• United States

AT&T leads IP VPN service market, but doesn’t dominate

Mar 12, 20032 mins
Internet Service ProvidersNetworking

* IDC's IP VPN Carrier Market Share and Competitive Analysis report

Not a single carrier is overwhelmingly leading the IP VPN carrier market, according to recent figures released by IDC.

IDC last week released its IP VPN Carrier Market Shares and Competitive Analysis report, which looks at revenue stemming from IP VPN services for 2002. Despite businesses spending more on IP VPN services with each passing year, there is not one carrier that is dominating the market.

AT&T enjoyed the most revenue last year with $173.2 million, but in terms of market share, not one carrier has even a quarter of the market. IDC points out that AT&T’s revenue figure does not include sales from the carrier’s IP enabled Frame Relay service, but only its IP VPN offerings.

Despite bankruptcy and scandal, WorldCom is the second largest IP VPN service provider with $150.3 million in revenue. And Savvis Communications has surprised some as the third largest IP VPN service provider by revenue raking in $133.5 million last year.

Sprint’s IP VPN offerings brought in $109.4 million for the year putting it in fourth place. And Genuity was still holding its own last year with IP VPN service revenue totaling $102.2 million despite its bankruptcy and subsequent acquisition by Level 3.

The next five service providers are Qwest with $62.5 million 2002 revenue, Equant ($42.6 million), XO Communications ($22 million), Infonet ($15.2 million) and SBC ($11.2 million).

Oddly enough, these top 10 providers don’t even make up 50% of the overall IP VPN market. IDC points out that the “other” category is chock-full of regional and local ISPs offering IP VPN services as well as all private label and wholesale offerings. In other words if Acme ISP resells Sprint’s IP VPN services, that revenue is included in the “other” category, which makes up 63.5% of the total IP VPN services market.