As is our annual tradition, this blog provides a year-end review of how the Internet providers at the top of our IP Transit Intelligence global rankings (formerly, Renesys’ Market Intelligence) fared over the previous year. The structure and performance of the Internet remains a huge blind spot for most enterprises, even those critically dependent on it for business operations. Whether it’s the next 3 billion people coming online, poor performance due to suboptimal routing, or security breaches of a trust-based Internet infrastructure, Dyn provides critical insight into the structure and performance of the Internet, both real-time and historical, via its Internet Intelligence products. More importantly, our services help our customers make the changes necessary to optimize Internet availability, reliability, and reach. This blog reviews a single very small slice of our data related to the sizes of the top global players as it pertains to the markets and customers they serve.
Back in 2008, we chose to look at the 13 providers that spent at least some time in the Top Ten that year, hence the name “Baker’s Dozen“. We repeated that exercise in 2009, 2010, 2011, 2012 and 2013. During this time, we’ve watched some traditional US carriers exit the top spots as global demographics caught up with what has historically been a US-centric Internet. The past year has seen Telia Sonera, number #2, pull away from NTT and, for the first time, we welcome Cogent and Tata into our top band of global providers.
We don’t know how many people on the Internet speak IPv6 and not IPv4 (“single-stacked” IPv6), but it’s vanishingly small, and no significant Internet content is made available over IPv6 alone. IPv4, therefore, is spoken by essentially all of the Internet, and for purposes of market analysis, that’s what we focus on here. While we continue to measure the IPv6 “alternate Internet” in our IP Transit Intelligence product offering, this now two-decade-old protocol continues to struggle for universal adoption, as we first noted back in 2006. And as we observed in 2011 (and it is still true today), the IPv6 “Internet” is not even fully connected. With fewer than 20% of the Autonomous Systems (ASes) seen on the IPv4 Internet originating any IPv6 address space, it makes little sense to rank the global providers of this partitioned and lightly used alternative protocol. (For actual traffic volume measurements, consider statistics from AMS-IX, where IPv6 traffic averages around 1% of that of IPv4.)
Without further ado, then, let’s highlight a few of the trends and changes we observed in 2014 relative to the top global Internet providers.
And the Winners are …
The above graph shows our global scores for the Baker’s Dozen over the past year. As always, the absolute scores (computed from the quantity of transited IP space) are not meaningful in this context, so we omit the scale. While we see more or less steady growth and minor jockeying for position throughout 2014, our final annual rankings are anything but predictable, as significant customer wins (think China Telecom) can have a big impact even on the largest of providers.
There were a number of surprises in 2014. Level 3 maintained its dominant and growing position in the market (years after the acquisition of Global Crossing), as customers did not flee in an attempt to increase diversity. After a year-long battle in 2013 for the #2 spot, Telia Sonera emerged as the clear winner over NTT, as the latter’s growth stalled. Cogent gained the #4 spot on the last day of the year over GTT (#5), and Tata entered our top tier for the first time, closing the year as #6.
Sprint continued its nearly decade-old downward spiral, dropping another spot in the rankings to #8, while Hurricane Electric’s growth stalled. When Hurricane Electric entered our Baker’s Dozen for the first time in 2013, it was on a tear and closed out the year within easy striking distance of XO. However, both providers made little headway in 2014 and ended the year in the same relative positions.
To make more sense of the tangled graphic above and this year’s changes, we’ll divide up the players into three tiers and zoom in on each in turn.
The Leader Board
Level 3 (AS3356) completed their acquisition of Global Crossing (AS3549) back in October of 2011. Over three years later, we continue to show them as separate entities, since their networks have not yet been fully merged. However, the integration process picked up considerable steam in 2013, continuing into 2014. While we once ranked Global Crossing as #2 in the world at a significant fraction of Level 3’s size, it is currently only around 25% of Level 3’s score and would be ranked #12 if it were still an independent entity. We expect Global Crossing’s AS to disappear entirely from next year’s Baker’s Dozen, as Level 3 completes the integration of its massive acquisition. As this occurs, Level 3’s ASN will continue to gain in score, such as in mid-October of 2014 when it picked up increased transit from PCCW and the large markets it serves, such as China, Indonesia and Vietnam. This one change gave Level 3 an almost 10% boost by our metric.
