, SLA and performance management, among other things) because "we looked at off-the-shelf systems and none of them could do what we wanted," are waiting for feedback from users about the functions that work well, those that need improving and the extra features they'd like to see.
More importantly, Hipp will be watching the platform to see if anyone's using it: If there are no trades, then that means no commission for Epsilon, which will take a variable cut of each trade (the percentage gets smaller as the trades get bigger).
— Ray Le Maistre, International Managing Editor, Light Reading