Profile: NTT America – Part 1

May 19th, 2009 by · Leave a Comment

NTT America, a subsidiary of Japanese telecommunications giant NTT Communications (NYSE:NTT, news, filings), operates what has to be the quietest Tier-1 internet backbone in the US.  NTT leases wavelengths and such as the foundation for its IP/MPLS network, and sells capacity and services at layer 2 and 3.  Their story has never really gotten as much press, perhaps partly because they don't own fiber itself.  They are always out there pushing bits, but without the public drama of a Cogent, Level 3, or Sprint and without the raw size of an AT&T or Verizon - on this side of the Pacific anyway.  That's part of it too of course, being the smaller arm of a foreign giant can tend to leave you in the shadows and when one thinks of NTT one thinks of fiber in the Japanese market and the mobile arm NTT Docomo first.  But nevertheless they push a whole lot of bits, ranking in the top five or 6 internationally consistently throughout 2008 according to Renesys.   That can only go up given traffic trends in Asia, since NTT specializes in traffic to and from that region.

ntt america networkNTT America serves both North and South America, and the axis of Asia-North America-South America has become a major focus for them right now.  That makes their network quite distinctive from most other large backbones, whose largest intercontinental interests are nearly always transatlantic.  Because of their strength on these routes, NTT America is somewhat insulated from the IP transit pricing wars.  Pricing always trends downward of course and IP transit remains a very tough business no matter how you slice it, but these days traffic on less travelled routes is growing faster than anywhere else and that helps to compensate.

No IP network stands alone these days, and NTT America has two other lines of business that leverage it.  First, there is their Arcstar brand, which serves multinational corporations with VPNs and other managed data solutions.  This division competes with the likes of BT Global Services, AT&T, and Global Crossing, but with a strong tilt toward companies with needs in Asia and South America rather than Europe.  Second is their enterprise hosting division, which is built upon the company's datacenters in all the usual locations like Ashburn, New York, and San Jose and various international hubs.  This division manages the storage and distribution of data for large clients.  So altogether you have the IP/MPLS network, the datacenters they hook up to, and managed services to multinationals and data intensive companies.  No fiber in the US, whether metro or longhaul, but hey somebody has to lease that capacity from those that do have it and NTT America knows what to do with that capacity.  I have always confused the enterprise hosting division and Verio, but these days Verio's hosting business is run independently from the rest of NTT America and isn't really in the network business anymore itself since selling its access business to Cogent a few years ago.

I've speculated about NTT entering the CDN business in the past, but it turns out that NTT has been in the CDN business for a while already and it's not via a resale agreement or partnership.  They built their own, but they just don't make as much noise about it - yet anyway.  For more on that and other comments, in part 2 of this article we hear from Chris Davis, Director of Marketing at NTT America.

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Categories: Industry Spotlight · Internet Backbones

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