A backbone connection is not only essential to the performance of an ISP, but the overall performance of the Internet. The backbone market is at the heart of the Internet, allowing the networks that make up the Internet to exchange traffic. This market is one of the oldest markets in the Internet industry and its growth rate reflects its maturity.

by ISP-Planet Staff [January 11, 2001]

According to Cahners In-Stat Group, revenues for backbone connections produce a compound annual growth rate (CAGR) of 16.8 percent between 1999 and 2004. During the same time frame, the number of backbone connections will achieve a compound growth rate near 23 percent.

Why the difference? In-Stat Analyst Daryl Schoolar says the difference between the growth rates in revenue and connections can be attributed to a continued decline in the cost of bandwidth.

"T-1 and T-3 connections will continue to play an important role in the backbone connection market", Schoolar said. "Both connection speeds will have a CAGR of around 21 percent between 1999 and 2004. OC-3 and higher speed connections will have even greater growth rates, but will only account for 18 percent of all backbone connections by 2004."

In addition to diminished bandwidth pricing, In-Stat reports that currently ISPs are using more than one carrier to connect to the Internet and that UUNET and Sprint still have the largest share of the backbone connection market.

The report, Connecting U.S. ISPs ­ The State of the Backbone Market provides forecasts for backbone connections and revenues, carrier market share, carrier profiles, and strategies for selecting a carrier.

— End