The VoIP Wholesalers


Denver Post has this article which contends that wholesale strategies adopted by Qwest Communications and Level 3, primarily because they own thousands of miles of fiber could become a way out for for these beleaguered companies. Given that Level 3 lost money in 25 of its 26 quarters, this cannot be all that bad. “The strategy is relatively low- risk and potentially high-yield,” said Janco Partners analyst Donna Jaegers. “You could compare them to an arms merchant.” Not so fast: it is quite possible any of the desperate bandwidth providers – and there are many like MCI – to do precisely the same. I am sure AT&T which has built a nice IP infrastructure could do exactly the same. And all the VoIP traffic is not enough to fill the pipes. I have often said that VoIP is a deflationary force, and is going to slowly compress the revenues of all concerned – from bells to long distance carriers to wholesale bandwidth providers. Not unlike Linux or other open source software.

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