Better late than never? British Telecom (NYSE:BT, news, filings) is apparently planning to enter the content delivery business, according to a report from Dan Rayburn. But they aren't going to buy their way in like Level 3 did, nor will they resell the services of other CDNs (Reliance Globalcom, Global Crossing, DT), nor will they straddle the fence with partnerships (Tata, Verizon). Nope, BT is going to follow in the footsteps of AT&T (NYSE:T, news, filings) and build their own CDN offering from scratch.
The benefit of this approach is that BT will be able to match its own needs more exactly. What needs are those? It seems likely that what they have in mind is UK-centric system focused on their own customers. By not buying an existing CDN, the cost of which would be negligible to them, they are saying two things: 1) what is out there doesn't fit their plans, and 2) they are in no hurry. BT sees what many of us who follow internet infrastructure see, that content delivery networks will over time be absorbed by the internet as an integral part of its structure rather than an overlay or bypass. This is more about network evolution than anything else.
I don't see BT's move as an offensive maneuver but as a defensive one. They have no intention of fighting Akamai or Limelight internationally, or even in the US market. If they did, they would have bought someone because it takes years to build a CDN that can compete at that level. BT really only cares about content delivery as a means to improve its own network and to strengthen or maintain its connection to its customer base, not as a new revenue source. They have a large captive market. Once they have CDN services in place, there is nobody who can match their closeness to those customers so they will always have leverage locally.
I may be missing one or two, but I think that makes seven carriers that have entered the content delivery space in one form or another. Who is left? Hmmm, let's see. In the US there would be Sprint, Cogent, and XO - none of whom I see as likely to make a move soon. Internationally, France Telecom might, and other European incumbents certainly have the resources - Teliasonera, Tiscali, KPN, Telefonica. Even Telstra down in Australia could give it a try. But my own thought is that the most likely candidate is Japanese incumbent NTT Communications (NYSE:NTT, news, filings).
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