While Level 3 probably has the #1 spot locked up for some time, the biggest news of 2014 was the ascent of Telia Sonera (AS1299) and its now undisputed claim to the #2 spot over NTT (AS2914). These fierce competitors battled it out in 2013, trading positions several times, only to see NTT secure the #2 ranking by the thinnest of margins in the closing hours of 2013. Then in 2014, Telia Sonera put significant distance between its nearest competitor with transit wins from Reliance Globalcom Ltd. (AS15412), Korea Telecom (AS4766), and Liberty Global Operations B.V. (AS6830), to name just a few of its bigger customers. These gains came during a year that saw NTT grow by less than 2% by our metric, while Telia Sonera narrowed its distance to Level 3, rising to over 80% of this top-ranked provider’s score.
For the first time, we welcome Tata (AS6453) to our top cluster, after they made steady gains in 2014. In particular, Tata picked up considerable new transit from Brazilian powerhouse Embratel (AS4230). This and other wins throughout the world brought Tata’s rank all the way to #4 at the end of October and into November, only to see them fall to #6 by year end. However, they are close enough now to GTT (#5) and Cogent (#4) as to make the differences in rank largely meaningless. After a relatively flat year for GTT, Cogent passed GTT on the very last day of 2014. Like Tata, Cogent won big in Brazil with increased transit from Oi (AS7738, formerly Telemar), in addition to other significant wins throughout South America, Africa and Australia. The year ended with Tata, GTT and Cogent all within a few percentage points of one another, so 2015 should see a very competitive battle for the #4 slot in our global rankings.
Our middle tier consists of Verizon (AS701), Sprint (AS1239) and Telecom Italia Sparkle (AS6762), in decreasing order. While Verizon and Telecom Italia ended the year roughly where they started, Sprint continued its long decline with a decrease in score of nearly 20%. The big change for Sprint during the year was that we reclassified China Telecom (AS4134) as a peer and not a customer. While China Telecom may indeed be paying Sprint for peering, routing now suggests that it is no longer using Sprint as a transit provider. As such, Sprint lost credit for China Telecom as a customer, a big blow to its overall score. Sprint, which was at #1 in 2006, fell from #7 to #8 in 2014. Old timers will recall that Sprint connected China to the Internet in 1994 with a 64K circuit.
Although partially offset by some losses elsewhere, Telecom Italia also saw gains in the increasingly competitive Brazilian market, picking up increased transit from Tim Celular (AS26615), a subsidiary of Telecom Italia Mobile, Algar Telecom (AS16735) and Oi (formerly, Telemar). Verizon bounced around a bit during the year, but ended up within 0.5% of where they started for essentially no gain.
The Best of the Rest
Our third grouping consists of China Telecom (AS4134), PCCW (AS3491), XO (AS2828) and Hurricane Electric (AS6939), from largest to smallest. These rankings are essentially unchanged from last year, although China Telecom and PCCW, who are often quite close in score, traded places at the end of 2014 by a narrow margin.
China Telecom’s erratic rankings are due to sometimes odd incestuous routing it maintains with local competitors, such as China Unicom (AS4837) and Guangdong Mobile (AS9808), which can sometimes appear as transit and sometimes as peering. And then there is China Telecom’s prolonged and periodic leaking of Vimpelcom (AS3216) routes, which has the net effect of temporarily classifying China Telecom as a provider to its Vimpelcom peer. While providing (presumably) free transit to your peers is not the best business decision, it can boost your Dyn ranking as our algorithms will automatically give you credit for new “customers” if they remain in place long enough. As these errors were corrected, China Telecom’s score subsided to reflect a decline in erroneous transit, only to increase again with the next prolonged mistake.
PCCW’s gains were largely offset by losses and they ended the year at roughly the same score they had the beginning. XO (#12) and Hurricane Electric (#13) both made minor gains throughout the year to maintain their position in the rankings, rounding out our Baker’s Dozen, as they did in 2013. XO gained transit from Brazil’s Embratel earlier in the year, only to have that gain more than erased by losing Cox Communications (AS22773) as a customer. Hurricane Electric lost transit for months in a troubled Ukraine from Top Net (AS21011), but picked some up from Russia’s Rostelecom (AS12389), as one example of offsetting changes during the year.
As we’ve noted before, Westerners view the Internet as a commodity and ubiquitous access is taken for granted. Unsurprisingly, carriers win in this environment with either market dominance or cutthroat pricing. Organic growth now only comes from underserved markets, and today we see the battle for global Internet dominance playing out in Asia, South America and now Africa. The next 3 billion people coming online will drive the Internet’s future growth.
While providers like to advertise their annual Dyn ranking, these metrics are of little value if your ISP delivers poor performance to your target market. Tools like Dyn’s IP Transit Intelligence show you who the players are in any given market, while Dyn’s Internet Intelligence keeps an eye on their performance and the security of your own Internet assets. Because at the end of the day, reaching your customers effectively on the Internet is all about performance. Stay tuned for an interesting 2015!