The European market was the first to see cross-border broadband networks develop, but too many operators have joined the regional race and traffic just hasn't materialised.
Now, massive consolidation is kicking in and at least two network operators have gone to the wall. This trend is likely to accelerate in 2001 given the over-competitive market.
Ovum's analysis of Europe counts well over 20 suppliers of broadband capacity which have found that eastern Europe has not opened up as hoped, that broadband local access remains a major stumbling block and that cultural and language barriers are holding back the pan-European content distribution model.
Companies that survive the shakeout will be leaner and fitter. Expect to see around five regional operators in Europe by 2006 which will focus exclusively on the network layer. The others will move to a value-added position and buy network connectivity wholesale from these specialist providers.
Regional networks are relatively new to Asia Pacific, but the market is now poised for an expansion. Uncertainties in economic conditions, and political and cultural issues, will make it a bumpy ride for those players jostling for a position.
The Americas offer a contrasting view of market development. As demand picks up in other regions, IP-transit traffic volumes will fall rapidly in the US. The loss will be made up by expanded broadband content distribution in the domestic market, increased regional cross-border traffic and the growth of third-generation mobile services.
South and central America and the Caribbean will see a rapid installation of IP-based infrastructure to satisfy demand. There is also considerable potential for Spanish language content distribution.
Lack of regulation at regional level is a problem. Most regulation occurs at national level, causing headaches for operators trying to establish broadband connectivity across several country borders.
One of the main drivers of regional broadband traffic - content distribution - will slow down unless the national and regional regulation of digital rights management is rapidly established.