Analyst firm marks first MSO showing in top tier of U.S. business Ethernet providers

AUGUST 21, 2007 -- In its latest market analysis, Massachusetts-based industry research firm Vertical Systems Group (search for Vertical Systems Group) reports that two of the top three providers of retail business Ethernet services in the U.S. gained port share for mid-year 2007 as compared to year-end 2006 results. The report further reveals that multiple-systems operator Cox Business (search for Cox Business) entered into the top tier for the first time, while several other major providers showed declines in port share.

Rick Malone, principal at Vertical Systems Group, says that the expectation that competition in this market would heat up in the first half of this year was fulfilled, which resulted in "considerable port share fluctuation." He says, "The dense availability of low-cost metro services boosted share for many regional U.S. Ethernet providers, including MSOs. Additionally, the aggressive deployment of new fiber infrastructure for residential applications enabled broader accessibility of native Ethernet services for adjacent business sites."

AT&T, Verizon Business, and Time Warner Telecom are the top three U.S. retail business Ethernet services providers. AT&T, including BellSouth (acquired in December 2006) holds the lead with a 19.5% share of mid-2007 ports. AT&T's share declined as compared to the combined year-end 2006 shares for AT&T (13.6% port share) plus BellSouth (8.5%). Verizon Business shows an increase from 12.2% to 15.8% port share, in the No. 2 slot. In third position is Time Warner Telecom, which rose to 13.7% of ports from 10.7% in 2006.

Cox Business, holding a port share of 8.9%, makes a debut in fourth position as the first MSO in the top tier of U.S. business Ethernet providers. Cogent is fifth with an 8.6% share of the market, an increase from 8.2% at year-end 2006. Qwest (including OnFiber, an acquisition which was completed last September) is sixth at 8.4%, down from a 9.9% port share. Yipes, which recently announced its acquisition by Reliance Communications and will operate as a business unti within the company's FLAG Telecom operations, is seventh with a share of 4.6%, a decline from 5.4% at year-end.

Other Business Ethernet Services providers comprise an aggregate 20.5% of the market, including AboveNet, American Fiber Systems, Alpheus Communications, American Telesis, Arialink, Balticore, Bright House Networks, Charter Business, CIFNet, Cincinnati Bell, Comcast Business, CT Communications, Electric Lightwave, Embarq, Expedient, Exponential-e, FiberTower, Global Crossing (including Fibernet), Globix, IP Networks, Level3 (including Broadwing), LS Networks, Masergy, Met-Net, Neopolitan Networks, NTELOS, NTT/Verio, Optimum Lightpath, Orange Business, RCN, Savvis, Spirit Telecom, Sprint, SuddenLink, Surewest, Time Warner Cable, US LEC, US Signal, Veroxity, Virtela, Windstream, XO, and others.

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